CHAPTER 5

Fair competition: the search for a proper balance

The gradual opening of the telecommunications sector to competition, to be completed by 1998, requires the development of a comprehensive and well-balanced system of regulations.

This regulatory system must ensure that the public service missions so prominent in this sector are carried out well and must at the same time encourage the entry of new players onto the market. It needs to be based on two main points.

The first point concerns access to the services of France Télécom, which holds exclusive rights for some operations (voice telephony and the infrastructure for wired networks). The framework for access has been set out by what are called the Open Network Provision (ONP) European Directives, which have been transposed into French law by the DGPT, the national telecommunications regulatory authority.

The second point concerns the regulation of competition. The telecommunications sector is subject to the ordinary laws on competition, and the DGPT is entrusted by law with the responsibility for safeguarding the conditions of fair competition between France Télécom and its competitors.

1. The DGPT's scope of operations

1.1. Principles

1.1.1. Ordinary law governing competition, particularly the notion of abuse of a dominant position

From the point of view of competition, the telecommunications sector, like other economic sectors, is governed by the Order of 1 December 1986 on the freedom of prices and competition. Title III, entitled "Anti-competition practices", and its Articles 7 and 8, which prohibit agreements restricting trade and any abuse of a dominant position, are especially applicable to this sector.

Based on this, the Council on Competition (Conseil de la Concurrence) and the ordinary judicial courts have full and complete jurisdiction.

In addition, the telecommunications sector is also subject to Community law and particularly to Articles 85 and 86 of the Treaty of Rome, which apply to agreements restricting trade and to any abuse of a dominant position. The conditions under which these Articles apply are given in Regulation 17/62 of the Council, dated 6 February 1962. Complaints can therefore be brought before the Commission of the European Communitites (DG IV). Appeals are heard by the Court of Justice of the European Union.

1.1.2. The principles regulating the telecommunications sector, in particular ONP principles

In addition to the general principles of the laws on competition, there are specific provisions applying to the telecommunications sector. These provisions are from the ONP framework directive, which requires the "historic" telecommunications operator to open its network to competition, making it available to all service providers under conditions that are "transparent, objective and non-discriminatory".

It is in fact the case today that everywhere in Europe, this operator, whether public or private, and whether or not it holds a monopoly on public infrastructure, is the only one that currently holds a vast, densely inter-linked, network. Thus, in most cases, companies offering telecommunications services must use the network of the dominant operator, which itself provides these services: so the customers of these operators are also its competitors.

The ONP framework directive was drawn up to set out the conditions governing the provision of leased lines (ONP-leased lines directive), packet data transmission (Recommendation) and ISDN services (ISDN Recommendation).

These provisions, which have been transposed into national law, particularly by the Law on the Regulation of Telecommunications (LRT) dated 29 December 1990 and by various application Orders, are thus intended to ensure that competitors to France Télécom have access to its network under conditions of fair competition, both from the technical and tariffs point of view, relative to the same conditions that France Télécom provides for itself or its subsidiaries. Article L 32.1.4. of the Code on Posts and Telecommunications provides that access to the public network must be, in the words of the ONP, "ensured under conditions that are objective, transparent and non-discriminatory".

1.2. The missions

1.2.1. A mission entrusted by law to the DGPT

While in matters of competition, responsibility generally falls to the Office of Fair Trading (DGCCRF - Direction Générale de la Consommation, de la Concurrence et de la Répression des Fraudes) of the Ministry of the Economy, the LRT entrusts the Minster responsible for telecommunications, and thus the DGPT, with the mission of ensuring respect for fair competition, particularly between France Télécom and its competitors.

The authority of the DGPT is thus based on the elements of national and Community law described above.

In order to actually exercise its authority and carry out a comparative analysis of the conditions under which services are provided, the DGPT can conduct investigations among all the players in the telecommunications sectors.

In addition, in case of a disagreement between parties, Article 11 of the schedule of terms and conditions of France Télécom gives the DGPT the responsibility for arbitration in order to determine interconnection rights between France Télécom and its competitors.

GUIDELINES TO FAIR COMPETITION

In March 1994, a document entitled "France Télécom's Operations in the Competitive Sector" was published by the DGPT as an appendix to the summary of the public consultation on developments in telecommunications regulations (this document is available upon request to the DGPT by fax on (33-1) 43 19 65 34).

This document sets out a general framework for France Télécom operations, particularly at the different stages of its marketing activity, which is intended to eliminate any competitive advantages deriving from its special status (reserved rights). A summary of the recommendations that came out of this process, which since then has served as a reference for the DGPT's activity, is given below.

