Republic of France

MINISTRY OF INDUSTRY, POSTS
AND TELECOMMUNICATIONS

POSTS, TELECOMMUNICATIONS AND SPACE

DECREE

ON INTERCONNECTION UNDER ARTICLE L.34-8 
OF THE POSTS AND TELECOMMUNICATIONS CODE

	The Prime Minister,

	Based on the report of the minister of posts, telecommunications and space,

	Having regards to the Posts and telecommunications code, and notably to articles L.33-1, L.34-1, L.34-8, L.36-5, L.36-6, L.36-7 and L.36-8, under the Telecommunications Act n° 96-659 of 26 July 1996 ;

	Having regards to amended law n° 86-1067 of 30 September 1986 on the freedom of communication ;

	Having regards to the report of the Telecommunications Regulatory Authority dated 21 February 1997,

HEREBY DECREES :

	Article 1 - There shall be inserted a section III of chapter II of title I of book II of the third part of the Posts and telecommunications code, worded as follows :

“Section III
“Interconnection

Paragraph I

Principles to apply to all operators

	Art D 99-6 - Interconnection shall be the subject of an agreement between parties covered by common law. This agreement shall conform to the provisions of article L. 34-8, to the provisions of the present code, and to the licences of the two operators concerned.

	The agreement shall be sent to the Telecommunications Regulatory Authority less than ten days after its establishment. The Telecommunications Regulatory Authority may, on request, communicate to third parties concerned the information contained therein, with the exception of information covered by corporate secrecy.

	Operators with access to information in the context of a negotiation or the establishment of an interconnection arrangement may only use that information for ends explicitly mentioned at the time it is communicated. In particular, this information may not be communicated to other departments, subsidiaries or partners for whom it might constitute a competitive advantage.

	There shall be established a Committee for Interconnection under the Telecommunications Regulatory Authority associating notably operators authorised under articles L 33.1 and L 34.1. This Committee shall be chaired by the Telecommunications Regulatory Authority which shall set out its composition and mode of operation.

	If, once an licence has been granted, the Telecommunications Regulatory Authority includes an operator on the established list in application of 7° of article L.36-7, the schedule of terms and conditions associated with the  licence of this operator will be modified in order to include new corresponding obligations relative to interconnection and will set the date by which the standard interconnexion offer must be published.

	Art. D 99-7 - Operators shall take all measures, which they specify in their interconnection, necessary to guarantee conformity with the essential requirements, and in particular :
	- the security of the operation of the networks ;
	- the maintenance of the integrity of the networks ;
	- the interoperability of the services, including contribution to end-to-end quality of service ;
	- protection of data, to an extent necessary to ensure conformance to provisions which relate to data protection, including the protection of data of a personal nature, protection of privacy and confidentiality of information processed, transmitted or stored.

	They shall identify the measures taken to guarantee the maintenance of access to the networks and to the telecommunications services in cases of failure of the network or in extreme cases.
	The operators shall conform, where appropriate, to the technical specifications adopted under the conditions provided for in 3° of article L.36-6 of the posts and telecommunications code by the Telecommunications Regulatory Authority with a view to ensuring conformity with the essential requirements.

	If interconnection with a third party seriously disrupts the proper operation of the network of an operator, or does not respect essential requirements, the operator, after technical verification of the network, shall inform the Telecommunications Regulatory Authority. The latter may then, where appropriate, authorise the suspension of the interconnection. It shall inform the parties of this, and establish the conditions to be met for it to be re-established.

	Two operators having established an agreement for interconnection must inform each other, with advance notice of not less than one year, except under mutual agreement or if the Authority decides otherwise, of modifications in their network which require the interconnected operators to modify or adapt their own configuration.

	Art. D 99-8 - Interconnection interfaces shall be defined by the operators in the framework of interconnection arrangements.

	When European specifications exist relative to interconnection interfaces, operators shall show preference for their introduction and use.

	Based on an initiative of the Telecommunications Regulatory Authority or of an operator, technical specifications relative to interconnection may be adopted and published by the Telecommunications Regulatory Authority. The definition of the interconnection interfaces concerned, their functions, their means of adaptation or their evolution shall be drafted by the committee defined in article D 99-6.

