Extension of call-by-call carrier selection and pre-selection to local calls

Call for comments on the conditions of implementation

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Paris, 21 May 2001

The purpose of this call for comments is to receive the opinions of all interested persons on ART's proposals regarding the conditions and timetables for the implementation of carrier selection for local calls under call-by-call selection and pre-selection.

These proposals are the fruit of work led by ART in a working group created especially for this purpose and which brought together all interested operators, as well as of an initial consultation on a working document made public on 6 March 2001.

Following this call for comments, ART will adopt a decision defining the conditions and timetables for implementing call-by-call selection and pre-selection for local calls in application of article L. 36-6 of the Post and Telecommunications Code.

Organisation of the call for comments

Players are invited to submit to ART their opinion on these proposals by Tuesday 12 June 2001 at the latest, to the following address:

Service Interconnection et Nouvelles technologies
Autorité de régulation des télécommunications
7, square Max Hymans
75730 Paris Cedex 15
France

Comments may also be submitted by e-mail to the following address: com@art-telecom.fr identified as being a "Réponse à l'appel à commentaires sur l'extension de la sélection du transporteur aux appels locaux".

ART reserves the right to publish all or part of the responses it receives, unless otherwise stipulated by the author. In this case, the author is invited to place confidential elements in an appendix.

For more information, contact Mr. Gweltas Quentrec, Access and interconnection services manager, on +33 (0)1 40 47 71 40 or by e-mail to gweltas.quentrec@art-telecom.fr.

Introduction

During the discussion process begun in 1997 to define the conditions for introducing call-by-call carrier selection, players considered that the initial conditions for the development of competing networks were such that they would not be able to collect local calls under economically viable conditions. Therefore, for this first phase of the development of competition, they requested that local calls be excluded from the services which might be selected by future carriers.

In this context, ART considered it necessary that local loop operators appearing in the list established in application of paragraph 7 of article L. 36-7 of the Post and Telecommunications Code be obliged to propose a call sorting offer in their interconnection catalogue and for the implementation of carrier selection.

ART decision no. 97-345 dated 17 October 1997 is still applicable both for call-by-call selection and for pre-selection. In both cases, the local loop operator routes to the carrier only those calls intended for called parties outside the local exchange; it keeps and routes those calls terminating inside the local exchange.

The current stage of development of the technical and economic conditions of interconnection (related in particular to the development of the interconnection of network operators at subscriber switches of France Telecom's network) is such that telephony service providers can prepare to launch carrier selection service offers which will include local call routing inside local exchanges.

ART took this development into consideration during work done on France Telecom's interconnection catalogue in 2000. At that point, all players expressed the desire to include local calls in carrier selection and that the interconnection offer appearing in the interconnection catalogue be adapted accordingly.

Thus, France Telecom's interconnection catalogue for 2001, which was approved by ART, includes such an offer which is to be implemented during the fourth quarter of 2001.

In order to prepare for the introduction of this offer, ART formed a multi-lateral working group which met on 8 February and 8 March 2001 to define the conditions of implementation. A working document examining the various possible options was sent on 6 March to all members of this group. ART has received seven contributions to this document.

On the basis of these works, ART's departments have drafted a number of proposals which are to be included in an ART decision defining the conditions and timetables for implementing carrier selection for local calls.

The aim of this call for comments is to give players the opportunity to submit their analysis and/or comments on these proposals prior to ART adopting such a decision.

At the same time, ART will hold specific discussions with consumer associations representing the telecommunications market in order to evaluate the impact of these proposals on relations between operators and consumers.

Legal framework

Article D. 99-16 of the Post and Telecommunications Code, as amended by decree no. 99-922 dated 27 October 1999 regarding carrier pre-selection, states that the interconnection catalogue of operators included in the list drafted in application of paragraph 7 of article L.36-7 of the Post and Telecommunications Code must include a call-by-call selection offer and a pre-selection offer to their network.

This article also states that in application of article L. 36-6, Autorité de régulation des télécommunications is responsible for determining the services concerned by the previous paragraph as well as the conditions and the timetables for implementing call-by-call carrier selection and pre-selection.

Therefore, ART is responsible for determining the means and timetables for implementing carrier selection for local calls under the two carrier selection mechanisms, that is call-by-call selection and pre-selection.

The adoption of such a decision in application of article L. 36-6 also supposes:
- prior to its adoption, that the Commission consultative des réseaux et services de télécommunications be consulted
- for its application, that it be approved by the Minister of Telecommunications

Proposals on the conditions of implementation

The proposals described above affect the conditions and timetables for implementing carrier selection for local calls. They reflect the analysis of ART departments at this stage based on comments made by players on this working document with respect to the options which have been identified by the working group and which were presented in the working document published on 6 March 2001.

These proposals deal with the following questions:

1. the joint introduction of local call selection as part of call-by-call selection and pre-selection
2. contractual relations with regard to end clients when introducing these new services
3. the order-taking procedures between operators for taking orders and handling requests
4. the date of introduction
5. the number of operators which might be pre-selected by each client
6. the costs and tariffs of corresponding interconnection services

1. Joint introduction of the call-by-call selection mechanism

One of the questions discussed by players during working group meetings dealt with simultaneously extending carrier selection to local calls for both call-by-call selection and pre-selection.