MARKETING ACTIVITY

A. France Télécom data and its use

  • Ensure that data files are used in conformity with their purpose.
  • Separate data files according to the business operation involved.
  • Ensure that third parties have access to available information under conditions that are objective, transparent and non-discriminatory.
  • Prohibit the use of data files held as part of the monopoly in order to canvass for services in competition.
  • Prohibit France Télécom from canvassing subscribers in the unlisted numbers directory.
  • Allow directory publishers access to the unlisted numbers directory.

B. Advertising and the group's image

  • Allocate advertising costs to each product line.
  • Produce distinct advertising material for reserved services and services in competition.
  • Distinguish the marketing name of a product (or service) from its generic name.
  • On advertising material, note the competitive character of the appropriate products or services.
  • For material related to the monopoly (telephone bills, call boxes), prohibit the insertion of advertising for services in competition.
  • Prohibit sending advertising to subscribers in the unlisted numbers directory.

C. Marketing practices

  • In procurement contracts, distinguish France Télécom's expert role from its role as a tendering party.
  • When France Télécom is active on private markets, ensure that its expert activity is carried out under conditions of fair competition.
  • In package sales offers, distinguish information relative to the different services and products offered (whether they are from the reserved sector or the competitive sector).
  • Ensure that products and services in competition are identified in sales offers, canvassing material, advertising messages or documents, distribution channels, and when carrying out studies and drawing up bids.
  • Mention the competitive character of products and services in all marketing material in sales offices and elsewhere.
  • Issue invoices that are visibly distinct for products and services in competition.
  • Use transparent accounting principles at France Télécom sales offices.

THE COMPANY'S CONDUCT

  • Distribute a guide to France Télécom sales agents that includes in particular general information on the law of competition, on practices to be avoided in advertising campaigns, on the conditions for using information held by France Télécom, and on the conditions of any package sales offer.
  • Eliminate any mention of "official directory" on any directory published by the public operator.
  • Disseminate information on developments in the public network or the reserved services of France Télécom.
  • Develop cooperation between the partners.

1.2.2. Two complementary approaches

Ensuring compliance with fair competition conditions: this is a mission that is both a priori, through preventive actions, and a posteriori, when the DGPT intervenes at the request of competitors who believe themselves to be victims of unfair competition practices by other companies (particularly, though not exclusively, on the part of France Télécom).

Preventive approach

The first source for the principles regulating competition is the conditions included in the licences authorising France Télécom and its competitors to exercise various types of operations. These principles are also contained in the tariff regulations, which help ensure that there is equal access by France Télécom and its competitors to the different services for which France Télécom still holds exclusive rights.

In addition, during the public consultation on the evolution of the French regulatory framework organised at the end of 1993 by the DGPT, there was more general consideration given to drawing up a referencing system for the ways in which France Télécom carries on its operations, in particular, in the area of marketing products and services facing competition. All the players consulted urged that France Télécom respect the principles of fair competition, the guidelines to which were made public by the regulator (see box).

In addition, this consultation, a summary of which was published in March 1994, showed the need to measure the business operations of France Télécom in the competitive sector and publish the results.

Such an evaluation is aimed at establishing a better balance in the information available to France Télécom as well as its competitors. This involves developing a precise understanding of the public operator's activity on these markets, and identifying their characteristics (size, active length of time, number and structure of businesses present, personnel, overall turnover, etc.).

An initial study has made it possible to outline the boundaries of the market to be assessed. It also brought to the fore several difficulties in carrying out this effort, involving the collection and publication of data: the diversity of sources, the fragmented and heterogeneous character of the data, and the question of using the data in a publication. This project should be carried through in 1995, at least for some of the markets involved — for example, the installation of private telephones, written and voice telematics, and the IT service company sector.

A posteriori approach

This kind of approach to submitting matters to the DGPT is different from a legal dispute, which falls under the jurisdiction of the Courts and the Council on Competition. The aim of the regulator's activity here is to ensure as quickly as possible the re-establishment of conditions of fair competition, in cases where the complaints brought by companies are valid. In a sector where competition is still just emerging, some new players are fragile and delays involved in procedures before the relevant courts can prove too long for their viability. It should be noted, however, that a summary application for an interim order might be a satisfactory and rapid solution for the plaintiff.

