This is a "historical"
text, a real "milestone in the history of telecommunications in France"
insofar as it marks "the end of State monopoly of telephone services",
the reform stemming from the Telecommunications Act of 26th
July 1996, which was required due to community directives as well as technological
developments, arises from the challenges stemming from modernisation by
fully opening the sector up to competition. Nevertheless, this opening
certainly does not mean the end of public services, and the legal text
endeavours to define "regulated competition" based on the principle
that competition is not an enemy of public services1.
The new article of the Post and Telecommunications Code L.32-1 (hereinafter
referred to by its initials in French "CPT") portrays this aim
for balance and defines the three aspects of the mechanism: free business
practice, maintenance and development of public services, independence
of regulatory function in relation to network operator or service provider
duties. The regulatory function is carried out on behalf of the State
by the Telecommunications Minister and the Telecommunications Regulatory
Authority (hereinafter referred to by its initials in French "ART").
The Independent Regulatory Authority
was set up on 1st January 1997 by virtue of Article L. 36 of
the CPT, in line with the recommendations proposed in the Lasserre report,
which, as early as April 1994, stressed the difficulty in the compatibility
of the StateÕs role as a player in the market with that of a regulatory
body. At the same time, independent agencies based on the British OFTEL
model were created in other European countries. The essential argument
put forward to justify this decision is, as the main operator in the market
is still under State control, that the latter cannot be "a judge
as well as a player" in the market at the same time: "the State
cannot hold the position of majority shareholder in France Telecom and
at the same time be expected to guarantee compliance with market laws
with the required impartiality2";
in order to guarantee "the credibility" of the regulatory function
and to instil a feeling of trust among investors, the two roles needed
to be separated. With its independent administrative authority, France
created a model that had been tried and tested and was no longer a legal
innovation. This creation has, however, been fiercely criticised, in particular,
concerning the powers the law has granted to the ART.
One of the features of the independent
administrative authority is the combination of powers that are usually
kept separate3 : the regulatory function
assigned to it implies that it can hold very varied prerogatives, which
range from determining generally applicable rules to controlling and sanctioning
powers, including decision-making to settle disputes. The ARTÕs original
concept lies, on the one hand, in the fact that it is the first sectorial
authority within the scope of regulating network industries, and on the
other hand, in the fact that it has regulatory, sanctioning and arbitration
powers. In the telecommunications field, alongside the common law regulation
of competition entrusted to the Competition Council, the ART has been
entrusted with the task of technical and organisational regulation of
the telecommunications market4. In particular,
it may deal with cases related to refusal of interconnection, failure
in commercial negotiations or a dispute regarding the conclusion or performance
of an agreement for interconnection or access to a telecommunications
network due to failure in agreement of either party, in accordance with
Article L. 36-8-I of the Post and Telecommunications Code. This specific
possibility to regulate interconnection disputes between private operators
allows the ART to create a subjective interconnection regulation to benefit
those competing with the historic operator. This new form of legal regulation
provides the possibility to permanently adapt the interconnection regulatory
scope, as the ART sets the aims of its strategy to favour development
of the market by means of individual decisions.
The Constitutional Council, which
deals with protests regarding, above all, the powers granted to this new
independent administrative authority, states, on the one hand, that the
scope of the regulatory authority granted to the ART is in accordance
with its case law, since the regulatory power granted to this authority
has a limited scope of application. However, it has been obliged to adopt
decisions related to granting repressive competence and transferring decisions
adopted regarding settlement of disputes to the judge of the contentious
court5.
Concerning the repressive powers,
the fact that the administrative authority holds sanctioning powers may
seem surprising, as each of the three powers mentioned above, according
to the classical approach of separation of powers, must remain within
the limits of its competence: "the law should set the rules (and
not administer or judge), the judge should settle disputes and impose
punishment and sanctions (and not legislate or administer), the executive
authority should administer and manage (and not legislate or judge)"6.
However, by ratifying the case law of the Council of State, the Constitutional
Council accepts the development that has taken place in the past fifty
years towards recognition of the judge- administration. Ruling number
88-248 DC dated 17th January 19897
explicitly recognises that the law may "grant an independent administrative
authority the responsibility for ensuring compliance with the constitutional
principles in the field of audio-visual communications with sanctioning
power, within the limits required to accomplish its task" and that
it is the responsibility of legislators to "include further measures
for exercising such powers, intended to safeguard constitutionally guaranteed
freedom and rights". It is in line with this case law, also applied
to the stock exchange transactions Commission8,
that the Constitutional Council has acknowledged compliance with the Constitution
when granting the ART sanctioning powers in cases of failure to comply
with the legislative and regulatory provisions set forth in the Post and
Telecommunications Code, without this affecting in any manner the principle
of separation of powers.
As regards the power to settle disputes,
prior to the Act dated 26th July 1996 the duty of arbitration
was recognised as being held by the Telecommunications Minister by virtue
of the provisions in the specifications of France Telecom9
under the control of the administrative court. Therefore, the Administrative
Court of Paris could be competent for the legality of this administrative
procedure due to the authority to supervise France Telecom, intended for
unilaterally settling disputes, by virtue of the regulatory procedures
stipulated in the specifications10. As
for the text of Article L. 36-8 of the CPT11,
this was directly based on the draft of the interconnection directive
decreed by the European Parliament and Council12,
in particular, Article 9 paragraph 5 thereof, which sets forth that "in
the case of interconnection disputes between bodies within a Member State,
on request of either of the parties, the national regulatory authority
of such Member State must adopt measures in order to settle the dispute
within a term of six months counted from the date of the request. Settling
the dispute must be a fair balance between the legitimate interests of
each party." However, the nature of the decisions adopted by
the ART within the scope of this almost jurisdictional power remains administrative.
The Constitutional Council, in fact, states that "the decisions
adopted by the Telecommunications Regulatory Authority, the administrative
power, in accordance with sections I and II of Article L. 36-8 of the
Post and Telecommunications Code, which are imposed on the parties that
refer to this authority, consist of the executive decisions adopted by
exercising the prerogatives of public power." Consequently, the
transfer of decisions adopted to settle disputes to the contentious court
is not clear, even when it is encompassed within the rationalism of the
case law derived from ruling number 86-224 DC dated 23rd January
1987 regarding the Competition Council13.