Indeed, in opposition to the requests of other operators and to what is included in its interconnection catalogue for 2001, France Telecom asks that this extension affect only the pre-selection mechanism.

Analyses done by ART departments show that introduction of call-by-call carrier selection for local calls is necessary to ensure consumers can choose from among competing carriers and to encourage the entry of competing carriers on the local call market.

Indeed, the fact that clients can currently pre-select only one operator means that upon extension (Cf. chapter 5), clients may only be able to choose the carrier already pre-selected for national, fixed-to-mobile and international calls for pre-selection of local calls. The introduction of call-by-call selection for local calls as well as pre-selection is therefore necessary to guarantee that consumers having subscribed to the pre-selection service do indeed have several carriers to choose from.

Moreover, over 3 million clients have already subscribed to call-by-call selection compared with some one million for pre-selection. A substantial number of call-by-call selection clients have also made specific investments to acquire terminals allowing them to dial call-by-call selection numbers for various types of calls in order to benefit from a wide choice of carriers.

The extension of call-by-call selection to local calls is therefore necessary to allow consumers having chosen call-by-call carrier selection to benefit from the effects of competition on the transport of local calls. It must also allow those carriers having targeted this category of consumer to propose offers including local call routing.

In this respect, it is important to note that all European countries having introduced pre-selection for local calls had also previously introduced call-by-call selection for this same category of calls, as shown by the table below.

Degree of openness to competition in Europe of the various categories of calls accessible via carrier selection
(Sources: 6^th report of the European Commission on the implementation of telecommunications regulations / ART)

Proposal: The extension of carrier selection to local calls must include the joint introduction of call-by-call selection and pre-selection.

2. Contractual relations with clients

Call-by-call selection and pre-selection suppose that there will be contractual relations between:
- the client and the local loop operator
- the carrier and the local loop operator
- the client and the carrier

The extension of the scope of services provided under each of these two mechanisms will affect each of these relations and may require that current contracts with current clients be modified. It is therefore important to determine whether the conditions for changing these contractual relations should be covered by specific rules when extending carrier selection to local calls. These rules could be presented as recommendations or conditions linked to order-taking procedures between operators when implementing these new services in interconnection.

In either case, the definition of such rules would not prejudice the application of the regulations under the Code de la consommation.

The analysis below from ART departments at this stage distinguishes between the extension of current call-by-call selection and pre-selection contracts to include local calls and the signing of new contracts for services including local calls.

2.1 Extending current contracts

It appears necessary that we appreciate the potential threat to the security of contractual relations between carriers and their clients when the services offered are extended to include local calls. We also need to determine whether it would therefore be appropriate to apply specific measures to limit these risks.

In this respect, it is important to emphasise that clients who do not wish to see their contracts modified would be justified in refusing to pay for the new services for which they would be billed. This should limit the risk of abuse with respect to consumers.

Still, analysis must take into account the specificity of the local call market and in particular the relative importance of this category of calls in consumers' invoices, especially for residential and business clients—small office-home office (SOHO—which are generally less well informed of changing services and tariffs for their telecommunications services. Thus, the appreciation of the risks of abuse seem in this case different from the case of extending carrier selection to fixed-to-mobile calls which was done simultaneously for all operators and all their clients in November 2000.

Thus, it appears necessary that we evaluate the effective possibility for clients to refuse to transfer routing of their local calls to the operators of which they are already clients.

This evaluation must distinguish between the specifics of contractual relations between carriers and their clients in call-by-call selection and pre-selection.

2.2 Pre-selection

In the case of pre-selection, the line holder has signed a contract which authorises the operator to order pre-selection from the local loop operator to which the client is connected. Once pre-selection has been implemented, pre-selectable calls (national, international and fixed-to-mobile) are routed by the carrier in a totally transparent way to the user. The extension of pre-selection to local calls will therefore lead the carrier to transparently route all calls for the client, except for calls to non-geographic numbers and certain specific services provided by the local loop operator (directory service, after-sales service, etc.).

Therefore, it appears necessary that users be clearly informed of the consequences—in particular with regard to tariffs—of extending pre-selection to local calls. This information must also allow them to remove or adapt paid pricing options related to the local call routing by their local loop operator.

Moreover, in order to ensure that clients can refuse to extend their contract to local calls, it seems indispensable that carriers be required to obtain the prior consent of their current clients for this extension.

This obligation, which is consistent with the representative relationship established with pre-selected clients, must also allow them to present necessary proof in the event of a subsequent challenge by the client of the effectiveness of his/her consent.

Proposal:

Pre-selection operators are responsible for obtaining prior consent from each client to order the extension of pre-selection to local calls.

ART also recommends that operators inform their clients beforehand of the consequences—in particular with regard to tariffs—of extending the pre-selection contract to include local calls and of the possible consequences of this extension on the services provided by their local loop operator.