	In conformance with article D 99-7, the Telecommunications Regulatory Authority shall adopt and publish technical specifications to which interconnection interfaces must conform with a view to guaranteeing respect of essential requirements and end-to-end quality of service. 

	An interconnection interface may only be used in the context of an interconnection arrangement if the corresponding intellectual property rights are available and accessible under transparent, reasonable and non-discriminatory conditions, except where derogation is accorded by the Telecommunications Regulatory Authority in the light of the existence of equivalent alternative solutions.

	In the event of disagreement about the definition of an interconnection interface, about adaptation procedures or its evolution, one or other of the parties may call upon the Telecommunications Regulatory Authority to make a determination under the conditions provided for in article L.36-8.

	Before the effective establishment of  interconnection, the interfaces shall be the subject of tests defined and carried out jointly by both operators concerned. These tests shall be carried out on site, if one of the parties so requests. In the event of interconnection tests not being carried out within normal technical conditions and time frame, one or other of the parties may request that the Telecommunications Regulatory Authority intervene.

	Art D 99-9 - Interconnection arrangements shall specify as a minimum, except with the accord of the Telecommunications Regulatory Authority : 

- with respect to general principles :

	- commercial and financial relations, and notably procedures for billing and debt recovery as well as terms of payment ;
	- the transfer of required information between the two operators and the periodicity or corresponding notice ;
	- the procedures to be followed in the event of a proposed change in the interconnection offer by one of the parties ;
	- the definitions and limits of liability and compensation between operators ;
	- intellectual property rights where appropriate ;
	- the duration and conditions for re-negotiation of the agreement.

- with respect to the description of the interconnection services provided and the corresponding remuneration :

	- the conditions for access to basic services : switched traffic and, for public networks operators, leased lines ; 
	- the conditions governing access to complementary services ;
	- billing services for third parties ;
	- the conditions governing the sharing of facilities linked to the physical connection of the networks.
 
- with respect to the technical characteristics of interconnection services :

	- the measures set in place to allow for equal access of users to the different networks and services, equivalent formats, and the portability of numbers ;
	- the measures which aim to ensure compliance with  the essential requirements ;
	- the comprehensive description of the interconnection interface ;
	- billing information supplied at the interconnection interface ;
	- the quality of the services provided : availability, security, efficiency, synchronisation ;
	- the procedures for routing traffic.

- with respect to the procedures for the establishment of the interconnection : 

	- the conditions for the establishment of the service : procedures for traffic forecasting and implementation of interconnection interfaces, procedures for the identification of the ends of leased lines, the time frame before making it available ;
	- the designation of points of interconnection, and the description of the physical procedures for interconnection ;
	- the procedures for the reciprocal sizing of the interface equipment and the common systems in each network so as to maintain the quality of service provided for in the interconnection agreement and conformity with the essential requirements ;
	- the procedures for testing the operation of the interfaces and the interoperability of services ;
	- the procedures for intervention and recording of malfunction.
	Art D 99-10 -The pricing conditions of interconnection agreements shall respect the principles of objectivity, transparency, and non-discrimination. 
	They shall not lead to the undue imposition of excessive expense on the operators using the interconnection.

	It must be possible to justify them, if so requested by the Telecommunications Regulatory Authority.

	The operators shall provide interconnection under non-discriminatory conditions, including with regard to their own departments, subsidiaries or partners.

Paragraph 2

principles to apply to operators on the list establised
in accordance with 7° of article L. 36 – 7

	Art D 99-11 - The operators on the list established in accordance with 7° of article L.36-7 shall be required to publish, under the terms determined by their schedule of terms and conditions, a standard price offer  describing a technical and tariffed interconnection offer, with the prior approval of the Telecommunications Regulatory Authority. They shall be subject to the provisions of the present paragraph.

	These operators may not invoke the existence of an offer inscribed in the standard offer to refuse to enter into commercial negotiations with another operator with a view to determining conditions for interconnection not provided for in their standard price offer, notably conditions for direct access to international gateway switches and other international facilities. Any condition for interconnection not provided for in the operator’s standard offer must be specified as such in the interconnection agreement. 