The Constitutional Council deems that, in this specific case, "the
decisions adopted by the authority may settle claims pertaining to competition
law or commercial or technical disputes arising from negotiations or performance
of interconnection agreements, which, by virtue of Article L. 34-8 of
the CPT, are considered private law agreements; the same occurs in the
case of disputes between operators regarding the possibilities and conditions
of shared use among them of existing facilities or conditions of compliance
with Article L. 34-4 of the same code for agreements pertaining to the
provision of telecommunications services covered by this article; submitting
the dispute to the authority by either party is optional; in the case
that operators choose not to submit the case to the ART, the claims must
be brought, depending on each specific case, either before the Competition
Council and, in the case of a decision is challenged, before the Appeal
Court of Paris, or before the Competent Court; the law referred to above
thus aims to unify all the specific appeals set forth in sections I and
II of Article L. 36-8, under the control of the Appeal Court (cassation)".
Consequently, the Constitutional Council upholds "that this
specific and limited development of jurisdictional competence rules can
be justified due to the need for suitable administration of justice; therefore,
it does not disregard the constitutional value principal claimed by the
parties submitting a case to court" according to which the nullity
or redress of decisions adopted by exercising public power prerogatives
are within the competence of the administrative jurisdiction.
Under these terms, the ART is the
first independent administrative authority14
to be granted quasi-judicial power to settle disputes, a power that is
exercised under the supervision of the court, in compliance with the litigation
guarantees set forth in the regulations for fair trial.
1- Dispute settlements, pursuant to sections I and II of Article L. 36-8
of the CPT, meaning executive decisions adopted by exercising public power
prerogatives, under the supervision of the court.
Since it has been set up, the Authority has adopted
43 decisions regarding settlements of disputes, 2 in 1997, 16 in 1998,
6 in 1999, 9 in 2000, 10 in 2001 and has decreed rulings in relation to
two further requests for precautionary measures. The Appeal Court of Paris
has already decreed eleven rulings on appeals against the decisions adopted
by the ART, of which one is a claim for a stay in enforcement, up to now
confirming the decisions adopted. The Appeal Court (cassation) has decreed
a dismissal ruling. This case law has allowed not only the applicable
scope of article L. 36-8 CPT to be specified, in particular, regarding
the competence of the Authority and admissibility regulations, but it
also defines the extension of the powers of the authority regarding the
contents of the decisions for settling disputes.
A/ The applicable scope of article L. 36-8 of
the CPT :
Under the terms of article 36-8
of the Post and Telecommunications Code: "I- In the event interconnection
is refused, there is failure in commercial negotiations or disagreement
on the conclusion or performance of an agreement regarding interconnection
or access to a telecommunications network, the Telecommunications Regulatory
Authority may be called upon to settle the dispute by either of the parties.
(É) In the case of a serious and immediate infringement of the rules
governing the telecommunications sector, the Authority may, after having
held a hearing of the parties involved, order precautionary measures in
order to ensure, in particular, the continuity of operation of the network.
(É) II. The Telecommunication Regulatory Authority may also settle
disputes related to the following: 1. The conditions for compliance, stipulated
in the last paragraph of article L. 34-4, regarding agreements with excluding
or restricting clauses for providing network telecommunication services15,
mentioned in the first paragraph of the aforementioned article; 2. The
possibilities and the conditions for shared use between operators, as
stated in Article L. 47, of existing facilities located on private property.
In addition, this gives rise to a public consultation of all the parties
concerned before any decision can be taken imposing shared use between
operators of the facilities mentioned in 2. 3. The technical and financial
conditions for providing subscriber lists stated in Article L. 33-4."
Paragraph 3 as well as the last
paragraph of 2 in II of article L. 36-8 have been included by the law
dated 25th July 200116 regarding
adapting the Intellectual Property Code and the Post and Telecommunications
Code to community law. The report17 to
the President of the Republic related to the aforementioned law points
out, in this respect, that, within the scope of adopting the directive
"ONP voice telephony"18, the
procedure for settling disputes concerning the conditions for providing
lists by the Authority is fully justified if the complexity of the matter
is taken into account.
However, when a claim is brought before the Authority
to settle a dispute, before adopting a decision on the grounds of the
case, it must ensure that it is actually competent and that the claim
is admissible.
a/ Competence of the ART to settle disputes :
In various rulings, the Appeal Court
of Paris has expressly referred to the decisions of the Authority to confirm,
on the one hand, its competence, and on the other hand, its lack of competence
to settle certain disputes. In two rulings decreed on 28th
April 1998, the Court specified that Internet access services are telecommunications
services, thus justifying the competence of the Authority19.
France Télécom sustained before the
Authority, subsequently before the Appeal Court, that the operation agreements
entered into between France Télécom and Paris TV Câble,
and those between France Télécom and the Compagnie Générale
de Vidéocommunications do not contain excluding or restricting
clauses for providing telecommunications services. Upholding the analysis
made by the Authority on the concept of a restricting or excluding agreement
related to providing telecommunications services via cable networks in
the sense of article L. 34-4 of the Post and Telecommunications Code,
the Appeal Court deemed that "the Authority (...) being (É) competent
since the agreement in force contained restrictions of a legal and technical
nature for providing the telecommunication services and, therefore not
allowing these telecommunications services to be provided that required
access to the Internet".
On 15th December 1998,
the Appeal Court, this time confirmed a decision dated 24th
June 199820, whereby the Authority declared
that it lacked the competence to settle a dispute between Copper Communications
and France Télécom related to the ethical control of telematic
services. In the basic grounds of the case, the following was alleged
"the Authority that acts pursuant to the provisions of the Post
and Telecommunications Code and its applicable regulations, as stated
in article L. 36-6 of this Code, has not been vested either with the power
to interpret laws and regulations or to control the lawfulness of a regulation,
when the object has been precisely to create a controlling mechanism of
the contents of Audiotel services and services provided by telematic or
telephone points of sale; thus it is neither entitled to analyse the clauses
included in agreements by applying the legal demurrer system set forth
for Audiotel services; which means that, without undervaluing the limits
of its powers and without distorting the dispute brought before it, the
Authority duly declared that it lacked the competence to settle the dispute
brought by the company Copper Communication." This reasoning
was confirmed by the Appeal Court (cassation) in a ruling dated 14th
November 2000.