However, it would be useful to carefully examine the legal forms which such proof of consent might take and to evaluate their impact on the costs which will be incurred by the carriers in obtaining and archiving it. Operators have offered several possible solutions, such as agreements using electronic signatures.

Players are invited to comment on this point. We ask that they give their analysis of the following:
- any risk of unfair practices with respect to consumers
- the simplicity of offering consumers the possibility of extending their current pre-selection contract
- the costs and timetables for implementation

2.3 Call-by-call selection

In the case of call-by-call selection, signing a contract with a carrier is not sufficient for access to be provided to the operator's services because the effective implementation of access to these services requires that at each call, the client dial the prefix of the supplier. The consent of the client is therefore guaranteed by the need to make a choice at each call.

Thus, the extension of current call-by-call selection contracts to include local calls does not necessarily require that any specific rules be defined.

Still, it seems necessary that operators clearly inform their current clients of the extension of the scope of calls accessible via their prefix, and more particularly those clients who benefit from "automatic" selection of their calls through the pre-programming of their terminal equipment (switches, boxes).

Proposal: ART recommends that operators clearly inform their current clients of the extension of the scope of calls accessible.

2.4 New contracts

The case of clients taking out new contracts including the local call routing will not necessarily require that any new rules be defined. Indeed, the rules already applicable for call-by-call selection and pre-selection will continue to apply to future services including local call routing.

In this respect, certain operators have requested that when the conditions for the extension of carrier selection to local calls are defined, that the applicable obligations regarding the subscription of pre-selection contracts also be redefined, in particular with respect to the prior receipt by the pre-selection operators of a written and signed authorisation from the client.

This request targets primarily the means of recording pre-selection authorisations to include more flexible and economical forms for the operators, such as electronically signed authorisations or recorded verbal authorisations.

We still need to carefully study the legal form of these proposals, which might help improve the economic conditions for operators on the pre-selection market of interventions. The regulations could be changed in this way only following a re-examination of the conditions of the implementation of pre-selection, and will therefore have to be covered by specific works.

Proposal: Planned obligations for new call-by-call selection and pre-selection contracts will remain applicable to services including local call routing.

3. Order-taking procedures between operators

The introduction of carrier selection for local calls requires that conditions be defined under which the operators can place orders to extend the services currently provided under both mechanisms of carrier selection.

3.1 The common problem in extending the two mechanisms of carrier selection: order progressiveness

The order-taking procedures between operators to extend current services to include local calls must be defined in order to take account of the high volumes of local call traffic and therefore to take into account the necessary investments to be made by operators in order to operate on this market, as well as the conditions for implementing these orders on France Telecom's network.

Indeed, the provision of pre-selection and call-by-call selection services including local calls first requires a major and simultaneous increase in the processing capacities of the operators' networks as well as the interconnection capacities established with France Telecom's network. This increase in necessary capacity is proportionate to the increase in volume generated by the inclusion of local calls in their services, which might be multiplied by 2 or 3 depending on the types of targeted client base and the carrier selection mechanisms used. The implementation of these capacities supposes, therefore, that competing operators make major investments and have a good knowledge of the consumption profiles of clients, and that France Telecom deliver major quantities of interconnection resources in a given period.

In this respect, the order-taking methods for extending carrier selection to local calls cannot be similar to those defined for the extension of carrier selection to fixed-to-mobile calls, that is a simultaneous extension for all operators across the country.

Moreover, the economic conditions of intervention on the local call routing market, in particular the financial conditions of interconnection with France Telecom's network, favour a network deployment model based on connection to France Telecom subscriber switches, which will increase even more the level of investments operators will have to make in order to act on this market and the diversity of interconnection resources that France Telecom will have to deliver.

Therefore, it appears necessary that we define order-taking procedures between operators authorising a certain progressiveness corresponding to the stages of development of their network and of interconnection with France Telecom's network.

3.2 Order-taking procedure for the extension of current pre-selections to local calls

During the preparatory meeting held on 8 February 2001, France Telecom suggested using an order-taking procedure in which current pre-selections would be extended to include the selection of local calls on request by each operator for each currently pre-selected client.

Some other operators wish to benefit from other options, such as the possibility of simultaneous extension for all clients of a pre-selection operator on request, or the possibility of extension by transit area or local exchange area on request by an operator.

ART departments consider that only a client-by-client order procedure is compatible with the need to obtain the prior authorisation of current clients for the extension of their services to local calls.

It is important to note that the choice of such a procedure involves:
- the possibility for the competing operators to progressively extend current pre-selections by transmitting the concerned subscriber numbers
- maintaining the local call sorting function for pre-selection as it currently exists, and which would be adapted in order to remove it subscriber by subscriber on request by operators

Still, such a procedure requires that France Telecom's processing conditions for orders placed by the operators, in particular for the opening date of orders and activation lead times, be identified prior to their implementation.

Players are invited to comment on this point and to state, in particular, whether the processing times already planned for new pre-selection orders should be maintained for extension orders.