	The offers inscribed in the standard offer published by these operators shall contain the different conditions to respond, on the one hand, to the interconnection needs of public network operators and, on the other hand, to the network access requirements of providers of public telephone services, taking into account the rights and obligations specific to each of these categories of user. These conditions shall be sufficiently detailed to make evident the various elements which are specific to a response to a requirement.

	The information which is necessary to the establishment of the interconnection shall be supplied to other operators under the same conditions and to the same degree of quality as that which these operators provide to their own departments or to their subsidiaries or partners. They shall inform the other operators of modifications to their interconnection offer with notice of no less than six months, unless the Telecommunications Regulatory Authority decides otherwise.

	Art D 99-12 - These operators shall provide interconnection under non-discriminatory conditions.

	The technical and financial terms of the interconnection services which they offer, under equivalent conditions, to other operators, notably the technical quality of the services, the time before availability and the availability of these services, must be the same as those established, if the case may be, for their own departments or for their subsidiaries or partners.

	The conditions which apply to these operators for their own access to the elements of their network are defined in paragraphs l) and m) of the register of conditions of the licences which they are granted.

	The technical and financial terms of the interconnection services which they offer to their own departments or subsidiaries or partners shall be described, depending on the case, in interconnection arrangements and agreements. It must be possible to supply proof of them at the request of the Telecommunications Regulatory Authority. 

	These operators shall keep a separate accounting system for their interconnection activities, the specifications of which are set out in the conditions mentioned in article D99-13. This is with the aim of putting a value on the activities, services or network elements used by these operators at their external price or, failing that, through reference to the tariffs in use by these operators with respect to users or operators who interconnect to their network.

	This separate accounting system shall allow in particular for the identification of the following costs :

	– general network costs, that is, costs which relate to the network elements used at the same time by the operator for services to its own users and for interconnection services ; these network elements are notably the switching elements and the transmission systems necessary to the provision of all services ;

	– costs which are specific to interconnection services, that is, costs caused directly and uniquely by interconnection services ;

	– costs specific to the services of the operator other than those of interconnection, that is, costs caused uniquely by these services ;

	– common costs, that is to say, costs which do not come under one of the above categories.

	The elements which pertain to the information system and the accounting data shall be furnished to the Telecommunications Regulatory Authority on request of the latter.

	Art D 99-13 - The Telecommunications Regulatory Authority shall establish and publish the specifications and the description of the cost accounting systems of these operators adapted to the verification of the respect of the principle of non-discrimination as described in article D 99-12 and the tariff and relevance principles as described in articles D 99-17 and D 99-18.
	The cost accounting systems of these operators shall be audited on a periodic basis by an independent organisation. This organisation is designated by the Telecommunications Regulatory Authority for a period of three years. The audit shall be carried out at the expense of each of public network operators who are on the list established in application of 7° of article L. 36-7. This cost is part of the specific costs of interconnection services.

	The designated organisation shall publish an annual certificate of conformance.

	Art D 99-14 - When one of these operators wishes to use an interconnection interface which is not in its standard interconnection offer or to make complementary specifications to an interface in the standard interconnection offer, the operator shall communicate the technical specifications and the corresponding services to the Telecommunications Regulatory Authority. The Telecommunications Regulatory Authority may make these specifications public to safeguard the principle of non-discrimination or when it considers that such publication is in the general interest of the community of operators.

	Art D 99-15 - The technical conditions and tariffs for the interconnection services of these operators must be sufficiently detailed to make evident the various elements which are specific to a response to a request. In particular, the tariffs which relate to interconnection services must be sufficiently unbundled so that it is possible to be certain that the requesting operator only pays for use of the elements which are strictly linked to the service requested. 
	In application of this principle, these operators must in particular offer in their standard interconnection offer access to : 
		– their local exchanges ;
		– their switches in a higher hierarchy or an equivalent technical solution.

	Interconnection to a local exchange shall allow  access to all the operator’s subscribers who are accessible from this same switch without transit via another switch in a higher hierarchy.

