Brussels strongly criticizes Arcep’s regulation of unbundling prices

2023-12-05 17:24:00

His position was eagerly awaited by all French operators. At the end of last week, the European Commission published its opinion on the evolution of the regulation of Arcep, the French telecoms watchdog, in terms of fixed Internet for the period 2024-2028. She was, to say the least, critical of the authority’s project, which will be particularly structuring for the sector over the next five years. The subject is as complex as it is technical. But it is crucial for the future of French telecoms and competition between players.

In its missive, Brussels warns in particular of the risk that Orange, the historic and dominant operator in France, benefits from a “interest” linked to an increase in the price of unbundling. That is to say the rate paid per line by alternative operators (SFR, Bouygues Telecom and Free) to access its copper network and provide ADSL to their customers.

“Encouraging migration to fiber”

Arcep intends, in general, to pave the way for an increase in the unbundling price in territories where fiber is available. The objective is both to encourage subscribers to switch from ADSL to fiber, and at the same time to encourage the closure of the copper network. Arcep has always been clear: it is time for fiber networks, now available to 86% of French people, to replace the old copper network, which is also much more energy intensive. In his eyes, there is no economic logic in maintaining two expensive fixed Internet networks on a national scale.

Brussels is, fundamentally, the telecoms policeman. “The Commission agrees that a gradual relaxation of regulatory obligations, in particular the obligation of price control [le prix du dégroupage, Ndlr]imposed on the copper network might encourage migration to optical fiber”she writes.

The big anger of Xavier Niel

But she is reluctant to agree on the terms under which certain increases should see the light of day. The devil is in the details. Firstly, Arcep intends to increase, on January 1, the price of unbundling by 1.23 euros, to 11.27 euros. This point does not pose a problem for the European Commission. That said, Arcep plans to add to this amount an increase of 75 euro cents in 2024, then 1.50 euros in 2025, for territories where 95% of homes can be connected to fiber. This device, on the other hand, makes the commission cringe. “In some areas, the increase in wholesale copper access prices might last up to six years in total”, she laments. And in the best case scenario, “if Orange is not late in carrying out its technical closure plan [définitive, Ndlr] of its copper network, by 2030 »she adds in a footnote.

Last March, Xavier Niel, the owner of Free, had a big rant on this subject. During a Senate hearing, the billionaire deemed this prospect unacceptable. “We agree for an increase in the price of unbundling – and even deregulation – one year before the practical closure of the copper network, but not five years before”, he got angry. In this case, he added, “everyone, including Orange, will hurry” to migrate its ADSL subscribers to fiber. “But today, what we are being sold is five years”grumbled the founder of Free, castigating “an Arcep completely won over to Orange, which folds in front of Orange”. Behind the scenes, Bouygues Telecom and SFR are also very upset.

The European Commission considers, like them, that this increase in the price of unbundling must be implemented for a much shorter period, “two to three years before the closure of the copper network”. She also believes that this increase should only concern territories where there are “competition on infrastructure between fiber optic suppliers”. Otherwise, insists Brussels, “the competitive pressure exerted by the fiber network might, particularly in more rural areas, not be sufficient to constrain Orange’s behavior, particularly following the national commercial closure of the copper network [où il sera impossible de souscrire à un nouvel abonnement à cette technologie, Ndlr] announced for 2026 ».

Finally, there is one last mechanism that Arcep wishes to put in place: this involves, for territories that have fiber, allowing Orange to set the unbundling price itself. Two criteria were retained: the area concerned must have been subject to a commercial closure of the copper network for six months, and its technical closure must take place in less than two years. If Orange’s technical closure notices are not respected, the historic operator will have to “return any sums unduly received” to alternative operators, reminds the European Commission.

The green light from the commission

But Brussels fears that Orange will not play the game. It calls on Arcep to closely monitor the operator’s actions and not hesitate to sanction it:

“The commission urges Arcep to guarantee the effective application of the reimbursement mechanism by adopting additional measures, such as the payment of interest by Orange,” she specifies. In addition, the commission strongly encourages Arcep to prevent Orange (for example by automatically imposing additional penalties) from obtaining a financial benefit from the extension of the closure process through non-compliance with the deadlines set for technical closure. »

These fears from Brussels target the heart of Arcep’s regulatory project. Will the telecoms policeman then have to “review your copy”, as an alternative operator welcomes? Asked by The Tribune, the regulator does not wish to comment at this time. But if there are changes, they should be at the margins. As surprising as it may be, the commission has not formally issued, as part of its procedure, “serious doubts” as for the Arcep project. Which is legally equivalent to a green light. Otherwise, the file, which was until then in « phase 1 »dit-on in Brussels jargon, would have switched to « phase 2 ». He would then have been the subject of a thorough investigation, with perhaps the obligation, in finefor Arcep to revise its project.

Arcep should stick to its positions

In other words: Arcep must only “take into account comments” of the commission, as explains Berec, the body of European telecoms regulators. But nothing obliges it to turn everything upside down… At this stage, and subject to the final decision of the college of regulators, Arcep seems, according to our information, to stick to its positions. To the great dismay of SFR, Bouygues Telecom and Free, who have been having a hard time with this increase in unbundling prices for months. « If Arcep doesn’t really move, it doesn’t change much”laments a manager of an alternative operator. The regulator intends, in any case, to adopt its text by the end of the year.