Proposal: Pre-selection operators can request that previously activated pre-selections be extended for each line or group of pre-selected lines in order to route local call within local exchanges.

3.3 Consequences on the scope of new pre-selection orders

The players decided that the extension of pre-selection and call-by-call selection to local calls would be optional, on request by each operator.

This possibility will allow operators to decide whether they want to operate on the local call market in addition to other markets and when they wish to do so.

In the case of pre-selection, and following the introduction of the extension of carrier selection to local calls, this will mean that the operators will continue to be able to place pre-selection orders for only national, international and fixed-to-mobile calls.

3.4 Order-taking procedure between operators for the extension of call-by-call selection to local calls

The definition of order-taking procedures for the extension of carrier selection to local calls for call-by-call selection requires a different analysis than that done for pre-selection.

Indeed, unlike pre-selection, the call-by-call selection mechanism is not based on an activation of a service for each subscriber line since the service is made accessible for all France Telecom clients in a transit area or local exchange area according to the level of interconnection in the France Telecom network hierarchy to which the beneficiary is interconnected.

Therefore, the extension of call-by-call carrier selection to local calls for a given operator can only be done globally, for the clients belonging to a given transit area or local exchange area to which this operator is interconnected.

Therefore, in this case, the operators will be able to place orders to extend call-by-call carrier selection to local calls for hierarchical zones on the France Telecom network and not client by client.

Thus, it is important to define the minimum size of these zones based on the progressiveness of the orders required by the operators to operate on this market and on the technical conditions and implementation costs for this type of zone in France Telecom's network.

In this respect, an analysis of the comments received on the working document published on 6 March 2001 shows that the minimum size of the zones for orders for the extension of carrier selection to local calls should be the transit area on France Telecom's network.

Proposal: Operators may request that the scope of services accessible via call-by-call selection be extended to calls within local exchanges for each transit area to which they are interconnected.

4. Date of introduction

ART considers it necessary that the date for orders to extend call-by-call carrier selection and pre-selection to local calls be defined in accordance with the commitment made by France Telecom in its interconnection catalogue. This means that it will correspond with the effective implementation of the corresponding interconnection offer "during the fourth quarter of 2001".

It appears in this respect that, since the publication of its interconnection catalogue on 27 November 2000, France Telecom has had sufficient time to prepare to adapt its network and information to implement call-by-call carrier selection and pre-selection for local calls within the established timetable.

It also appears necessary that this condition be respected given the investments that carriers have already made or planned for the commercial rollout of services including local call routing, in accordance with the schedule set by France Telecom in its interconnection catalogue.

Proposal: The extension of call-by-call carrier selection to local calls must be made available on a yet-to-be-determined date during the fourth quarter 2001.

5. Number of pre-selectable operators

One of the questions asked in the working document sent to players on 6 March dealt with the advisability of changing the method that has been used since the introduction of pre-selection was introduced (in which just one operator can be pre-selected by each client) when extending carrier selection to local calls. Discussions held on this subject have shown that it is not desirable to change this method for this extension.

In particular, should subscribers be permitted to subscribe to a second operator for pre-selection of local calls alone, only a very small number of operators using this possibility would be likely to propose commercial offers.

Moreover, it is important to emphasise that the introduction of call-by-call carrier selection for local calls will allow those consumers using it to choose a carrier to route their local calls on a call-by-call basis.

Thus, an examination of the conditions of changing to a new method will require more in-depth discussion with all players under a review of the conditions of implementing pre-selection. This will allow us to examine with care, in particular, the possible options as well as the conditions and cost of their implementation on France Telecom's network.

Proposal: At this stage, the extension of carrier selection to local calls will not modify the number of operators which can be pre-selected by each client (currently limited to one).

6. Costs and tariffs of interconnection services

The extension of carrier selection to local calls may cause the price of certain interconnection services to be changed. In this chapter, we review the pertinent costs currently included in pre-selection tariffs, we analyse the possible inclusion of a deficit in the access account and we request comments on changes to the pricing of interconnection services for carrier selection.

4.1 The pertinent costs of pre-selection

Currently, France Telecom invoices its pre-selection services according to two tariffs based on an analysis of costs: the first is invoiced by operator and by transit area, the second upon activation of each line. ART set up a working group in order to define the pertinent costs to be included in the pre-selection tariffs for 1999 prior to the rollout of this service in 2000.

France Telecom used the cost categories identified by this group to determine its pre-selection tariffs.

a) Pre-selection implementation tariff by operator and costs

These costs include only those initial costs borne by France Telecom when an operator requests pre-selection, that is, those costs related to the information system and more specifically to updating the "applications catalogue" i.e. the coding of the new operator in the tables of all affected applications.

It is calculated based on personnel costs and on a coefficient of indirect and common costs. The tariff for pre-selection by carrier covers these costs.

b) The costs of activating a pre-selection line covered in the pre-selection by line tariff

The following costs are included:

- Costs of applications specific to pre-selection: these are those costs related to the development and use of applications which receive and record in electronic format requests for pre-selection sent by the operators, and which then send them to decentralised applications at the regional divisions. These applications also prepare reports for third party operators.