On 16th March 1999,
the Appeal Court of Paris applied this case law to dismiss three appeals
against decisions ruled by the Authority on 4th September 1998,
and it declared that it lacked the competence to rule on a
dispute brought by the telematic provider companies To Com21,
Audiopresse22 and Even Média23
respectively against France Télécom related to ethical control
of telematic services.
Similarly, the appeal brought
by the company Spacetel against the decision adopted by the ART on 9th
September 199924 resulted in a ruling
of dismissal by the Appeal Court of Paris on 22nd February
2000, which stated that "the Authority is neither vested with
the power to interpret the law and regulations nor may it control the
lawfulness of the decree dated 25th February 1993; it is neither
empowered to adopt a decision on the claim of ownership of a trademark".
The Authority has also been
led to stipulate, on the one hand, that it cannot, on the grounds of the
competence granted by the provisions in article L. 36-8 of the Post and
Telecommunications Code, decide upon the alleged abuse of a dominant position
by France Télécom25, moreover,
the disputes between two providers of public telecommunications services,
other than telephone services in the sense stated in the provisions set
forth in article L. 34-2 of the Post and Telecommunications Code, are
not included in those it is competent to rule upon, within the scope of
settling disputes 26.
b/ Admissibility of claims :
The very fact that a dispute has arisen, in the sense
of article L. 36-8, is a condition for the admissibility of a request
to settle the dispute. In addition, pursuant to article R. 11-1 of the
Post and Telecommunications Code, completed by article 13 of the internal
regulations of the ART, any request for precautionary measures may be
brought in an accessory manner to the main claim brought before the ART.
It may be submitted at any time in the procedure and must have due grounds.
The investigator, within the scope of examining the case, must study the
facts that the dispute is based on and verify whether the basic claim
is admissible. However, during the time of examination, a priori, there
is no control regarding the admissibility of the claim.
The party making the request
must stipulate that negotiations have broken down concerning the very
basis of the dispute and prove that the questions raised have actually
been discussed and the results have been unsatisfactory or an agreement
has not been reached27. A claim may also
be brought before the Authority to settle a dispute between telecommunications
operators that have signed a public network interconnection or access
agreement, by issuing an express reserve regarding such agreement on the
points thereof that appear to still be in dispute. The Authority thus
settles the dispute related to the failure to reach an agreement there
may still be between the parties28.
In addition, the fact of negotiations
taking place on the object of the dispute included within the scope of
the overall negotiations regarding other points does not affect the admissibility
of the claim29.
On the other hand, the Authority
considered that the counter-claim conclusions submitted by France Télécom
during the examination stage were not admissible30,
due to the fact that although the conclusions of the parties may be modified
or further claims could be submitted during the proceedings, providing
the conditions for admissibility stated in article 36-8 are fulfilled
and there is sufficient nexus causal with that submitted in the original
claim, when all the documents of the case had been examined, however,
it was concluded on the date of the aforementioned claims by the company
France Télécom that no refusal had been opposed by the plaintiff
in the claim and that no negotiations had been started between both parties
regarding the financial conditions of the interconnection services in
question. These grounds were aimed at leaving the counter-claim conclusions
channel open preventing this from restricting the requirement for previous
negotiations, which is the basis of the procedure for settling disputes.
Regarding the requests for precautionary measures,
article L.36-8 of the Post and Telecommunications Code sets forth that
in the case of serious and immediate infringement of the regulations governing
the telecommunications sector, the Authority may, after having heard the
parties involved, order precautionary measures for the purpose of, in
particular, ensuring that the network continues to operate. These provisions,
completed by article R. 11-1 paragraph 4 mentioned above, result in the
Authority not being allowed to order precautionary measures until a request
has been brought to settle a dispute, which must fulfil the conditions
for admissibility stipulated in the aforementioned article L. 36-8 and
that there are sufficient grounds for such request for precautionary measures.
On two occasions, the Authority
has needed to adopt a decision on requests for precautionary measures
: the first time within the scope of a dispute between Siris and France
Télécom related to interconnection for routing Internet
traffic to destination numbers with the format 0860PQMCDU paid by the
caller31, the second after a claim had
been brought by the company UPC France related to routing Internet traffic
to destination numbers with the format 0860PQMCDU. The first case resulted
in a ruling of dismissal due to the fact that the act must be both serious
and immediate and in the case in question, these cumulative conditions
had not been fulfilled. In the second case, the request for precautionary
measures was admitted, with rather lengthy grounds in order to explain
the legal criteria applied: "precautionary measures may be granted
when, on the one hand, the nature of the facts submitted to the Authority
is sufficient to be acceptable as the direct and certain cause of an infringement
related to the regulations governing the telecommunications sector, and
that the aforementioned infringement is of a serious nature, in particular,
regarding the importance of the regulation in question or the harmful
consequences caused by the infringement to the operators involved for
access by their clients to the telecommunication services of other operators
or for their possibility to freely communicate with other users. Moreover,
such infringement must also be to a certain extent immediate, and thus
urgent."
B/ The contents of the regulations
32 :
Article L. 36-8 of the Post and Telecommunications Code
grants the Authority the power to specify the fair technical and financial
conditions so that special interconnection or access is guaranteed.
On the one hand, both rulings on 28th April 1998 by the
Appeal Court of Paris, in two basic grounds, confirmed the powers that
the law granted to the Authority to settle disputes between operators.
