France

Author: | Published: 2 Feb 2000
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This article is a contribution of the IT & Telecoms Group of Stibbe Simont Monahan Duhot & Giroux, Paris

In France, the question of internet access has been the subject of recent regulatory developments relating mainly to lower rates and of two decisions rendered by the French Competition Council. Moreover, the French Personal Data Authority recently issued a report concerning spams.

Internet Access REGULATION

At the end of January 1999 the French Telecommunications Regulatory Authority (the ART) joined forces with market participants concerned by the provision of internet access, as well as with several users' associations, representatives from the concerned ministries and representatives from the Competition Council. It was thus answering the request made by the French Minister of Economy, in mid-December 1998, to conduct a study to find new ways to lower internet access rates.

The ART noted a consensus in particular on three points:

  • the necessity to lower internet access rates in the short term, bearing in mind that such step does not preclude the search for mid-term structural solutions, eg ways of developing competition on the local loop;
  • the necessity for France Telecom to propose rates for local communications satisfying the needs of the largest number possible of internet subscribers; and
  • the necessity to have interconnection rates compatible with local communications retail rates, ie the level of such rates and the hours during which specific rates are applied must be in keeping with local communications rates.

In May 1999 the ART launched a request for comments concerning switched access to internet in France. Three major decisions or opinions were also adopted by the ART in the course of 1999. They pertain to

  • a proposal made by France Telecom regarding local communications rates applicable to internet subscribers (Forfait Internet);
  • an arbitration between Cegetel Entreprises and France Telecom concerning interconnection conditions; and
  • the attribution of non-geographic numbers to internet access services.
Request for comments pertaining to internet access via the telephone network

In a request for comments pertaining to internet access via the telephone network dated May 31 1999 the ART explained the mechanism of access to internet in France before setting out ways of ensuring a diversity of offers for the internet user.

The ART has defined internet access as requiring a telecommunications local loop to which the subscriber is connected, a national data network to carry the data traffic from the interface of the local loop to the Internet Service Provider's (ISP) points of presence or, as the case may be, to the entrance point of the data network, depending on the technical architecture chosen by the ISP, and an ISP providing and controlling access to internet itself.

The ART set forth that, usually, subscribers pay on the one hand the ISP for internet access and data transport and, on the other hand, the local loop operator for the use of the telephone network to the ISP's point of presence or to the entrance point of the data carrier's network.

The ART pointed out that offers for free internet, which, it stated, should more accurately be called internet without subscription, started appearing in 1999. With internet without subscription, the internet user only pays the local loop operator. ISPs are hoping to finance this new offer by receiving a share of the profit made by the local loop operator with the traffic generated by the internet as well as with revenues generated by advertisements and electronic commerce. In this respect, the ART underlined that, within this framework, the rate paid to France Telecom for local communications was likely to become more important than the simple rate of a local communication. The ART then studied ways of ensuring the existence of a variety of offers for the internet user, distinguishing between two different internet offers — internet with a subscription and internet without subscription. (In this respect, it should be noted that ISPs began marketing a new internet access offer in autumn 1999. It is a flat internet access rate including the price of internet access and the price of communications.) The ART further proceeded to describe the two existing interconnection mechanisms, ie direct and indirect interconnection, in view of determining the best solution for each offer given the characteristics of the internet-without-subscription offer. Indeed, in this case, only France Telecom which has a quasi-monopoly over the local loop and thus has a commercial link with all the users, is in a position to invoice internet-without-subscription offers.

In the direct interconnection mechanism, the local loop operator, ie France Telecom, carries communications to the entrance point of third party operator's network which provides, in turn, France Telecom with a termination call service. France Telecom determines the offers to be made to the users, and in particular the rates of such offers, and pays the third party operator its termination call service. In the indirect interconnection mechanism, France Telecom provides a third party operator with an interconnection service and the latter determines the offer to be made to the end users, and especially the rate.

As for internet with a subscription, the ART considered that direct interconnection does not enable the third party operator to make a complete and independent offer to the end user but that, on the contrary, indirect interconnection mechanism enables all operators connected with France Telecom's network to make diversified offers to the ISPs and to the internet subscribers. It therefore deemed it necessary for France Telecom to make an indirect interconnection offer with respect to the use of non-geographic numbers. France Telecom has been making such an offer since the summer of 1999 (see paragraph on Forfait Internet).

As for internet without subscription, the ART wished to collect comments from the concerned participants.

Forfait Internet

As requested by the ART, France Telecom submitted, in February 1999, a proposal for a new communications rate intended for internet subscribers. This proposal provided that subscribers were to pay Ffr100 ($16) per month for 20 hours of communications passed on analogue lines, at certain hours, towards one, two or three ISPs.

The ART examined France Telecom's proposal and, to this end, consulted the concerned participants. The proposal was accepted in May 1999, subject to two essential conditions:

  • all ISPs were to benefit from the proposal, without any restriction or discrimination; and
  • France Telecom was to make an indirect interconnection offer for internet access. (Opinion n°99-289 dated May 31 1999 pertaining to France Telecom's pricing decision n° 99042 E concerning the new rate Forfait Internet.)