- Costs of developments specific to pre-selection and operating costs of applications related to the subscriber line: the applications related to the subscriber line are used by a number of services such as call forwarding, unlisted numbers and pre-selection. The costs (development, operation and deployment of computer applications) are divided among the various services on a pro rata basis of one network component, the transaction. The transaction unit cost is assigned to the activation of the subscriber line, which represents one transaction.

- Manual processing costs for activation: these costs are for necessary manual actions. In the case of grouped analogue or digital lines: manual entry or man-machine relations for entering the memory position of switches to activate pre-selection.

- Administration costs: these are the costs of the pre-selection management entity which provides after-sales services to manage incidents and complaints related to pre-selection.

The first two types of costs—which are investment costs—are amortised on the basis of an expected volume of lines for which the subscriber has chosen pre-selection.

c) Costs not recovered by the pre-selection tariffs

These are primarily:
- upgrading of switches. These costs are general network costs and are therefore paid by all operators including France Telecom. These are not included in the pre-selection tariffs.
- adaptation of the FOR operator invoicing tool as well as the use of FOR for pre-selection. These costs are specific interconnection costs in general and are not covered by pre-selection tariffs.

4.2 Possible inclusion of a deficit on the access account

France Telecom considers that the extension of carrier selection to local calls will create a new situation in which the lines of subscribers using the services of another operators to route their local calls will present a deficit: the revenues from access will not cover the costs. Therefore, France Telecom asks that it be compensated for this deficit which, in its opinion, creates a competitive imbalance.

In the case of pre-selection, France Telecom—which opposes the joint introduction of call-by-call selection—sees only one option: compensation in the form of a revised pre-selection tariff.

ART reminds France Telecom that from a regulatory point of view, interconnection tariffs cover only the usage costs of France Telecom's general network and cannot be used to cover the costs of its access network.

Incidentally, it is inevitable that the extension of carrier selection to local calls (which is simply an evolution of the telecommunications market being opened to competition in France) will have an impact on the incumbent operator's revenues. This evolution is no different in implementing carrier selection than for other types of calls.

Still, France Telecom emphasises that unlike the opening of other markets to competition, the loss of local call revenues will hurt it directly since certain lines will become unprofitable and that, as a result, this question cannot been considered in comparable terms.

ART considers that this effect will be measured through the cost of universal service, which does measure the economic cost of France Telecom's unprofitable activities. Thus, the loss of revenues related to the opening to competition of local calls will likely have an impact on the geographic component of universal service whose cost is calculated in two ways: by comparing the revenues of geographic zones to the corresponding costs to France Telecom in order to identify unprofitable zones; then by comparing the subscriber revenues of profitable zones to costs in order to identify unprofitable subscribers in these zones. The net cost of unprofitable zones and unprofitable subscribers in profitable zones is borne by the community of operators through the universal service fund.

The opening of the local call market to competition could therefore cause an increase in the cost of universal service because of lost revenues and the increase in the number of unprofitable France Telecom subscribers. This effect is not specific to the opening of carrier selection to local calls: the decline in prices in general, in particular for long distance calls, also contributes to increase the cost of universal service.

4.3 Including the extension of carrier selection in interconnection tariffs

Given the planned processes, a number of circumstances are possible:

The extension of currently provided services:

- For call-by-call selection, at this stage, it is planned transit area by transit area. It will be necessary to determine whether this extension will create costs for France Telecom; in this case, the means of recovering these costs will have to be evaluated

- For pre-selection, it is planned at this stage subscriber by subscriber

New pre-selection orders with two options:
- activation of pre-selection for long distance calls, to international and fixed-to-mobile
- activation of pre-selection for all local and long distance calls, to international and fixed-to-mobile

These circumstances could result in different tariffs based on underlying costs; the current cost list will be adapted accordingly.

Operators are invited to share their comments on the impact of extending carrier selection to local calls on interconnection tariffs as well as on the current rules of pertinence.

Annexes: reference texts

Annexe 1: Article D. 99-16 of the Post and Telecommunications Code as amended by decree no. 99-922 dated 27 October 1999 regarding carrier pre-selection

Annexe 2: Decision no. 99-1077 of Autorité de régulation des télécommunications dated 8 December 1999 specifying the conditions and timetable for the implementation of call-by-call carrier selection and pre-selection

Annexe 3: Decision no.97-345 of Autorité de régulation des télécommunications dated 17 October 1997 regarding the definition of local exchanges

Annex 1

Article D. 99-16 of the Post and Telecommunications Code as amended by decree no. 99-922 dated 27 October 1999 regarding carrier pre-selection

Art. D. 99-16. - The interconnection catalogues of these operators [powerful operators] must include at least the following services and elements, for the operators of the public network:

- switched traffic routing services, offering technical access and pricing options which permit the implementation of unbundling of the offer as defined by article D. 99-15
- additional and advanced services and functionalities (including access to intelligent network resources needed for interconnection or optimal traffic routing) and related contractual means, according to a list previously established by Autorité de régulation des télécommunications, following consultation of the interconnection committee
- means of implementing number portability and carrier selection in order to ensure equal access
- description of all physical interconnection points and access conditions to these points when the third party operator provides the interconnection link
- technical and pricing conditions for connecting links to interconnection points of the third party operator and, should the third party operator wish to provide this link, the technical and pricing conditions of physical and logical access to the interconnection points of these operators
- a complete description of the proposed interconnection interfaces in the interconnection catalogue, and in particular the signalling protocol used for these interfaces, and its conditions of implementation
- jointing services for leased links

In addition to call-by-call selection, the means of implementation of carrier selection allowing the clients of these operators to access switched services of any interconnected operator via pre-selection and to avoid any pre-selection choice by dialling a short prefix on a call-by-call basis.

In application of article L. 36-6, Autorité de régulation des télécommunications identifies the services concerned by the previous paragraph as well as the conditions and the timetable for implementing call-by-call carrier selection and pre-selection.

The catalogues of these operators for the supply of public telephone service must include the abovementioned services and elements which take into account the rights and obligations specific to these suppliers.

Following consultation of the interconnection committee, Autorité de régulation des télécommunications may request that one of these operators revise its catalogue, and in particular that it add or modify services listed in its catalogue, whenever these additions or modifications are justified with regard to the implementation of the principles of non-discrimination and cost-oriented interconnection tariffs as well as the needs of the community of operators.

Annex 2

Decision no. 99-1077 of Autorité de régulation des télécommunications dated 8 December 1999 specifying the conditions and timetable for the implementation of call-by-call carrier selection and pre-selection

Autorité de régulation des télécommunications, having regard to

Directive 98/61/EC of the European Parliament and of the Council dated 24 September 1998 amending directive 97/33/EC regarding number portability and carrier pre-selection

The Post and Telecommunications Code, and in particular article D.99-16 in its version of decree no. 99-922 dated 27 October 1999

Decision no. 97-345 of Autorité de régulation des télécommunications dated 17 October 1997 regarding the definition of local exchanges, approved by the order dated 12 December 1997

Decision no. 99-940 of Autorité de régulation des télécommunications dated 9 June1999 adopting guidelines regarding the operational procedures of pre-selection

The Commission consultative des réseaux et services de télécommunications having been consulted on 25 November 1999

The Commission consultative des radiocommunications having been consulted on 25 November 1999

And after having deliberated on 8 December 1999

For the following reasons:

Pre-selection is a mechanism of carrier selection which must permit simplified access for users to the various networks and telecommunications services and guarantee equivalent numbering formats.

Following its implementation, users may pre-select a carrier, different from its local loop operator, to route their long-distance calls. In these conditions, a 10-digit call beginning with the number 0 will be entrusted to the pre-selected carrier or through pre-selection, to the operator connecting it. The call-by-call selection mechanisms will continue to function and will allow the selection of a different carrier than that which is pre-selected, via a one- or four-digit prefix (E or 16XY).

Decree no. 99-922 dated 27 October 1999 modifying article D. 99-16 of the Post and Telecommunications Code and regarding carrier pre-selection states that the interconnection catalogue of those operators included in the list drafted in application of paragraph 7 of article L.36-7 of the Post and Telecommunications Code must include a pre-selection offer on their network as of 1^st January 2000.

Moreover, this decree states that ART will define the conditions and the timetables for implementing carrier selection and pre-selection, the purpose of this decision.

At this stage, a number of means for applying pre-selection which must be determined have been identified and discussed with sector players, in particular at the interconnection committee.

ART is committed to dealing with these questions according to the objectives set for it by law, and in particular that of monitoring "the exercise to the benefit of users of effective and fair competition between network operators and telecommunications service providers", to "the definition of access conditions to public networks and the interconnection of these networks which guarantee the possibility for all users to freely and equally communicate the conditions of competition", and to "take into account the interest (...) of users in access to services (...)".

• Date of implementation of pre-selection

For 2000, only France Telecom is included in the list established in application of paragraph 7 of article L.36-7 of the Post and Telecommunications Code. The operator has notified ART that, for reasons related to the year 2000 bug, the date of effective implementation of pre-selection on its network would be postponed to 17 January 2000.

• Categories of pre-selectable operators

Decree no. 99-922 dated 27 October 1999 modifying article D. 99-16 of the Post and Telecommunications Code and regarding carrier pre-selection stipulates that "the means of implementation of carrier selection allowing the clients of operators included in the list drafted in application of paragraph 7 of article L.36-7 of the Post and Telecommunications Code to access switched services from any interconnected operator (...)".

ART also notes that any operator authorised in application of article L. 34-1 of the Post and Telecommunications Code may benefit from pre-selection.

• Calls routed by a pre-selected operator or under call-by-call selection

Pre-selection is a carrier selection mechanism just as call-by-call selection via a one- or four-digit prefix (E or 16XY). Therefore, in a concern for coherence, it seems desirable that the conditions of implementation be identical for both mechanisms, in particular as regards the numbers routed by the pre-selected operator.