France Télécom sustained that the Authority had overstepped
its powers by stipulating the practical conditions whereby the network
owner must perform the work to upgrade the network. The Court formally
replied to such argument by deeming that "according to article
L. 36-8 of the Post and Telecommunications Code, the decision by the Authority
requires fair technical and financial conditions, in which the special
interconnection or access to telecommunications services must be guaranteed
; under the conditions set forth in article L. 36-8, the Authority is
responsible for settling disputes related to compliance with the agreements
stipulated in article L. 34-4; It thus follows that the Authority is vested
with the power to issue specifications, even decree restraining or non-restraining
injunctions, in order to enable suitable performance of the works and
services required to ensure free access to telecommunications services."
In addition, France Télécom
accuses the Authority, by its decisions of 10th July 199733,
to have acted against its ownership rights and contractual prerogatives.
The Court stipulated that "concerning contractual prerogatives,
the restrictions imposed have been stipulated by law which, for economic
public order reasons, has entrusted to the Regulatory Authority, when
exercising its public power prerogatives, for the task of imposing an
enforcement decision on the parties involved in a claim to settle their
disputes related to signing or performing a telecommunications network
interconnection or access agreement". The Court has thus confirmed
that the Authority may determine a specific schedule in its decisions
for performing the works and services required to operate access services
to the Internet. Above and beyond the legal arguments, there was a great
deal at stake in the two decisions on 10th July 1997; it meant
opening high-speed access to the Internet for 3 millions homes. For this
reason, any adaptations deemed as necessary must be carried out quickly
on the Plan Câble networks according to the schedule set by the
Authority.
On the other hand, in a ruling
on 27th June 2000, the Appeal Court stated the following: "The
Authority, within the scope of its powers granted by virtue of article
L. 36-8-1, may order France Télécom to provide secure interconnection
services for subscribersÕ switching, concerning the facilities owned by
the latter, which are not easily reproducible and thus access is indispensable
for Télécom Developpement to perform its business in the
market34." This confirmation
was all the more expected, as the attacked decision was the first by the
Authority concerning the quality of telecommunications network services.
It is of particular importance because it guarantees that users will receive
reliable high quality services on telecommunications networks, during
a period in which operators are progressively deploying their networks
and service offers are multiplying.
In addition, from then on, by
application of article L. 34-8. I in its text resulting from the Act of
25th July 2001: "operators of networks open to the
public are entitled, under the objective and transparent conditions of
the ownersÕ interconnection requirements, to an authorisation granted
by application of articles L. 33-1 and L. 34-1. The interconnection request
may not be refused if it can be justified regarding, on the one hand,
the needs of the applicant, and on the other hand, the capacity of the
operator to provide such interconnection". By virtue of certain
principles already contained in the previous text of these provisions35
in which the ART, in its decision dated 26th May 2000, decreed
a ruling on a dispute between 9 Télécom Network and France
Télécom, it decided that France Télécom must
fulfil the request for indirect interconnection with third party billing/collection
on behalf of 9 Télécom Network for routing internet traffic
to destination numbers with the format 0860PQMCDU paid by the callers
of 9 Télécom Network36.
However, the Authority may not
agree to a claim, within the scope settling a dispute, for the purpose
of decreeing regulations related to the field of application of article
L. 36-6 of the Post and Telecommunications Code37,
which are subject to a decision being adopted by the Telecommunications
Minister. Otherwise, as it would be committing a misappropriation of proceedings
implying a misappropriation of power, which means that the decision would
be deemed as null and void38.
2- The parties that bring a claim before the ART
to settle disputes benefit from procedure guarantees stemming from fair
trial regulations.
By virtue of the provisions in article L. 36-8 of
the Post and Telecommunications Code, the Authority must adopt a decision,
within a specific term by decree of the Council of State, after allowing
the parties to put forward their observations. This decision must have
sufficient grounds. The Authority must make its decisions public, except
for trade secrets protected by law.
These regulations have been
completed, on the one hand, by article R. 11-139
of the same code which states: "The term in which the Authority
must adopt its decisions mentioned in I of article L. 36-8 is set at three
months, counted from a claim being brought by one of the parties. However,
for the purpose of conducting or arranging to be conducted any investigation
or obtaining any expertÕs opinions that may be required, the Telecommunications
Regulatory Authority may extend this term to six months. The decision
by the Telecommunications Regulatory Authority must be notified to the
parties by registered letter with acknowledgement of receipt. The
Telecommunications Regulatory Authority must inform each of the parties
of the observations and documents submitted by other parties and must
determine the term in which they must be replied to. A hearing of the
parties may be held."
These provisions imply that
settlement of disputes must protect adversarial action and trade secrecy
within the maximum term of six months. The decision by the Authority number
99-528 dated 18th June 1999 regarding internal regulations40
specifies the ways to implement these principles with the aim of transparency
for the operators involved and for the legal security required regarding
the case law in article 6-1 of the European Convention for Protection
of Human Rights and Fundamental Freedoms (ECHR). In addition, the litigation
guarantees held by the parties are reinforced by the possibility to bring
an appeal for nullity or redress of a request to suspend enforcement.
Firstly, the Authority ensures that the decision
is adopted within the regulatory term granted for such purpose. The internal
regulations thus sets forth the following in article 10 : Procedure: "In
order to respect the term of three months as stated in article
R. 11-1 of the Post and Telecommunications Code and the adversarial action
principle, upon reception of the full claim, the head of the legal department
may invite the parties to meet in his/her presence to define a provisional
schedule by mutual agreement for the dates when their observations must
be submitted. (É) The head of the legal department will determine
the term for the parties involved to reply to the observations and documents
to be submitted by the other parties, in particular, if no agreement can
be reached between the parties on a provisional schedule." As
a general rule, the head of the legal department determines an average
term, as follows: one month for the defendant to submit its observations
in its defence; two weeks for the plaintiff to submit a report in reply
to these observations in its defence; two weeks for the defendant to submit,
if need be, a second report in its defence in reply to these observations.
This procedural schedule must be arranged for preparing the case for the
judiciary jurisdictions in which the judge will decide with the parties
on determining the terms to exchange the reports and the closure of the
investigation procedure.
However, articles 9 and 10 of
the internal regulations specify that the term set forth in article R.
