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