Today, France Telecom's interconnection offer, approved by decision no. 98-1043 of Autorité de régulation des télécommunications dated 18 December 1998, includes the possibility of selecting the carrier for only international or national calls EZ AB PQ MC DU where Z may have a value between 1 and 5.

ART considers it desirable that carrier selection to mobile numbers be implemented as quickly as possible in order to allow carriers to provide global offers and thereby to meet users' needs, in particular those of small- and medium-sized companies. This mechanism, which has already been implemented in most other European countries, will also make it possible to introduce greater competition in the establishment of "fixed-to-mobile" call tariffs.

Still, the specifications of mobile operator authorisations today contain specific measures which allow these operators to set the price of calls from France Telecom subscribers to mobile phones. Such a method does not seem compatible with the introduction of carrier selection to mobiles which allows each carrier to freely set the price of calls from its clients to mobiles. This is why ART has decided that carrier selection will open to all operators simultaneously upon the application of the modification of its authorisation on these points.

• Number of operators which may be pre-selected on a given line

Another question is the number of operators which may be pre-selected on a given line. France Telecom has indicated that the technical conditions on its network are sufficient to allow pre-selection of two operators on a single telephone line.

A first option would be to allow clients to pre-select several operators on the same line. The advantage would be to allow the pre-selection of different operators according to the type of call. For example, one operator could be pre-selected to route national calls, another for international calls, or one operator could be pre-selected for calls to fixed phones and another for calls to mobiles. Another solution would be, at least initially, to limit the number of operators which can be pre-selected on a given line. This solution would require that the pre-selected operator route or have routed all calls eligible for pre-selection.

One of the main concerns for the introductory phase of pre-selection is to successfully explain this mechanism to as many users as possible and to ensure they accept it. Over the past two years, users have had to adapt to major modifications to numbering: in 1996, the change from 8 to 10-digit numbers; since 1998, the possibility of dialling one- or four-digit prefixes to select the carrier of their choice. As a result, the pre-selection mechanism must be made as simple as possible for users if they are to accept and use it. Complicating the mechanism right from the start could lead to failure with the public. This problem leads us to prefer the second option, in a desire for simplicity and clarity for users during the introductory phase of pre-selection.

Moreover, this option seems the least penalising for operators investing in the deploying a national network. Indeed, these operators, pre-selected in priority to route national calls, would thereby also benefit from other types of calls which are eligible for pre-selection, in particular international traffic, and would therefore obtain maximum return on investments.

As a result, in a concern for simplicity for users and in order to avoid penalising the investments in the deployment of national networks, ART considers it preferable to limit the number of operators which can be pre-selected on a given line to one, at least initially. ART emphasises that users retain the possibility to choose other operators via call-by-call selection.

• Availability of pre-selection and call-by-call selection

Pre-selection and call-by-call selection must be available for all users connected to the network of the operators responsible for implementing it. In particular, the offers of these operators must not make pre-selection or call-by-call selection unavailable for the user.

Moreover, in accordance with decree no. 99-922 dated 27 October 1999 modifying article D.99-16 of the Post and Telecommunications Code and regarding carrier pre-selection, the mechanism put in place by the operators included in the list drafted in application of paragraph 7 of article L.36-7 of the Post and Telecommunications Code must allow the clients of these operators to "eliminate, call by call, any pre-selection choice by dialling a short prefix." In particular, pre-selection client subscribers must be able to select, call by call, the telephone service of the operator to which they are connected.

• Operational procedures

The activation of pre-selection for users requesting it will require that information and order exchange procedures be implemented between operators. The organisation of information exchange between the operators could be quite complex if simple processes are not put in place. In order to allow operators to plan far enough in advance the organisation of processing pre-selection requests, following concerted discussions with all sector operators, ART adopted guidelines regarding the operational procedures for pre-selection, by decision no. 99-490 dated 9 June 1999.

Certain provisions regarding operational procedures, which are particularly important in allowing the implementation of pre-selection under good conditions, are included in this decision.

On the one hand, this means that the pre-selected operator will only be required to send the line number to those operators offering pre-selection after 1^st April 2000 of and, on the other, elements regarding the pre-selection order mechanisms.

Decides:

Article 1 - The mechanisms of pre-selection and call-by-call selection mentioned in article D.99-16 of the Post and Telecommunications Code providing users connected to the network of an operator included in the list established in application of paragraph 7 of article L.36-7 of the Post and Telecommunications Code, with access to the public telephone service provided by any authorised operator in application of article L.34-1 of the Post and Telecommunications Code, and interconnected with the operator offering pre-selection or call-by-call selection:

• for international calls and national calls to numbers in the Z range= 1, 2, 3, 4, 5, subject to the provisions relative to the local exchange
• for calls to numbers in the Z range=6, except for those attributed to operators whose authorisation includes special provisions concerning the establishment of tariffs for calls coming from the public switched telephone network to connected wireless terminals.