11-1 of the Post and Telecommunications Code does not begin until the
claim is complete. In a ruling on 28th April 1998 the Appeal Court of
Paris confirmed that "the litigation regulations thus defined41
are not limited either due to inadmissibility or nullity, the only consequence
related to the incomplete nature of the claim is that the regulatory term
will not begin, within which the Authority must adopt a decision of the
dispute submitted, if it wishes to exercise its powers to request items
that are missing."
A/ The adversarial action :
The Appeal Court supervises the regularity of the
procedure, in particular, respecting the adversarial action set forth
in article L. 36-8. I, paragraph 2 of the Post and Telecommunications
Code. By virtue of article R. 11-1 of the same code, the Telecommunications
Regulatory Authority informs each party of the observations and documents
submitted by the other parties and determines the term in which they must
be replied to. The internal regulations of 1999 sets forth in article
10: Procedure "When the claim is complete, the head of the legal
department or his/her assistant appoints an investigator and an assistant
investigator. (É) The parties notify their observations and documents
to the Authority by registered letter with acknowledgement of receipt
or by submitting them to the headquarters of the Authority (É) When
the observations and documents have been received, the head of the legal
department, or his/her assistant, must send these documents by registered
letter with acknowledgement of receipt to the other party or parties,
stating the date by which their observations and attached documents to
support their reply must be submitted." In each of its decisions,
the Authority has chosen to revert to the full claims and the alleged
grounds of the parties.
Before the Appeal Court, France
Télécom accused the Authority of not having applied the
adversarial action principle by referring to a capital remuneration rate
determined in a previous ruling in both its decisions on 10th
July 199742. By its two rulings on 28th
April 1998, the Appeal Court has considered that "there is nothing
against the Authority settling the dispute, after a specific and full
examination of the circumstances of the case, as well as the proposals
of each of the parties and as it remains within the range of the rates
proposed, in view of the objective elements of a published administrative
act and especially as this is known by France Télécom, as
it is related to approval of its interconnection catalogue."
However, the Authority felt
that its internal regulations should be modified in order to reinforce
the guarantees regarding adversarial action, in view of the case law COB/Oury
by the Appeal Court (cassation) on 5th February 200043.
This ruling confirmed the decision by the Appeal Court of Paris annulling
a pecuniary sanction due to infringement of article 6-1 of the ECHR, by
virtue of which any party is entitled to their case being heard fairly,
in public and within a reasonable term, by an independent and impartial
court, established by law, to decide on the claims for their civil rights
and obligations. The Appeal Court has upheld, in the first place, a lack
of adversarial action as the sanction is based on a report that was never
notified to the party involved, secondly, organic confusion: the board
of the COB decided to question the actions and determined that there had
been misconduct, as the investigation report was drawn up by one of the
members that was then party in the deliberations.
This case law has led the Authority to adapt its
internal regulations, on the one hand, in carrying out the investigation,
on the other hand, regarding the hearing held. Thus, in order to avoid
any organic confusion the president of the ART no longer signs the notification
letters sent to the parties during the proceedings.
At the debate on 23rd
March 199944, Guy Canivet raised the question
to find out why an administrative regulatory authority is bound to heed
the principles of fair trial. The answer seemed simple to him even though
the question was raised. "The mechanism of the Convention is to
decree the guarantees when a jurisdiction adopts a decision on disputes,
rights and obligations of a civil nature or the certain satisfactory grounds
of any criminal accusation brought against it. If it was sufficient for
a State not to categorise the Authority, which is vested with such power,
as the jurisdiction, it is obvious that it could thus decide on application
or revocation of the guarantees of the Convention, which would be against
its logic and would divest it of any content. The European Human Rights
Court has thus deemed that, pursuant to the law of the Convention, the
categorisation of civil and criminal matters is independent. This reasoning
leads to the conclusion that the Authority is vested with power of civil
rights and obligations and due to this fact, it must provide the guarantees
of fair trial".
This analyse has been moderated, if not questioned
again, by a part of doctrine, supported by certain decisions adopted by
the European Human Rights Court by which it entitled the States to entrust
a power related to article 6 of the Convention to an institution, other
than a jurisdiction, without fulfilling all the principles of fair trial,
providing the decisions adopted by this authority are able to be appealed
with full jurisdiction and such jurisdiction fulfils all the guarantees
in article 6. In any case, the grounds of a ruling by the first division
of the Appeal Court of Paris on 27th June 2000, stating its decision on
the settlement of a dispute between the company Telecom Developpement
and France Télécom, in which the fact that it is subject
to the obligation of impartiality in the sense of article 6-1 of the European
Convention for Protection of Human Rights and Fundamental Freedoms, shows
that this is not questionable nor is questioned by the ART. In the basic
grounds, the Court deems that "Impartiality must be considered
according to a subjective process with the aim of determining the real
deep considerations by the judge in the circumstances and according to
an objective process leading to ensuring that sufficient guarantees are
provided to exclude any legitimate doubts at this stage". In
the case France Telecom questions a letter from the president of the ART,
which detailed all the points that the Authority wished to see included
in the interconnection catalogue project, prior to the dispute settlement
taking place. The Appeal Court points out that "the terms of the
letter do not express that a side had been taken or a prejudgement
had been made nor proves that there is any legitimate doubt on the impartiality
of those that had written such letter".
This latest case law also applies
investigation measures on the initiative of the investigator. By virtue
of article 12 of the internal regulations, the investigator or his/her
assistant may proceed in fulfilling the adversarial action principle for
all investigating measures that may be deemed useful. In particular, the
parties may be invited to provide, verbally or in writing, any explanations
required to settle the dispute. The head of the legal department or his/her
assistant is responsible for carrying out these investigating measures
and sending the notifications to the parties. The investigator very often
draws up a technical questionnaire, which the head of the legal department
or his/her assistant sends to the parties. By reference to case law of
the Council of State45 regarding administrative
sanctions, the terms of this questionnaire, because of the risk of irregularity
in the decision rendered and, in regard to the demand for impartiality,
must not give rise to any possibility to consider that the facts stated
have already been pre-determined. Due to the foregoing, fulfilment of
the regulations stipulated in article 6-1 of the ECHR does not seem to
imply a hindrance for the investigator to take, regarding the adversarial
action, all the initiatives required to obtain any items from the discussion
that could clarify which decision would be the most appropriate and fair
for the Authority to take.