In this respect, the ART ruled that, in 1999, this indirect interconnection offer would result in the extension of the offer for indirect interconnection applicable to telephony services contained in France Telecom's 1999 interconnection catalogue. France Telecom has been applying such conditions since the summer of 1999.

Arbitration between Cegetel Entreprises and France Telecom

In June 1999 the ART arbitrated a conflict pertaining to the remuneration of the interconnection provided by Cegetel Entreprises to France Telecom, and among other things to internet access communications through geographic numbers (Decision N° 99-539 dated June 18 1999 concerning a conflict between Cegetel Entreprises and France Telecom pertaining to the interconnection conditions for the calls entering on Cegetel Entreprises' network).

In this respect, the ART held that interconnection for the traffic generated by the internet through geographic numbers must be treated differently from interconnection for the traffic generated by telecommunications services other than internet (classic telecommunications services), given the difference in the service provided by the operator of arriving traffic, ie:

  • traffic generated by the internet comprises only in-going traffic whereas classic telecommunications services generate in-going and out-going traffic;
  • the ISP's website concentrates important volumes of traffic, which entails better use of the network;
  • contrarily to the classic situation where the operator must unfold an access network to connect each client's website, it is unnecessary to unfold such a network to connect with an ISP as the latter can be housed in the operator's premises or nearby; and
  • transport between the point where France Telecom delivers traffic to the operator and the ISP's point of presence can use IP technology.

The ART thus concluded that Cegetel Entreprises was to present a twofold offer regarding, on the one hand, traffic generated by the internet and, on the other hand, the rest of the traffic.

The ART further determined that, until December 31 2000, the interconnection rate pertaining to traffic generated by internet towards Cegetel Entreprises' geographic numbers in the transit zone of the interconnection point under consideration is to be in the amount of 3.8 centimes per minute, without any flat part or variation depending on the time the call is made.

Attribution of non-geographic numbers to internet access services

ISPs can be accessed either through geographic numbers or non-geographic numbers.

In 1999 (Decision n° 99-281 dated September 30 1999 attributing the series of non-geographic numbers 08 68 PQ MC DU to switched access to internet.) the ART attributed a new series of non-geographic numbers to internet access services (0868 numbers), just as it had already done in 1997. (Decision n° 97-365 dated October 23 1997 attributing the block of non-geographic numbers 08 60 PQ MC DU to certain internet access services. In this decision, the ART attributed a first block of non-geographic numbers (0860 numbers) to certain internet access services, stating that the cost for the caller must be lower or equal to that of a local call. About 20 series of numbers were thus attributed in this block.)

In its 1999 Decision the ART set forth the advantages accruing from the use of non-geographic numbers for operators, ISPs and subscribers.

Non-geographic numbers enable operators to set up optimized network architectures, which transform telephone calls into IP data flows, at the closest point possible to the caller.

The ART further explained that, as there is a single national number, it is easier to implement access to the ISP's service and to develop new commercial offers allowing eg direct invoicing of telephone communications and internet access service.

Subscribers benefit from an increased mobility and from a certain visibility concerning the rate of the service provided. In this respect, the ART has stressed the importance of simplifying, clarifying and making more readable the offers made to subscribers.

COMPETITION LAW

To this date (November 1 1999), the Competition Council has ruled twice in the field of internet access.

It should be recalled that, in May 1998, AFOPT, an association grouping private telecommunications operators, referred an internet access offer made by France Telecom to French schools to the Competition Council. France Telecom was offering French schools the possibility to access the internet for a given number of hours at a given price provided the schools chose either to use France Telecom's and its subsidiaries' local loop, data network and internet access service or to use France Telecom's local loop and its subsidiary's data network combined with the internet access service of any third party ISP. The Competition Council was of the opinion that third party data carriers did not benefit from the same technical and financial interconnection conditions as France Telecom's subsidiaries. As a result, these operators risked being excluded from the market. The risk of such exclusion was deemed dangerous given the fact that the telecommunications market is likely to experience an important and durable growth. Therefore France Telecom was requested to suspend its offer until it offered long-distance operators a specific interconnection rate for internet access for schools.

In June 1999 following a complaint by Club Internet (a subsidiary of the Lagardère Group), the Competition Council ruled on an experiment conducted by France Telecom with the help of its ISP subsidiary, France Telecom Interactive, concerning Asynchronous Digital Subscriber Line (ADSL) — an experiment implying the combination of two services:

  • a service giving the end user access to ADSL technology; and
  • a service giving the ISP access to ADSL technology.