	The standard interconnection offer of these operators comprises the list of local exchanges which are not open to interconnection for justifiable technical reasons, as well as the scheduled calendar according to which the concerned subscriber switches will be open to interconnection. However, when the routing of planned traffic of other operators coming from or destined for subscribers connected to a switch on this list justifies it, the operator with significant market power, must, on request from the Telecommunications Regulatory Authority, set up a transitory offer for this switch. The objective criteria according to which the Telecommunications Regulatory Authority may request the establishment of a transitory offer are set out by decree of the telecommunications minister under the conditions provided for in article L.36-6. This transitory offer shall allow the requesting operator access to a tariff structure which aims to reflect the costs which the said operator will have incurred, in the absence of technical restrictions to access, to route calls destined for or coming from a section of the subscribers linked to that switch and, on the other hand, subscribers who would have been accessible without transit through a switch in a higher hierarchy.

	Art D 99-16 - The standard interconnection offers of these operators must, as a minimum, include the following services and elements for public networks operators.
	– routing services for switched traffic, offering technical access and tariff options which allow for the principle of an unbundled offer to be put into practice as defined by article D 99-15 ;
	– complementary and advanced services and functions (including access to the resources of intelligent networks necessary in the framework of interconnection or 	the optimum routing of traffic) and the associated contractual procedures, as defined in a list drawn up prior to this by the Telecommunications Regulatory Authority, after consulting the Committee for Interconnection.

	– procedures for putting into operation the portability of numbers and operator selection so as to ensure equal access for all ;

	– a description of all the physical points of interconnection and the access conditions to these points when a third party operator is providing the interconnection link;

	– the technical and tariff conditions of the links between the interconnection points of the third party operator, and, in the case when this latter might wish to supply this link, the technical and tariff conditions of a physical and logical access to the interconnection points of these operators ;

	– a comprehensive description of the interconnection interfaces proposed in the standard interconnection offer and notably the signalling protocol used at these interfaces, and the conditions for putting them into operation ;

	– ending services for leased lines.

	The standard interconnexion offers of those operators for providers of telephone services to the public must include the services and elements listed above which take into account the rights and obligations integral to those providers.

	The Telecommunications Regulatory Authority, after consulting the Committee for Interconnection, may request that one of these operators revise its standard offer, and notably, to add or modify services listed in the standard offer, when such additions or modifications are justifiable with respect to the putting into practice of the principles of non-discrimination and the cost orientation of interconnection tariffs as well as the needs of the community of operators.

	Art D 99-17 - The tariffs for the interconnection services provided by these operators, whether they are included in their standard interconnection offer or are part of a supplementary offer, compensate the effective use of the transport and distribution network and reflect the corresponding costs. These operators must be able to demonstrate that their interconnection tariffs effectively reflect costs.
	For services contained in interconnection agreements which are not included in the standard interconnection offer set out under article D 99-16, the Telecommunications Regulatory Authority may request that these operators supply each element of information which will allow it to estimate if the tariffs contained in the agreements for these services reflect costs.

	Interconnection tariffs must be based on the following principles :

	1.– the costs taken into account must be relevant, that is, linked through a form of causality, direct or indirect, to the interconnection service supplied ;

	2.– the costs taken into account must tend towards increasing economic efficiency in the long term, that is, the costs considered must take into account investment for renewing the network, based on the best technology available in the industry and tending to optimum sizing of the network, based on the hypothesis of maintenance of service quality ;

	3.–  tariffs include an equitable contribution, in conformance with the principle of proportionality, to the costs which are common both to interconnection services and to other services, in respect of the principles of relevance of costs outlined in article D 99-18 and the economic stability of the operator ;

	4.– the tariffs include normal remuneration of capital employed for investment used as outlined in the conditions of article D 99-22 ;

	5.– the tariffs may be the subject of time frame variation to take into account congestion of transmission capacity and switching on the general network of the operator ;
	6.– the unit tariffs which apply for an interconnection service are independent of volume or the capacity of the elements of the general network used by this service ;

	7.– the tariff units must correspond to the needs of the operators interconnected.

	Art D 99-18 - The specific costs of the interconnection services shall be fully allocated to the interconnection services.