In addition, by virtue of article
12 of the internal regulations, the investigator or his/her assistant
may order the officers of the Authority to make all the observations required
by visiting the sites, by agreement with the party concerned. The parties
are invited to be present during such visits. Regarding its investigating
powers, the board of the ART deliberates without the investigator being
present, fulfilling the case law both of the Appeal Court of Paris and
the Council of State46.
Regarding the hearing, article
R. 11-1 of the Post and Telecommunications Code is limited to overseeing
that the Authority hears the parties. However, the internal regulations47
of the Authority only envisage a hearing on an optional basis. Regarding
case law of the Appeal Court (cassation), COB against Oury, which reinforces
the procedure guarantees, the modified internal regulations specify in
article 14 that the hearing must be public, unless there is a request
otherwise jointly by all the parties. If this request is not made jointly,
the board of the Authority will deliberate on this matter. This text is
in compliance with the pragmatic case law of the European Human Rights
Court regarding hearings being public48.
In such manner, neither the text nor the intention of article 6-1 prevent
the party in question from willingly waiving publicity in an unquestionable
manner. The case law of the Council of State49
and the Appeal Court (cassation) agree on this question in the same manner
as that decreed by the European Court.
The Appeal Court also strictly
supervises that the decisions adopted by the Authority have sufficient
factual legal grounds by application of article L. 36-8 of the Post and
Telecommunications Code50. This provision
must also be fulfilled regarding trade secrets protected by law.
B/ Protecting trade secrets :
No legislative or regulatory provision of the Post
and Telecommunications Code specifies the conditions for the Authority
to supervise protection of trade secrecy during procedures to settle disputes.
The principle to protect trade secrecy is only raised in article L. 36-8,
which sets forth that the Authority must publish its decisions, except
secrets protected by law.
By applying this principle,
based on the text of the provisions set forth regarding this matter by
the president of the Competition Council51,
the internal regulations plan of 1997 states that "as an exception,
the president of the ART may refuse publish certain documents that could
submit trade secrecy, except in the case that the notification or the
consultation of these documents is required for the proceedings or to
exercise the rights of the parties. The documents deemed to be secret
must be withdrawn from the dossier". However, apparently, only a
legal text and not mere internal regulations could arise from such provisions.
Modification of article L. 36-8 of the CPT could hence be seen to grant
the Authority the same investigating powers within the scope of the proceedings
to settle disputes as those it holds to research and examine criminal
infringements, by virtue of article L. 40 of the CPT. However, after due
reflection, these modifications were not, in fact, carried out, as they
would have led to great modifications in the structure of the provisions
in article L. 36-8 of the CPT. In fact, on the one hand, the aim of the
actions by the Competition Council is to sanction anti-trust conduct,
and not to settle disputes. On the other hand, the party that has brought
a claim before the ART pursues its own aim, which it has limited, and
is not willing to bring an action that could escape its control by the
exercise of wide investigation powers. It is also protection of trade
secrecy that leads to third parties concerned being excluded from the
dispute settlement.
Under these conditions, the ART merely specifies
in article 16 of its internal regulations, that the decisions must be
publicly announced or mentioned in an Official Gazette published
in France, except trade secrets protected by law. Subsequently, in the
notification letter of the decisions sent to the parties, the head of
the legal department or his/her assistant requests them to verify, within
a term of a few days, whether certain parts of the decision could be a
threat to trade secrecy. The decisions are published on the ART Internet
site, bearing in mind any observations made by the parties. The publication
in the Official Gazette mentions, if need be, that certain parts
have been removed as they are trade secrets protected by law.
C/ Suspension of enforcement brought before the
Appeal Court :
By virtue of article L. 36-8. III of the Post and
Telecommunications Code, the decisions may be subject to appeal by nullity
or redress within a term of one month counted from the date they are notified.
The appeal is not suspensive. However, suspension of enforcement of the
decision may be ordered, if this could lead to clearly excessive consequences
or, after its notification, new extremely serious facts arise. The precautionary
measures adopted by the Telecommunications Regulatory Authority may, within
a maximum of ten days after the notification thereof, be subject to an
appeal of nullity or redress. This appeal is ruled upon within a term
of one month.
Article L. 36-8. IV grants competence to the Appeal
Court of Paris to rule upon, not only the appeals for nullity or redress
brought against decisions, but also the precautionary measures adopted
by the Authority. In the ruling of Copper on 15th December
1998, the Appeal Court of Paris points out, in one of its basic grounds,
that these specific provisions exclude application of the civil procedure
regulations related to appeals.
Within the scope of its appeal against the decision
by the Authority number 98-506 dated 24th June 1998, Copper
Communications also brought a petition, on the one hand, before the first
president to suspend enforcement, on the other hand, before the Councillor
responsible for hearing the request for precautionary measures so that
France Télécom could retain access to its network.
By virtue of the ruling dated 8th September
1998, the first president dismissed the claim for suspension of enforcement
due to the fact that "the decision by the Authority does not imply,
as such, an enforcement, the decision adopted by the Authority to dismiss
a request for precautionary measures, in particular, because the dispute
related thereto is not under its competence, may not be suspended; the
petition by the company Copper Communications has, in this respect, no
object; moreover, a claim for suspension of enforcement was brought before
the first president of the Appeal Court of Paris, which does not hold
the authority to order precautionary measures nor guarantees in an accessory
or subsidiary manner to this claim."
By virtue of the ruling dated 19th October
1998, the first president stated that the provisions related to the counsellor
responsible for hearing the case are not applicable to appeals brought
against decisions adopted to settle disputes rendered by the Authority
and as a result thereof the claims for precautionary measures submitted
by Copper Communications before the counsellor responsible for hearing
the case were declared as being inadmissible. The first president states
in addition that "articles R. 11-3 et seq. of the Post and Telecommunications
Code, the only ones applicable in this case, do not grant the first president
of the Court or his/her delegate the authority to order precautionary
measures."
