registration document France Telecom 2009 - Orange.com

6 OVERVIEW
overview of the group’s business
OF BUSINESS
France
The anti-digital divide law, the so-called “Pintat law”, provides
for the implementation of regional digital roll-out blueprints
and the establishment of a regional digital roll-out fund, with
contributions both at a national level with a part of the large
national loan but also by means of European funding, along with
a portion of the proceeds from the sale of digital frequencies.
In parallel, the authorities have indicated their willingness
to implement a national program for the roll-out of very high
broadband services, designed to facilitate the roll-out of these
types of networks across the country. A labeling system for
private operators’ projects in densely populated areas and
public-initiative projects in other areas is to be implemented.
The operators with this label could gain access to non-grant
loans, borrowing guarantees and equity contributions. In areas
where private operators have not planned roll-out, public
initiative projects would be initiated by local authorities (in line
with their regional digital coverage planning) and could receive
fi nancial support from the French Government as well as local
grants. In early 2010, a consultation was undertaken by public
authorities to set out the terms of this program.
Moreover, in February 2010, following the public consultation
on increased bandwidths, ARCEP published guidelines stating
that, by mid-2010, it would set out the terms for the rollout
of operations to increase bandwidths. By then, ARCEP
recommends the suspension of all bandwidth increases in
areas that can be unbundled.
Regulation of Audiovisual and Contents
Key Events
February 2009 - Exclusive links between the ISP and
December 2010 content delivery businesses:
■ February 23: ruling handed down by
the Paris Commercial Court ordering
France Telecom not to require Orange
Foot subscribers to have an Orange
broadband Internet subscription
■ May 14: ruling handed down by the Paris
Appeal Court authorizing the marketing
of Orange Foot to be restarted
■ July 7: publication of the opinion
of the French Competition Authority
■ January 2010: recommendations
of the Hagelsteen working group
March 5 Public audiovisual reform
law (law no. 2009-258): see the “ legislative
framework” section.
September 30 Personal mobile television (PMT): signing
by the Orange Sport Info channel and
the other PMT channels of the agreement
with the CSA
Exclusive links between the ISP and content and services delivery
businesses
Following the claim fi led by Free on June 25, 2008, to which
Neuf Cegetel joined itself, the Paris Commercial Court, in
a ruling on February 23, 2009, ordered France Telecom to
stop requiring that Orange Foot subscribers have an Orange
broadband Internet subscription.
An appeal fi led by France Telecom with the Paris Appeal Court
saw the successful overturning of the Commercial Court ruling
in a judgment handed down on May 14, 2009. Marketing of
Orange sport started up again on the evening of May 15. SFR
and Free have appealed the decisions to the French Supreme
Court.
The CSA (April 2009) and the French Competition Authority
(July 2009) gave the government their view on this issue. The
French Competition Authority, recognizing the stimulating
effect of Orange offers on the pay-TV market, recommended
government action to regulate the pay channel wholesale
market, currently dominated by the Canal+ group, and to order
the provision on this market of exclusive channels. The Authority
recommended limiting operator and access exclusivity in terms
of duration (one to two years) and scope (technical or commercial
innovations), and to hand over the delivery of exclusive content
to third-party ISPs with full control of the customer relationship
(“self-delivery”).
Finally, in October 2009 the French Prime Minister asked
Marie-Dominique Hagelsteen, Section President at the French
Administrative Supreme Court, to look into exclusive relations
between electronic communications operator businesses and
content and service delivery businesses. The conclusions
and recommendations of the Hagelsteen working group were
published in January 2010 .
The working group proposes a mechanism of ex post control
of the effects, on the broadband and very high broadband
retail markets, of operator exclusivity enjoyed by certain access
operators. Such exclusivity should not therefore be considered
presumably anticompetitive. The working group does therefore
not support the proposal of the French Competition Authority,
which is in favor of a framework signifi cantly restricting
exclusivity on the grounds that it is detrimental. In the pay-TV
wholesale market, the working group suggests giving the CSA
new powers so that it can regulate this market and impose
“must offer” type remedies on powerful players.
In February 2010, the government indicated that it
favored strengthening regulation in the audiovisual and
telecommunications sector. It announced that it would begin
work with the regulatory authorities (French Competition
Authority, the CSA, the Arcep) with a view to implementing
any measures that may be required to maintain or re-establish
adequate competition. The government lastly indicated that it
did not feel there was currently any need for a legislative change
in the pay-TV regulatory set-up.
Personal mobile television (PMT)
Following the signing by channels applying for PMT of the
agreement with the CSA in September 2009, the Authority is
to issue the broadcasting permits. This step will trigger the two
month period given to the selected channels to establish a joint
venture to manage their multiplex.
Mobile operators have still not publicly announced whether
they will take part in the multiplex operator initiative. There have
been serious delays to the initial schedule as a result of the large
number of parties involved in the development of the business
model.
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2009 REGISTRATION DOCUMENT / FRANCE TELECOM