REGISTRATION DOCUMENT AND FINANCIAL REPORT - Iliad

6. OVERVIEW OF THE GROUP’S BUSINESS
6.6 REGULATORY SITUATION
and without distorting competition. The Universal Service Directive also determines obligations in terms of
the supply of a certain number of mandatory services, such as the retail provision of leased lines or carrier
selection (either by carrier pre-selection or selection on a call-by-call basis).
• Directive 2002/20/EC of March 7, 2002, on the authorization of electronic communications networks and
services (“Authorization Directive”). This Directive harmonizes and simplifies the rules and conditions for
authorization to supply electronic communications networks and services. It does away with the individual
license regime in favor of a general authorization regime (i.e. based on a notification procedure). According
to this Directive, only the allocation of scarce resources (i.e. radio frequencies and numbers) should be
subject to individual licenses.
• Directive 2002/77/EC of September 16, 2002, on competition in the markets for electronic communications
networks and services. This Directive replaces Directive 90/388/EC, as last amended, and its aim is to
extend the scope of the liberalization process to cover all electronic communications. The Directive takes
into account the convergence phenomenon and groups under one single definition all the services and
networks used for the conveyance of signals, thereby reaffirming the principle of the freedom to offer
communications services and networks.
• Regulation 2887/2000/EC of December 18, 2000, on unbundled access to the local loop. This Regulation,
which is directly applicable in all Member States, provides that all operators with significant market power
must offer unbundled access to their local loop and associated facilities, under transparent, fair and
non-discriminatory conditions.
The European Commission compiles an annual report detailing the extent to which the regulatory package has
been implemented in Member States. This report can be consulted on the European Commission’s website.
At the end of 2007 the Commission published its proposed modifications to existing regulations governing
electronic communications. The reform should be adopted in 2009.
French regulatory framework applicable to electronic communications
Responsibility for the control and effective implementation of the European regulatory framework lies with the
national regulatory authorities (NRA).
In France, the NRA is the Autorité de régulation des communications électroniques et des postes, or ARCEP,
which was created in January 1997. ARCEP ensures that operators comply with the laws and regulations set out
in the French Post and Electronic Communications Code (CPCE) and, where applicable, that they respect the
conditions of any individual authorizations granted. Operators that do not require individual authorizations
register with ARCEP which then issues a receipt allowing them to exercise their rights and informing them of
their obligations. The sanctions available to ARCEP if an operator fails to comply with the regulatory framework
include limiting the scope or reducing the term of the operator’s authorization, as well as suspension or even full
withdrawal. It can also impose fines representing up to three percent (3%) of the operator’s annual revenue, or
5% in the event of a repeated breach. In accordance with Article L.36-11 of the Post and Electronic
Communications Code, where ARCEP identifies a serious and immediate infringement of the rules governing the
telecommunications sector it can order precautionary measures without any requirement for prior notice. In
addition, where an infringement could cause serious harm to an operator or the market, ARCEP’s Chairman can
make an emergency application to the French Conseil d’Etat for an order requiring the party concerned to
comply with the applicable rules. Any such order may be accompanied by a penalty levied until the party
complies therewith. In France, the transposition of the 2002 Telecoms Package essentially took place in the form
of Law 2004-669 of July 9, 2004, together with its implementing decrees.
Market analysis
The analysis of the markets is the cornerstone of the new regulatory framework, because it is the basis for
adapting the new regulations specifically to suit each individual market. It is an ongoing process, subject to
periodic review, with the aim of eventually bringing the regulations into line with competition law. The other
objective is to limit ex ante regulation to markets where the level of competition is low (which is currently the
case in the majority of the wholesale markets), and to apply ex post regulation to markets where the level of
competition is high (currently the case in most retail markets).
46 - Iliad – Registration Document 2007