More recently, France Télécom brought
a claim before the first president of the Appeal Court of Paris, by applying
the provisions set forth in article R. 11-6 of the Post and Telecommunications
Code, to suspend enforcement of the ruling number 01-474 dated 18th
May 2001 ordering France Télécom to fulfil the request for
interconnection by 9 Télécom Network, including rendering
shared income billing services. In the ruling dated 17th August
2001, the judge responsible for the case pointed out that "only
the impact of the measures approved by the Authority on the operation
and the financial situation of the company concerned may be taken into
consideration to decide upon the adequate grounds for the petition to
suspend enforcement, excluding the measures stemming from the nullity
or the grounds of the decision, which are not within the competence of
the First President: thus, the measures of the party petitioning suspension
are inoperable, regarding the consultation conditions in which the decision
by the Authority was adopted and regarding the application of principles
of equity, non-discrimination and the aim of price setting of costs"
and may simply be discarded. As France Télécom did not allege
new facts of particular seriousness that had arisen after the decision,
this petition for suspension of enforcement was dismissed. The short terms
should be pointed out, the petition for suspension of enforcement was
recorded on 6th August 2001 and the hearing was held on 10th
August.
Under these conditions, the time taken for the Appeal
Court to pass its decisions have reinforced the guarantees of fair trial
as stated in article 6-1 of the ECHR. These reasonable terms for ruling
on the appeals, as the ART itself is allowed six months longer to adopt
its decisions on settling disputes, reinforce the very effectiveness of
these arbitration procedures and contribute to ensuring their efficacy
for the operators involved.
In summary, the law granting the power to the ART
to settle disputes, after almost five years have elapsed, can be considered
a satisfactory innovation. It has already allowed the Authority to settle
disputes that, apart from their technical complexity, imply very often
high economic consequences being at stake for the parties involved and
for the successful opening of competition. This, in particular, means
an adapted tool to provide a specific, and if need be, evolving solution
according to the constant changes in technology and the market, and the
rights and obligations related to the concept of interconnection, which
is the focal point for successful operation of the telecommunications
networks and fair and long lasting competition.
Elisabeth
Rolin
Head of the Legal Department
of the ART52
1) J. Chevallier,
La nouvelle réforme des télécommunications (The New
Telecommunications Reform): ruptures and continuité (breakdowns
and continuity), RFDA, 12 (5) Sept-Oct. 1996, page 909 et seq.
2) F. Fillon, AN, 7th May 1996,
JO Déb., page 2877; report Larcher, page 55
3) M. Gentot, Les autorités
administratives indépendantes (The independent administrative authority),
Montchrestien, Collection Clefs-Politique (Political Keys), 1991; Les
autorités administratives indépendantes (The independent
administrative authority), EDCE 2001, page 253 et seq.
4) L. Boy, Les pouvoirs de the
Authority de régulation des télécommunications (The
powers of the Telecommunications Regulatory Authority), November 2000.
5) Ruling number 96-378 DC of
23rd July 1996 regarding the telecommunications regulatory law published
in the Official Gazette dated 27th July 1996 page 11400 and seq.
6) L. Favoreu and L. Philip, Les
grandes décisions du Conseil Constitutionnel, 10ème édit,
Dalloz, 1999, number 42-27 (The important decisions adopted by the Constitutional
Council)
7) Ruling number 88-248 DC, Rec.
18, RJC I-339
8) Ruling number 89-260 DC, Rec.
71, RJC I-365
9) Article 33 of decree number
90-1213 dated 29th December 1990 related to the conditions of France Télécom
and the post and telecommunications code published in the Official Gazette
dated 30th December 1990, page 16568 and on arbitration rendered by the
post and telecommunications minister see the thesis by Isabelle Ciupa
dated October 1996 on telecommunications interconnection: the concept
of the ONP as a tool for competition regulations, Presses universitaires
du septentrion, 1998.
10) EC 2/1 France Télécom
on 16th June 2000, number 202835, concl. B. Martin Laprade
11) Report by C. Galliard n°
2750 National Assembly, page 178 et seq.
12) EC Directive number 97/33
of 30th June 1997 regarding interconnection in the telecommunications
sector in order to ensure universal services and interoperability by application
of the principles of open network provision (ONP)
13) Ruling number 86-224 DC,
Rec. 8, RJC I-303, G.D 41
14) "La loi" number
2000-108 dated 10th February 2000 regarding modernisation and development
of the public electricity services has provided a procedure for settling
disputes before the Electricity Regulation Commission (CRE); "la
loi" number 2000-719 dated 1st August 2000 regarding amendment of
the law number 86-1067 dated 30th September 1986 before the Higher Audio-Visual
Council (CSA).
15) This is a cable plan network
set up or operated by applying the provisions set forth in law number
82-652 dated 29th July 1982 regarding audio-visual communication and concessive
networks set up or operated by applying the provisions set forth in Act
number 86-1067 dated 30th September 1986 regarding freedom of communication.
16) Published in the Official
Gazette dated 28th July 2001 page 12132 et seq. (articles 14 and 17)
17) Published in the Official
Gazette dated 28th July 2001 page 12129 et seq.
18) Directive 98/10/EC dated
26th February 1998 concerning application of open network provision (ONP)
for voice telephone and setting up universal telecommunications services
in a competitive environment
19) The Appeal Court confirmed
the decisions adopted by the Authority on 10th July 1997 when settling
disputes between France Télécom and respectively Paris TV
Câble and la Compagnie Générale de Vidéocommunication
for additional leased space on various cable networks in order to provide
Internet access services. The term Internet is understood in the business
report of the ART for 1997 as all the links established between different
nodes (in other words any routing platform, any computer, telecomputer
equipment connected to the network) of interconnected telecommunications
networks according to the protocol TCP/IP and all the services accessible
by means of these networks.
20) Ruling number 98-506 dated
24th June 1998 adopting a decision on a dispute between Copper Communications
and France Télécom.
