TELECOM ATTORNEY ON FRANCE'S ICT STRENGTHS AND WEAKNESSES

UNCLAS SECTION 01 OF 02 PARIS 007511 SIPDIS SENSITIVE SIPDIS STATE EB/CIP AND EUR/WE PLEASE PASS TO USTR JMCHALE AND KSCHAGRIN FCC FOR TWEISLER COMMERCE FOR NTIA JUSTICE FOR KWILLNER E.O. 12958: N/A TAGS: ECPS ECON FR SUBJECT: TELECOM ATTORNEY ON FRANCE'S ICT STRENGTHS AND WEAKNESSES NOT FOR INTERNET DISTRIBUTION ¶1. (SBU) Summary. On November 16, Hogan and Hartson Attorney (and long-time observer of the French telecoms sector) Winston Maxwell told us that poor consumer protection and nonpublic frequency management were the two areas detracting from France's otherwise robust implementation of EU directives. The EU, with the exception of Germany, was leaning toward regulating new digital fiber networks and traditional copper networks in the same way to ensure a level playing field and prevent market dominance. France would not permit internet providers to "wall-off" part of the internet, although they would be able to charge for premium services. A merger between telecom regulator Autorite de Regulation des Communications Electroniques et des Postes (ARCEP) and audiovisual regulator Conseil Superieur de l'Audiovisuel (CSA) would rationalize spectrum management, but the disruption involved could offset any efficiency gains. End summary. ¶2. (U) On November 16, econoff met with Hogan and Hartson Attorney Winston Maxwell to discuss French implementation of EU telephony and information society directives, data protection, regulation of next generation telephone networks, "Internet neutrality," and the possibility of a merger between telecom regulator Autorite de Regulation des Communications Electroniques et des Postes (ARCEP) and audiovisual regulator Conseil Superieur de l'Audiovisuel (CSA). Maxwell has practiced in Paris for twenty years, and has a vast array of contacts throughout the French administration. French Implementation of EU Directives - - - - - - - - - - - - - - - - - - - - ¶3. (SBU) According to Maxwell, the wide consumer choice regarding long distance and Internet providers is a testimony to robust French implementation of EU telephony and information society directives. The two areas for improvement are consumer protection and frequency management. On consumer protection, most European communications regulators have a section that receives and tracks consumer complaints on various providers. The publication of these statistics themselves embarrasses market providers to minimize inconveniences to customers. The lack of such a division in ARCEP has led to quite bad customer service, which has inspired a spate of law suits in French courts. On spectrum management, he said that France needed to debate what to do with the spectrum that would become available after the 2011 switch from analog to digital television. A bill that the Senate is considering proposes to provide this spectrum back to the broadcasters. However, Maxwell believed that the broadcasters would not make full use of the spectrum, and they were able to maintain control of the spectrum only because of their political clout. He was pessimistic that France would encourage a public debate about spectrum use since GOF officials preferred to have fewer constraints on their own decisions about spectrum allocation. Regulation of Next Generation Telecom Networks - - - - - - - - - - - - - - - - - - - - - - - - 4.(SBU) Maxwell believed that, with the exception of Germany, the EU has already come to a consensus not/not to provide a regulatory holiday for next generation telecom networks, contrary to the policy adopted by the U.S. Most European countries believed that regulating new digital fiber networks and copper telecom networks in the same way would ensure a level playing field and prevent market dominance. Maxwell said that, in France, the ducts containing the fiber networks will likely be open for competitors to lay their lines, but ARCEP will not permit operators to have monopolies in various buildings. The GOF will probably require telecom firms investing in fiber networks to lease their lines at a "reasonable" but not "extortionate" rate. The policy would grant ARCEP a large amount of discretion to judge whether to provide access on a case-by-case basis. Internet Neutrality - - - - - - - - - - ¶5. (SBU) Europe will most likely adopt a policy consistent with existing FCC orders, Maxwell predicted. France and most other EU Member States will not allow any internet service provider to "wall off" or prevent access to existing free internet sites. However, internet service providers will be able to offer "premium packages" that allow video on demand, video downloads, faster services, or other improved services. Possibility of ARCEP and CSA Merging PARIS 00007511 002 OF 002 - - - - - - - - - - - - - - - - - - - ¶6. (SBU) Although ARCEP was in charge of spectrum management, Maxwell explained, CSA handled spectrum allocated to broadcasters. Combining the two entities might result in a more rational management of spectrum. However, the UK's experience shows that the merging of various regulators could be far more expensive and troublesome than envisioned. Political consideration could always overrule these considerations, however. STAPLETON