2. Actions taken in 1994

Based on the principles set forth above, the DGPT examined cases brought before it that led to making analyses and proposing solutions to put an end to certain practices that were contrary to the principles of fair competition. In order to safeguard the confidentiality of certain data, these cases are not presented individually here, but are broken down in such a way as to identify the different types of problems that arose:

2.1. Marketing and advertising practices

Two matters submitted to the DGPT enabled it to re-establish fairer conditions of competition. These cases involved value-added services offered on a public switched telephone network, that is, a conference call service and a voice mail service.

2.1.1. Taking into account marketing costs

In the first case, the competitor to France Télécom asserted that prices charged by France Télécom for its conference call service were abnormally low relative both to its own costs as well as to international practice. Because of this, the emergence of genuine competition on this market segment was virtually impossible.

Conference call tariffs, first quarter 1994,

in FFr per minute, excluding cost of telephone call (exchange rates at 16/02/94)

AT&T

2.35

MCI

2.35

BT

0.87

DBT Telekom

4.25*

Nederland telekom

1.10

Televerket Suède

2.92

Televerket Norvège

1.52

Telecom Finland

2.1

France Télécom

0.67**

* : cost of phone call included

** : additional cost reduction of 30 % when the cost exceeds FFr 1200 (excl. tax) per month.

A study of this matter by the DGPT revealed that the prices charged by France Télécom could in fact be considered to be "eviction prices", that is, prices that do not allow a competitor to remain on the market. In particular, payments to the sales network, and thus the cost for marketing France Télécom's conference call service, were significantly below cost.

After a new evaluation, which applied real costs, and after taking these into account in determining prices, France Télécom increased its tariffs, which are now slightly below the international average for equivalent services. The DGPT asked France Télécom and its competitor to analyse the results of their business at the beginning and in the middle of 1995, so as to be able to assess the impact of these measures on the growth of the conference call market, which is still under-developed in France.

2.1.2. Advertising practices

In addition, there was an advertising inset for its conference call service in the information pages of all France Télécom telephone directories. This advertising inset was considered to be an "information service" (and not advertising) by France Télécom, and thus was not subject to payment in the eyes of the Advertising Office (ODA - Office d'Annonces), the state-run advertising agency for France Télécom directories.

The DGPT held that for all services in competition, in particular for the conference call service, this kind of advertising inset, which France Télécom treated as information, should be considered to be advertising, and as such valued according to the applicable ODA tariffs. The DGPT noticed that in some cases, in particular for conference calls, France Télécom preferred to eliminate all mention of services in competition in the "information" pages of its directories.

An identical situation (advertising for a competitive activity not assessed as such when using material from the monopoly operations) arose in the case of a voice mail service provided by a private company in competition with France Télécom's Mémophone service. Here the service was mentioned both in the "information" pages of the phone directories and in all France Télécom's public call boxes. France Télécom chose the same solution as in the conference call case, deciding to no longer mention this service in advertising material related to its monopoly.

In addition, France Télécom undertook to mention in its advertising material the competitive character of its services whenever relevant.

Finally, another advertising case, a proceeding brought by Société Française de Radiotéléphone (SFR), led to a summary judgement in the Paris court of first instance. Basing the decision on the work of the DGPT in particular, the judge ruled against France Télécom for using telephone invoices in order to advertise for Itinéris, France TélécomÕs GSM mobile phone service, a competitor of the SFR service.

ADVERTISING AND MARKETING

PRACTICES

SUBJECT OF COMPLAINT

CHANGES IN SALES CONDITIONS

Under-valuation of marketing costs (conference calls)

Re-assessment of marketing costs, taken into account in setting tariffs

Advertising in the "information" pages of directories not included in costs (conference calls, voice mail)

Advertising costs taken into account in setting tariffs or elimination of advertising: second solution adopted by France Télécom

Mention of competitive character of services in advertising material

Advertising in call boxes (an area involving exclusive rights) not included in costs (voice mail)

Idem

2.2. The technical and financial conditions for access to France Télécom's networks and services

Complaints submitted to the DGPT call into question France Télécom's compliance with one of the ONP principles: equal access to the network.

Certain of its competitors have complained that France Télécom does not provide them with the network elements necessary for their service under the same conditions that it does for its own services or those of its subsidiaries. Depending on the particular case, this involves leased lines, space resources, interconnection points with the switched network, etc. The customers' complaints touched on tariff and technical matters.

ï In some cases, France Télécom did not adhere to the tariff conditions in its price catalogue when making up package offers (free installation, volume discounts, etc.). It was therefore able to provide services at a lower price than its competitors, who are themselves dependent on France Télécom catalogue tariffs.