21) Ruling number 98-703 of
4th September 1998 adopting a decision on a dispute between TO COM and
France Télécom
22) Ruling number 98-704 of
4th September 1998 adopting a decision on a dispute between Audiopresse
and France Télécom
23) Ruling number 98-705 of
4th September 1998 adopting a decision on a dispute between Even Média
and France Télécom
24) Ruling number 99-716 of
9th September 1999 adopting a decision on a dispute between Spacetel and
France Télécom
25) Ruling number 00-703 of
7th July 2000 adopting a decision on a settlement of a dispute between
ICS France and France Télécom related to performance of
a wholesale agreement for international traffic.
26) Ruling number 01-951 of
5th October 2001 adopting a decision on the dispute between Magic Online
and France Télécom and Transpac related to the technical
and pricing conditions of offers of national collection of IP traffic
to provide ADSL services.
27) As examples: ruling number
00-723 on 12th July 2000 adopting a decision on the dispute between Siris
and France Télécom related to interconnection by routing
of Internet traffic to destination numbers with the format 0860PQMCDU
paid by the caller; ruling number 00-1194 adopting a decision on the dispute
between Sonera France and France Télécom related to access
to the France Télécom network to provide telephonic information
services
28) Ruling number 01-1112 dated
16th November 2001 adopting a decision on a dispute between Liberty Surf
and France Télécom regarding conditions for choosing clients'
modems within the scope of the IP/ADSL access agreement
29) Ruling number 99-197 dated
1st March 1999 adopting a decision on a dispute between the Société
Française du radiotéléphone and France Télécom
regarding interconnection conditions for incoming calls on the Société
Française du radiotéléphone network.
30) Ruling number 00-603 dated
30th June 2000 adopting a decision on a dispute between Linx and France
Telecom related to interconnection by routing Internet traffic to the
destination numbers with the format 0860PQMCDU paid by the caller
31) Ruling number 00-515 dated
30th May 2000 adopting a decision on a request for precautionary measures
by Siris
32) The decision to settle disputes
are available on the ART Internet site: www.art-telecom.fr
as well as in press releases of the most important decisions.
33) Decisions rendered by the
Authority on 10th July 1997 settling disputes between France Télécom
and respectively Paris TV Câble and la Compagnie Générale
de Vidéocommunication
34) In this manner, the Appeal
Court confirmed the decision by the Authority on 5th January 2000, adopting
a decision on a dispute between Télécom Developpement and
France Télécom related to interconnection security of subscriber
switching of the France Télécom network
35) The text of article 34-8
resulting from the law number 96-659 dated 26th July 1996: "Operators
of networks open to the public are entitled, under objective transparent
and non-discriminatory conditions, to request interconnection from
the holders of an authorisation issued by application of articles 33-1
and. 34-1. The request for interconnection may not be refused if it is
reasonable regarding, on the one hand, the needs of the applicant,
and on the other hand, the capacity of the operator to provide such interconnection".
36) Please see ruling number
00-723 dated 12th July 2000, adopting a decision on a dispute between
Siris and France Télécom related to interconnection routing
of Internet traffic to the destination numbers with the format 0860PQMCDU
paid by the caller.
37) Ruling number 01-1112 dated
16th November 2001, a decision was adopted on the dispute between Liberty
Surf and France Télécom regarding the choice of clients'
modems within the scope of the IP/ADSL access agreement.
38) This grievance was dismissed
as being without sufficient grounds by the Appeal Court of Paris in the
ruling dated 27th June 2000 FT against TD
39) The result from the decree
number 97-264 dated 19th March 1997 introducing articles R.11-1 to R.11-9
in the post and télécommunications code
40) This annuls and replaces
the previous internal regulations (ruling number 97-57 dated 26th March
1997)
41) Even though this concerns
the previous internal regulations, this case law is also applicable to
current regulations.
42) Ruling number 97-88 by the
Authority dated 9th April 1997, approving the technical and interconnection
pricing offered by France Télécom.
43) Cass. Plenary, 5th February
1999, COB against Oury: Gaz Pal, 24-25 February 1999, concl. M. -A. Lafortune;
JCP G 1999, II, 10060, note H. Matsopoulou. By the Competition Council,
Cass. com., 5th October 1999, Campenon Bernard SGE : JCP G 2000, II, 10255,
note E. Cadou ; Cahier Droit des affaires (Business Law Records)1999,
number 40, legal procedures, page 44. V. J. -F. Brisson, "Les pouvoirs
de sanction des autorités de régulation" (The sanctioning
powers of the regulatory authority) and article 6-1ECHR: AJDA 1999, page
847
44) The meetings held by the
Authority, debate on 23rd March 1999: "telecommunications law:
assessment and forecasts".
45) EC, Section, 20th October
2000, the Company Habib Bank Limited
46) EC, Section, 3rd December
1999, Didier, F. Sudre, La participation du rapporteur au délibéré
de la formation disciplinaire du Conseil des marchés financiers
n'est pas contraire à la CEDH (Involvement of the investigator
in deliberation of the disciplinary formation by the Council of the financial
markets is not against the ECHR) JCP, "la Semaine Juridique"
EG, number 10 267, 8th March 2000, page 422 et seq.
47) Decision number 97-57 dated
26th March 1997; article 12: "If it is considered that the matter
requires so, the president may summon the parties to a hearing"
48) ECHR, 28th June 1978, König
against Germany; ECHR, 10th February 1983; Le Compte against Belgium;
ECHR 26th September 1995, Diennet against France regarding disciplinary
sanctions.
49) EC, Ass. 14th February 1996,
M. Maubleu, concl. M. Sanson, RFDA Nov-Dec. 1996, page 1186 et seq.
50) As an example, the ruling
by the Appeal Court of Paris, division one on 27th June 2000, a decision
was adopted on settlement of the dispute between the company Telecom Developpement
and France Télécom
51) Article 23 of the ruling
dated 1st December 1986 regarding pricing and competition freedom.
52) This article has been drawn
up with the collaboration of the members of the legal department: Aurélie
Doutriaux, Christine Galliard, Jérôme Poulain, Loïc
Taillanter, and Eric Vève.