	The specific costs of the services of the operator other than those of interconnection are excluded from the cost base for interconnection services. In particular costs which are excluded are access costs (local loop) and the commercial costs (advertising, marketing, sales, sales administration apart from interconnection, billing and debt recovery apart from interconnection).

	The costs of the general network shall be shared between the interconnection services and the other services on the basis of effective use of the general network by each of these services. 

	Among the common costs defined by article D 99-12, the relevant common costs with respect to the activity of a telecommunications operator shall be shared between the interconnection services and services other than those of interconnection. Costs which are excluded in particular from relevant common costs are costs for general research and costs for higher education in telecommunications.
	The Telecommunications Regulatory Authority shall set out and publish the nomenclature for the :
	- costs of the general network ;
	- costs specific to the interconnection services ;
	- costs specific to the services of these operators other than those of interconnection ;
	- common costs ;
	- common relevant costs.

	Costs imputed to public networks operators, on the one hand, and to providers of a public telephone service, on the other hand, shall take into account the rights and obligations integral to each of these categories of operator.

	Art D 99-19 - Based on 1997 tariffs, while the Telecommunications Regulatory Authority has not defined another method in application of article D 99-20, and within the reservation of the 3rd clause of the present article, interconnection tariffs for a given year shall be based on the average projected accounting relevant costs for the year in question, evaluated by the Telecommunications Regulatory Authority also taking into account :

	- the efficiency of the new investment made or planned for by the operator with regard to the best technology industrially available ;

	- international references in the matter of interconnection tariffs and costs ;

	The average accounting costs are calculated based on information which comes from projected accounts, from the last audited accounts of the operator and from visible improvements in productivity.

	The Telecommunications Regulatory Authority may define the conditions for decreasing interconnection tariffs several times per year so as to incite economic efficiency with regard to international references in the matter of tariffs and interconnection costs.
	Art D 99-20 - After consideration within the committee for interconnection and public consultation, the Telecommunications Regulatory Authority shall define a method tending towards greater efficiency in the long term of costs taken into account than that resulting from the initial method outlined in article D 99-19 all the while respecting the principles outlined in article D 99-17. To this end, it shall use on the comparisons of the results of technical economic models and modelling based on the accounting system of the operator while maintaining reference to the international comparisons available. 

	The Telecommunications Regulatory Authority shall involve the operators in the elaboration of this method. The latter shall communicate to it, at its request, all information of a technical, economic or accounting nature that it uses while respecting corporate secrecy.

	The Telecommunications Regulatory Authority shall publish the method that it decides upon.

	Art D 99-21 - In order to take into account the effects of the development of competition in the interconnection market, and after consideration by the Committee for Interconnection and public consultation, the Telecommunications Regulatory Authority shall have the capacity to establish a new method to determine the interconnection tariffs based on principles and rules which may be different from those outlined in articles D 99-17 and D 99-18. It shall propose the modifications to be made to the current section prior to this new method becoming operational.

	Art D 99-22 - In order to evaluate interconnection tariffs, the rate of return of the capital employed shall be set by the Telecommunications Regulatory Authority taking into account the weighted average cost of the capital of the operator and that which an investor would bear for telecommunications network activities in France. 

	Article 2 - France Télécom shall be subject to articles D 99-11 to D 99-22 of the posts and telecommunications code until the first publication of the list provided for in 7° of article L.36-7 of the said code. It shall be required to publish, before 1 July 1997, a technical offer and price list for interconnection which must be approved prior by the Telecommunications Regulatory Authority. It must, under objective, transparent and non-discriminatory conditions, ensure access to its network to users and providers of telecommunications services other than telephone service to the public, as well as to audiovisual communication services declared in application of article 43 of law n° 86-1067 of 30 September 1986. It must also reply to justifiable requests for special access corresponding to unpublished technical or tariff conditions, originating from providers of services or users.

	Article 3 - The minister of industry, posts and telecommunications and the  minister of posts, telecommunications and space, shall be responsible, each as is his concern, for the execution of the present decree which will be published in the Official Journal of the Republic of France.

	Done in Paris, 3 March 1997

	By the Prime Minister :
	
	Alain Juppé					

The minister of posts,
telecommunications and space

François Fillon

		The minister of industry, posts,		and telecommunications

	Franck Borotra