France Télécom then adjusted its tariffs and included the conditions for providing services that are part of package offers in its price catalogue. This amounted to carrying out an a posteriori regularization. Despite this, France Télécom did benefit from an unjustified competitive advantage, as at the time when it made its offer these new conditions were not available to the competition. The DGPT informed it that such a practice was not acceptable.

Providing services below the catalogue price could amount to financing services in competition by resources derived from the monopoly: this amounts to a "cross-subsidy", a practice that distorts competition between France Télécom and its rivals.

ï In other cases involving the provision of services in competition, France Télécom used parts of its network that it does not make available to its competitors (international routing centres, the space segment of Télécom satellites 1 and 2, etc.). In 1995, the DGPT will study these matters in particular.

CUSTOMISED SUPPLY OF LEASED LINES

For France Télécom, the only possible exception to the obligation to provide services under conditions generally accessible to all involves leased lines. Article D 371 of the Order of 28 July, which transposes the ONP-leased lines directive into French law, specifies that "whenever, at the request of a specific user, the public operator intends to supply a leased line with particular characteristics, it shall inform the regulatory authority of the financial and technical conditions involved. Depending upon market demand, the regulatory authority may then ask the public operator to make public the conditions pertaining to these lines."

Based on this article, and at the request of the DGPT, France Télécom included the technical and tariff conditions for its 34 Mbit/s service in its 1995 catalogue.

The public consultation on leased lines held by the DGPT in 1994 showed that the principle of providing customised leased lines was not itself called into question by users. Nonetheless, the majority of users believed that procedures involved for France Télécom and the users should be accompanied by greater transparency and more visibility for both customers and competitors. In particular, they are concerned that these customised lines might constitute a means of applying reduced tariff rates that are not transparent on products in the catalogue. Furthermore, the DGPT undertook to annually publish the technical and tariff conditions for these services in a way that is compatible with trade secrets.

In 1994, France Télécom notified the DGPT of only one customised service, involving a group of very high speed leased lines with the following characteristics :

" A 100 Mbit/s capacity FFDI ring fibre optic data network linking 3 sites separated by about 300 meters, for a 3-year contract. The price includes initial costs (FFr186,000 excl. tax) and a monthly charge (FFr 75,025 excl. tax)."

2.2.1. The financial conditions for access to the France Télécom network

Two cases were submitted to the DGPT complaining of the financial conditions for access to the France Télécom network. These two cases are different in that the authority of the DGPT derives, in one case, explicitly from the terms of service authorisation, and in the other case, from the DGPT's general authority in matters of competition based on the Code of Posts and Telecommunications.

The first case involved arbitration requested by SFR concerning the conditions of interconnection of its mobile phone network to France Télécom's fixed network: this is discussed Chapter 4 of this report.

The second case concerned France Télécom's global virtual private network services (Colisée), for which some France Télécom competitors challenged the level of tariffs, which do not take into account the cost of leased lines.

COLISEE: A REGULATORY ANALYSIS

France Télécom's Colisée service consists of two distinct services, each of which is in competition, insofar as these involve services distinct from telephone service as defined in the "Services" Directive of 1990, that is, "the operation for the public of direct transmission and real-time switching at the start and termination points of the public switched telephone network (PSTN)".

The Colisée service referred to as "on-net" or "internal-internal", both domestically and internationally, is exclusively made up of leased lines linked to a dedicated switch, called a "Rivage" switch: it is thus reserved for a closed user group (CUG). The "off-net" or "internal-external" service (which only exists for calls internationally and for links between metropolitan France and the Overseas Departments) links the customer to the international public switched telephone network by means of dedicated access (leased lines and the Rivage switch), not via the PSTN.

Insofar as this involves a service in competition, France Télécom must respect the conditions for fair competition, which implies the equal technical and tariff treatment of its competitors. This is why competitors must have access to the same "building blocks", under conditions identical to those that France Télécom applies to its own services.

During exchanges of information with the DGPT, the competitors explained that to provide an equivalent service they are obliged to make use of France Télécom lines leased at "catalogue" list tariffs. As the price of a leased line depends to a great extent on its length, the competitors can only provide virtual private network services at attractive rates for customers located within a limited radius around their switch. However, it is apparent that France Télécom has a customer base located throughout the national territory, whereas the Colisée switches are all located in the same part of the Paris region. Thus, to set up its service, France Télécom uses a large number of long-distance leased lines, without any impact on its tariffs.