Club Internet held that France Telecom Interactive, as a participant in such an experiment, had acquired valuable experience and thus an advantage over its ISP competitors in the field of ADSL. France Telecom committed itself to provide third party ISPs with the information necessary to enable them to implement their ADSL internet access offer as soon as its technical ADSL offer was operational. The ART requested that France Telecom Interactive suspend the marketing of ADSL internet access service during a 15-week period following the transmission of such information, ie the time period deemed necessary for third party ISPs to implement their ADSL offer.

FRENCH DATA PROTECTION AUTHORITY GUIDELINES ON SPAMS

On October 14 1999 the CNIL — the French Personal Data Protection Authority — issued a report (Le publipostage électronique et la protection des données personnelles, available at "http://www.cnil.fr") analyzing the conditions under which spamming is lawful in respect to data protection. The CNIL conducted the study in view of submitting it to the European Community institutions and committees prior to the adoption of the Directive on electronic commerce which, among other things, intends to regulate spams.

Spamming is a fast-growing advertising practice which consists in the massive, repetitive and unsolicited mailing of commercial e-mails on the internet and which tends to overtake traditional junk mailing practices (post, fax, answering machines or other automated devices) because of the triviality of the cost incurred by the advertiser.

Public concern regarding spams has grown as fast as this new advertising practice, since the targeted internet user not only incurs the telecommunications costs of querying his e-mail address but is also disturbed in his privacy, notably by the sudden display on the screen of a commercial message.

National and private initiatives have already been taken or proposed in view of regulating spams, and two solutions have been presented:

  • li> the opt-in solution, according to which the spamming practice is subject to the internet user's prior consent to receive spams; and
  • the opt-out solution, according to which the internet user merely has a right to oppose to his receiving spams.

Facing this alternative, and up to now, the European institutions seem to have preferred the opt-out solution. Following the Directive on the distance contracts (EC Directive 97/7 of May 20 1997) — which provides that the use of certain communication methods, among which e-mails, is subject to the absence of obvious opposition by the concerned data subject —, but without prejudice to it and in particular to Article 14 according to which the members states may adopt a more stringent disposition to ensure the consumer a higher level of protection, the actual proposal of the Directive on electronic commerce (Com (1999) 427 final of August 17, 1999), provides under Article 7 that unsolicited commercial e-mails must be clearly identified as such and that the data subject must be enabled to register to an opt-out list which shall be regularly revised.

Indeed, in its October 1999 report, the CNIL decided to part from the traditional opt-in/opt-out debate. In order to provide a regulatory framework for spams, the French Authority considered that the appropriate solution was to be found in the existing personal data protection rules, since e-mail addresses — which are necessarily processed by spam advertisers — are personal data to which the existing legal framework applies.

As a result, the CNIL concludes in its report that spamming is lawful provided the advertiser complies with the applicable personal data provisions, and in particular with the relevant provisions and principles, of the Directive adopted in 1995. (95/46/EC, October 24 1995 on the protection of individuals with regard to the processing of personal data and on the free movement of such data).

The CNIL then distinguishes three situations under which e-mail addresses may be legally and legitimately processed for direct marketing purposes:

  • the spam is sent to an e-mail address which has been collected by the advertiser on his Website: since the e-mail address has been directly collected by the advertiser, the CNIL considers that the mailshot will be lawful provided the internet user has been informed, at the time of collection, of his right to object to the processing of the data for direct marketing purposes; in the internet environment, the CNIL generally recommends the display of a ticking-box enabling the internet user to oppose;
  • the spam is sent to an e-mail address which has been communicated to the advertiser by a third party: since the collection of the e-mail address by the advertiser is indirect, the CNIL considers that the mailshot is lawful provided the internet user has been informed, at the time of the collection or prior to the communication, of his right to object to the disclosure of the data to the advertiser who shall process it for direct marketing purposes; such a right can also be exercised by ticking the appropriate box;
  • the spam is sent to an e-mail address which has been collected in a public chat space: since the data has been collected without the internet user's prior knowledge or consent — which implies that the internet user has neither been informed of the collection nor been able to object to the processing for direct marketing purposes — the CNIL considers that such a spamming practice may under no circumstances be lawful and is subject to criminal sanctions; the CNIL recommends firstly, that the display, in the public internet space, of an information specifying that the personal data communicated by internet users may not be processed for direct marketing purposes without their knowledge and secondly, that the use of devices enabling ISP to prevent automatic collection of personal data by search engines. To conclude, the CNIL seems to consider that, pursuant to the 1995 Directive relating to personal data, the opt-out solution applies in the first two situations whereas the opt-in solution necessarily applies in the last one, which is to be regarded as the most critical situation. Thus, the CNIL takes a stand regarding spamming and decides, pursuant to Article 14 of the distance contracts Directive, to adopt a more stringent solution than the opt-out solution that might be finally retained in the electronic commerce Directive. If some member states implement the opt-out principle while others derogate therefrom, as France seems to do, it is foreseeable that the internet user's level of protection against spams shall be uncertain, since it will depend both upon the law where the ISP is established (Article 3 of the proposal of Directive on the electronic commerce) and upon the set of rules that will be considered as of public order.

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