Driven chiefly by DSL offers, the broadband market in France is enjoying healthy growth, thanks to a large extent to regulation centred on facilities-based competition that seeks to promote local loop unbundling. The widespread availability of unbundling helps increase both competition and innovation, providing operators with direct access to the copper pair. Sector-specific regulation has helped operators move up the ladder of investment by maintaining economic leeway between wholesale offers for accessing the local copper loop and the regional counterpart, bitstream.
Because of consumers’ growing demand for content and higher speed access, the market is moving inexorably to ultra-fast broadband solutions, with the deployment of a new fibre optic local loop. Ultra-fast broadband already makes it possible to achieve symmetrical (i.e. upstream and downstream) bitrates of between 50 and 100 Mbps. It will help stimulate the development of enhanced services, particularly in the area of audiovisual media, including the simultaneous reception of several high definition channels.
The country’s leading carriers have announced ultra-fast broadband deployment plans, and the first rollouts have already begun in Paris and several other major cities. DSL market players have opted to deploy new fibre optic local loops to the home (FTTH: Fibre to the Home). These new fibre networks open up new opportunities for LLU operators wanting to invest in their own local loop, and so migrate from a strategy based on leasing to one based on investment. Cable operators are also working to upgrade their coaxial networks by pulling fibre to the premises. This new investment cycle will make a substantial contribution to the development of the national economy.
The investments required of an operator rolling out an FTTH network correspond essentially to the cost of building a new local loop that extends to the subscriber premises. Civil engineering is by far the largest cost item when constructing a new local loop in an urban zone. If an operator were forced to undertake its own civil engineering, and so open trenches across the city, deployment costs would run in the tens of billions of euros across France. Pioneer rollouts are thus taking place in cities where existing infrastructure can be reused: the incumbent carrier is deploying fibre optic in the local loop ducts inherited from the former monopoly, while alternative operators are installing fibre in the underground sewer networks (Paris) and in city-owned ducts (Montpellier).
France Telecom’s civil engineering infrastructure is the main nationwide infrastructure, and in many cases the only one available at the local level for deploying a new fibre optic local loop. All operators need to be able to access this essential infrastructure to invest in ultra-fast broadband. As a result, ARCEP is involved in regulating France Telecom’s civil engineering infrastructure as part of its analysis of Market 4, under the new European Commission recommendation on relevant markets. Late last year, France Telecom also provided alternative operators with an offer for accessing its civil engineering infrastructure, and alternative operators are currently conducting trials aimed at checking the processes and engineering rules that make up the offer.
The deployment of a new local loop that runs to subscribers’ homes also means equipping private properties. Given the nuisance this would cause in the common areas of buildings, it is unlikely that a second operator will be given permission to install fibre in a building that has already been equipped – in addition to it being an economically unsound solution. The building’s residents must, however, be able to benefit from competition.
As a result, to prevent the creation of local monopolies in each building, operators need to share the terminating sections of their fibre optic network, in other words, the first operator to install fibre in a building will give other operators access to it under conditions that enable effective competition, allowing them to market a competing offer to the residents.
Accessing buildings is currently the chief obstacle to FTTH rollouts, and one that concerns all operators. The existing regulatory framework does not allow ARCEP to enforce sharing of the terminating sections of fibre optic networks. Legislative provisions thus need to be adopted to facilitate fibre installation in buildings, to provide their owners with the necessary guarantees.
As a result, the Ministry of the Economy, Finance and Industry proposed legislative measures that outline the principle of sharing the terminal section of fibre optic networks, and endow ARCEP with regulatory powers in that area, notably for setting the technical and pricing terms for a system of infrastructure sharing.
Finally, as has been the case with broadband, local authorities can play a decisive role in furthering regional development by enabling operator rollouts through measures that encourage them to share their resources. They can also provide local information on underground infrastructure, help coordinate civil engineering works, install ducts for future use, authorise less costly civil engineering infrastructure, wiring on building façades, and encourage the pre-installation of fibre in new builds and in buildings undergoing major renovations.