France Télécom admitted that its Colisée service would run at a decided loss if the leased lines were valued at the commercial rate published in its price catalogue. At the same time, it explained that the Colisée service was designed at a time when it was the only player on the market: the matter of fair competition was thus not raised. For the DGPT, this matter pointed to the need to reduce tariffs for France Télécom leased lines (see Chapter 6); the initial impact of this reduction will be felt by all users in 1995.

As a new service (Transgroupe) will gradually be substituted for the Colisée service as it exists today, the DGPT decided to aim its efforts at clarification towards future service, and particularly to ensure that the new operating conditions of these services will scrupulously respect the principles of fair competition. The balancing out of past deficits will be passed along to the new Transgroupe service.

FINANCIAL CONDITIONS FOR ACCESS TO

FRANCE TELECOM SERVICES

SUBJECT OF COMPLAINT

CHANGES IN SALES CONDITIONS

Offer of customised leased lines for types of lines not found in the catalogue or for conditions not found in the catalogue

Information to be submitted to the regulator who:

  • either publishes the characteristics of the lines involved and the conditions of the offer;
  • or requests that the price of lines that are requested frequently are included in the catalogue.

Conditions of interconnection of the SFR mobile phone network to the France Télécom fixed network

Arbitration: definition of principles of interconnection and determination of tariffs

Principles of arbitration applicable to all mobile phone networks

Leased lines making up the virtual private networks (Colisée) not valued at catalogue tariffs

Goal: equal access to the France Télécom network for competing companies

Means: reduction of tariffs for leased lines, particularly international ones and between France and its Overseas Departments; the postponement of past deficits into future operating accounts so as to ensure their a posteriori financing

Reductions on bearer services not included in the Transpac catalogue — legal, but not sufficiently transparent

Modification of Transpac tariff document: more details on the volume and duration conditions of contracts giving the right to reductions

TOWARDS MORE TRANSPARENCY IN TRANSPAC TARIFFS

The DGPT faced another question involving tariffs: this concerned tariffs for bearer services provided by Transpac.

Transpac submitted the winning bid in a company's invitation to tender by proposing reductions to the customer that were greater than those in its price catalogue. A company that had responded to the same invitation to tender, but which had proposed a VSAT solution, brought the matter before the DGPT.

In tariff matters, Transpac has the same freedom as its competitors to set tariffs for bearer services. Nonetheless, this France Télécom subsidiary is required by its license to meet certain specific obligations concerning the way in which tariffs are set and made public.

This is why the DGPT requested that Transpac's published tariffs should be more precise concerning the volume and duration of contracts that give the right to additional reductions, as well as concerning the range of reductions proposed. Large-scale users will be consulted in order to determine how much precision is desirable to obtain a mix of flexibility and transparency in tariffs. This measure will promote the equal treatment of customers, whether an end user or a competitor of Transpac that must use the latter's services as one of the "building blocks" of its offer.

2.2.2. The technical conditions of access to the France Télécom network

From a technical viewpoint, ensuring equal access to the France Télécom network occasionally demands a more long-term action: it could be necessary, for example, to make physical, organisational or software changes to the network. Some practical progress has already been made in 1994, while other, more complex questions are still being examined.

The DGPT requested that France Télécom re-establish conditions for fair competition. To achieve this objective, the public operator proposed two sets of measures, which were accepted by the regulator. First, it converted its own service into a genuine Audiotel service, both as concerns tariffs and access (except for the numbering, which is still specific to it).

Secondly, it suppressed all current restrictions on access. Henceforth, all Audiotel services can be accessed from any kind of terminal (telephones, public calling card telephones and coin phones, and those using FT charge cards read directly or indirectly). The only restriction maintained was for the Audiotel 36 70 service, using FT prepaid phone cards and charge cards read directly; France Télécom justifies keeping this restriction by the ethical problems raised: the high rates charged, due to the system of partial payments specified by contract, has attracted a large number of services that depart from the ethical rules attached to telematics contracts. The DGPT has had the company submitting the matter pose this question to the Higher Council on Telematics (Conseil Supérieur de la Télématique), which has responsibility for the ethical principles of telematics.

Direct access to Transpac using channel D was set up in 1992, a period when Transpac was the only supplier of this type of service. By the end of 1993, some 2,000 direct access points had been set up. By the end of 1994, this figure had risen by a factor of 10, representing about 20% of the total number of access points. Transpac's ability to offer this kind of access thus constituted a decisive factor in its growth and contributed to distorting the market to the disadvantage of the competition.

