Implementation of the new EU regulatory framework


Commission initiation of infringement proceeding’s pre-court phase against France, followed by the transposition in French law of the telecommunications package

As France did not meet the transposition deadline 25 July 2003, the Commission has commenced the pre-court phase of infringement proceedings against France and sent a formal notification reminding France to meet its European obligations.

Subsequently, France implemented the Commission’s six directives by three laws: the law n° 2003-1365 on the public service obligation and France Telecom, the law n°2004-575, 21 June 2004, on the trust in the e-economy and the law n°2004-569, 9 July 2004, on electronic communications and audiovisual services.

All the applications decrees have not been published yet.

The current progress of the market analysis reveals the priority justified by local constraints

The ARCEP initially focused on markets 16, 11 and 13 (see table below), which are markets that could and should be regulated imminently. With regard to Market 16, the ARCEP’s initial analysis has been justified by local constraints, due to the gap between the availability and the rate level of the electronic communications in the Metropole and in the overseas departments, and also the specificity of the overseas departments, and also the specificity of the overseas departments due to their insularity and distance.

Panorama of the progress on the markets analysis (290705)

Markets for which a specific decision has been taken by the ARCEP[1]


Market 16

Voice call termination on individual mobile networks.

High-speed network – wholesale market

Market 11

Wholesale unbundled access (including shared access) to metallic loops and sub-loops for the purpose of providing broadband and voice services.

Market 12

Wholesale broadband access (bitstream : option 3 + option 1 regional).

(Market 19)

Broadband access offers delivered at the national level (option 5 national).

Markets for which the decision projects have been notified by the ARCEP to the Commission and therefore in the expectation of a decision of the ARCEP

Fixed telephony

Market 1

Access to the public telephone network at a fixed location for residential customers.

Market 2

Access to the public telephone network at a fixed location for non-residential customers.

Market 3

Publicly available local and/or national telephone services provided at a fixed location for residential customers.

Market 4

Publicly available international telephone services provided at a fixed location for residential customers.

Market 5

Publicly available local and/or national telephone services provided at a fixed location for non-residential customers.

Market 6

Publicly available international telephone services provided at a fixed location for non-residential customers.

Fixed telephony – wholesale market

Market 8

Call origination on the public telephone network provided at a fixed location. For the purposes of this Recommendation, call origination is taken to include local call conveyance and delineated in such a way as to be consistent with the delineated boundaries for the markets for call transit and for call termination on the public telephone network provided at a fixed location.

Market 9

Call termination on individual public telephone networks provided at a fixed location.

Market 10

Transit services in the fixed public telephone network.

Mobile– wholesale market

Market 15[2]

Access and call origination on public mobile telephone networks.

Market for which the public consultation publication is expected

Leased lines– retail market

Market 7

The minimum set of leased lines (which comprises the specified types of leased lines up to and including 2Mb/sec as referenced in Article 18 and Annex VII of the Universal Service Directive)

Leased lines – wholesale market

Market 13

Wholesale terminating segments of leased lines.

Market 14

Wholesale trunk segments of leased lines.

Markets for which the public consultation has been initiated

Radio diffusion Services

Market 18

Broadcasting transmission services, to deliver broadcast content to end users.


Market 17

The wholesale national market for international roaming on public mobile networks.

(Market 20)

SMS call termination on individual mobile networks

The ARCEP retained 18 relevant markets, defined by the Commission in its recommendation, specifying these markets and adding two others

The ARCEP retained the whole electronic communications sector’s relevant market defined by the Commission, i.e. the 7 markets of goods and services provided to final user (retail markets) and the 11 markets of access by operators to necessary installations to provide goods and services to final users (wholesale market). The ARCEP then proceeded to fine-tune the demarcation of goods and geographical areas in order to take into account the local particularities, such as the overseas departments.

Furthermore, the ARCEP has conducted a detailed analysis of the three cumulative conditions (presence of barriers to market entry, impediments to the development of competition and lack of vigorous competition and of sufficient efficiency of competition law) that a market must fulfill in order to be considered a relevant market, though not planned by the list of recommendations of 11 February 2003. This is how ARCEP identified two additional markets: the mobile phones sector was identified as the market for text messaging on individual mobile phone networks and the broadband area was identified as the market of broadband access delivered nationally.

The notion of Significant Market Power

The Significant Market Power in a market can be either individual or collective

Article L. 37-1 of the posts and telecommunications code implementing Article 14 of the Framework Directive provides that any operator who, individually or jointly with others, in a similar situation to one in a dominant position enabling him to act independently from his competitors and consumers, is considered as having Significant Market Power in the electronic communications market.

Market shares are an essential but not exclusive criterion in the determination of Significant Market Power of an operator in a market

According to the case law, the ARCEP may consider that holding a market share of more than 50% allows – except in exceptional circumstances - to establish the existence of a Significant Market Power, it can also take into account other more qualitative factors in its analysis (size of the firm, essential facilities, technology progress, diversification of goods and services, existence of economies of scale …), endeavouring to pinpoint those which appear as the most appropriate to the designation of powerful operators in the framework of each market.

ARCEP includes the notion of progressive decrease of market shares of the dominant operator in its analysis

The ARCEP integrates the notion of progressive drop-off of the dominant operator’s market shares by limiting, over a period of time, the consequences of certain obligations imposed on operators that have a Significant Market Power in the relevant markets.

In this way, the ARCEP is obliged, at the end of the set time period, to once again appraise the dominant or non-dominant nature of each operator’s position, taking into account the evolution of the market shares and if necessary to revise the obligations that were imposed on them if their share of the market has decreased.

The ARCEP refuses to recognise the existence of the notion of "countervailing buying power" - contrary to the Competition Council - but takes it into account in its analysis

In its decisions concerning Market 16, ARCEP took into account the notion of “countervailing buying power”, but did not recognise its existence. This is contrary to the findings of the Competition Council.

Some of these recent decisions are subject to an action for annulment. One of the grounds for annulment is that the ARCEP failed to recognise the existence of factors counter-balancing the Significant Market Power of smalls operators like buyers’ bargaining counter power for example.

The remedies retained by the ARCEP

The table in the enclosure enables to declare that the ARCEP neither recommended solutions which are not mentioned in the Access Directive, nor imposed solutions toward the Universal Service Directive.

With respect to the Market 15, the Commission did not really make use its power to veto but indicated to the ARCEP that it had to deepen its analysis

On 14 April 2005, the ARCEP notified to the Commission a draft of a decision concerning the Market 15 which suggests requiring French mobile operators to meet reasonable requests on access to MVNO.

Since this market has undergone recent developments throughout the signing of several MVNO agreements by two mobile network operators (SFR and Orange), the Commission has asked the ARCEP to supervise the consequences of these agreements on the competition on this market and consequently to revise the draft of its decision by the end of 2006 at the latest.

Some actions for annulment have been exercised against the ARCEP’s decisions, but no decision has been made yet

The two decisions taken by the ARCEP n° 04-938 on 9 December 2004 and n° 05-0117 on 1 February 2005 concerning the market 16 and the decision n° 05-277 concerning the Market 11, are at currently subject to actions for annulment.

A version of this article was first published in the September 2005 edition of the IBA's Communications Law Newsletter.

[1] French regulator for electronic communications

[2] The Market 15 having known recent developments, the Commission has asked the ARCEP to watch the effect of such changes on the evolution of competition on this market and to review the draft decision it notified by the end of 2006. It is hence unlikely that the ARCEP's final decision will be taken quickly.