At the request of the DGPT, France Télécom undertook to make Channel D available to any authorised supplier of data transmission services requesting it. The regulator would only intervene on a case by case basis should the parties not be able to reach an agreement on the conditions for this access.

TECHNICAL CONDITIONS FOR ACCESS TO

FRANCE TELECOM SERVICES

SUBJECT OF COMPLAINT

CHANGES IN SALES CONDITIONS

Special access and tariff conditions for France Télécom's voice mail service, other service providers having to supply equivalent services, in the form of Audiotel on-line services

Aligning France Télécom service on Audiotel conditions

Lifting all current access restrictions for Audiotel services from public calling card telephones and when using FT charge cards (except 36 70 services for ethical reasons)

Access to bearer services using channel D of Numéris reserved for Transpac

Opening of this access to other authorised bearer service providers who request it. Interconnection conditions to be defined among applicants and France Télécom, potential arbitration by the DGPT

Exclusive use by France Télécom, supplier of services in competition, of parts of its network that it does not make available to its competitors: international routing centres, (global virtual private networks), Télécom 1/Télécom 2 space segment

Ongoing study of opening up the network

2.3. The installation of private telephone systems and the risk of upsetting a market

The market for installation of private telephone systems consists of the installation of equipment, for example, PABXs, that require the work of "approved installers". This market has specific characteristics. In particular, on this market segment France Télécom is a new player facing established players, including manufacturers of telecommunications equipment and independent installers.

France Télécom's strategy, which is aimed at strengthening its position on this market segment, has led it to adopt a more aggressive attitude than in the past, first, by restructuring these operations, which had previously been scattered throughout the group, and second, by acquiring a number of independent installers. France Télécom initially bought two large companies (Cofratel and Sogestel), each with an annual turnover of about FFr 500 million. This policy has continued with the takeover of a larger number of more modest companies, which have an annual turnover of a few million French francs. In this way, France Télécom's market share has grown from less than 10% to about 20% in three years. Despite this, France Télécom is not in a dominant position on this market, where manufacturers have the lion's share (reaching a level of 60 to 70% of the market).

France Télécom's recent expansion on the installation market has provoked concern from independent installers, which has been expressed by their trade association, FICOME: in particular, they fear seeing their market share continue to fall. It is in this context that a moratorium was concluded between the Ministry in charge of telecommunications and France Télécom's General Management, with France Télécom renouncing any more significant acquisitions.

The DGPT is attentively following developments on this market. For the moment, the solution (adopted in the case of EDF) of "walling off" France Télécom's activity has not been adopted, as France Télécom is authorised by law to carry on any kind of business in the telecommunications sector. Nonetheless, further concentration of this activity within France Télécom could give rise to limits imposed due to over-concentration, as provided by general competition law.

Limiting concentration

There are two series of regulations authorising the intervention of the public authorities in case of a change in France Télécom's sphere of operations. One is unique to the public operator, and the other applies generally to any business company in cases of concentration.

Article 32 of the schedule of terms and conditions of France Télécom: while France Télécom is authorised to hold or to create or to purchase or sell shareholdings, the prior approval of the Ministry in charge of telecommunications and the Ministry of the Economy is required when the amount of these operations is greater than FFr 300 million.

Article 38 of the Order of 1 December 1986 on the freedom of prices and competition sets a dual alternate threshold that requires the a priori intervention of the Ministry of the Economy, which is itself authorised to seek the opinion of the Council on Competition. The companies involved in the acquisition of shareholdings must either have a combined business that covers more than 25% of the national market or a substantial part of it, or have a total annual turnover of more than FFr 7 billion (excl. tax), with two of them having a turnover of at least FFr 2 billion. The advisability of this concentration is then examined to determine whether it represents a "sufficient contribution to economic progress to compensate any obstacles created to competition".

For the moment, neither of these thresholds has been reached in the market for telecommunications installation. The thresholds set by European law to invoke a similar intervention on the part of the Commission are higher than those set by national law.

In order to better understand the impact on the market for private telephone installation of developments in this sector over the last several months, the DGPT decided to measure and publish its findings concerning the impact of France Télécom activity on this market, the market shares of the other players, as well as the conditions for intervention for each of these categories. Thus, a study will be carried out by an independent expert in 1995, the results of which will make it possible to understand in particular whether the thresholds authorising the authorities supervising competition have been reached.

Chapter VI