Article 2 – Any operator included in the list established in application of paragraph 7 of article L.36-7 of the Post and Telecommunications Code makes accessible its telephone service via call-by-call selection to users connected to its network and having pre-selected another operator.

Article 3 – A user may pre-select just one operator for any given telephone line. The operator pre-selected by a user routes all calls sent to it by the operator to which the user is connected, under the conditions established by article 1 of this decision.

Article 4 – All users connected to the network of an operator included in the list established in application of paragraph 7 of article L.36-7 of the Post and Telecommunications Code benefit from call-by-call selection and pre-selection. However, users having chosen an offer which would restrict their access to the telephone service of the operator to which they are connected may request that they not receive call-by-call selection and pre-selection, under equivalent pricing and contractual conditions.

Article 5 - The operators included in the list established application of paragraph 7 of article L. 36-7 of the Post and Telecommunications Code must comply with:

• until 31 March 2000 inclusive, any request for pre-selection from an operator which might be pre-selected in accordance with article 1 of this decision, upon submission of the number identifying the line, and the first three letters of the surname of the line holder or the SIRET code (corporate identification number) of the line holder, without requiring any other information
• after 1^st April 2000, any request for pre-selection from an operator which might be pre-selected in accordance with article 1 of this decision, upon submission of the number identifying the line without requiring any other information

Article 6 – After 1^st September 2000, in the event of a change in the pre-selected operator for a given telephone line, any operator included in the list established in application of paragraph 7 of article L.36-7 informs the previously pre-selected operator without delay.

Article 7 - The Director General of Autorité de régulation des télécommunications is responsible for executing this decision which, following approval by order of the Secretary of State to Industry, will published in the Journal officiel of the French Republic.

Delivered at Paris, on 8 December 1999

The Chairman

Jean-Michel Hubert

Annex 3

Decision no. 97-345 of Autorité de régulation des télécommunications dated 17 October 1997 regarding the definition of local exchanges

Autorité de régulation des télécommunications, having regard to

The Post and Telecommunications Code and in particular articles L. 34-5 , L. 34-8, L. 36-6 and L. 36-7 7 thereof,

Decree no. 97-188 dated 3 March 1997 regarding interconnection under article L. 34-8 of the Post and Telecommunications Code

Decision no. 97-88 of Autorité de régulation des télécommunications dated 9 April 1997 approving France Telecom's interconnection technical and pricing offer

Decision no. 97-196 of Autorité de régulation des télécommunications dated 16 July 1997 regarding the means of attributing a carrier selection digit

Decision no.97-242 of Autorité de régulation des télécommunications dated 30 July 1997 approving the additions to France Telecom's interconnection technical and pricing offer

Decision no. 97-277 of Autorité de régulation des télécommunications dated 12 September 1997 regarding the attribution of four-digit carrier selection prefixes and the format of calls

Having consulted the interconnection committee and the Commission consultative des réseaux et services de télécommunications on 10 and 11 September 1997, respectively

And after having deliberated on 17 October 1997,

The telecommunications operators deploy networks and offer services on the local loop, long distance or both simultaneously. In many cases, operators wishing to be present on the long distance services market do not immediately deploy a local network on the entire territory and will therefore, not have direct access to all consumers. In order to permit the development of competition on this market, a specific numbering mechanism has been defined allowing consumers to select a long-distance operator which might be different from their local loop operator. In its decisions no. 97-196 dated 16 July 1997 and no. 97-277 dated 12 September 1997, Autorité de régulation des télécommunications set the formats of the numbering sequences. Thus, at 1^st January 1998, numbers for local calls will continue to begin with the number 0, whereas for long distance calls, consumers will be able to replace the number 0 with another digit or precede the number 0 with a four-digit prefix, in order to select a carrier that is not their local loop operator. ART reserved the numbers for selecting long distance operators on 15 September.

In this context, ART considered it necessary that those local loop operators appearing in the list established in application of paragraph 7 of article L. 36-7 of the Post and Telecommunications Code be obliged to propose a call sorting offer in their interconnection catalogue and for the implementation of carrier selection. Thus, the local loop operator will route to the chosen carrier only those calls for called parties located outside the local exchange; it keeps and routes calls within the local exchange, regardless of the numbering sequence dialled by the caller.

This sorting meets a concern for the efficient routing of local calls: it prevents calls from consumers dialling a carrier's access code in error from being sent to the carrier. Without sorting, the carrier would be required to remunerate two interconnections without routing for the call on its network.

The implementation of sorting requires that those calls accessible to long-distance operators be defined. Call sorting does indeed identify the traffic which may be handled by long-distance carriers and defines the local zones within which they may not route traffic.

ART confirms that these provisions, which favour the entry of new entrant carriers, must be implemented on1^st January 1998, in order to allow competition to operate efficiently. ART required that France Telecom introduce the principle of this offer in its interconnection catalogue approved by decision no.97-88 dated 9 April 1997. Call sorting will be indispensable when carrier pre-selection is implemented at a later date.

To date, France Telecom is the only operator subject to the obligations of operators included in the list established application of the 7^th paragraph of article L. 36-7 of the Post and Telecommunications Code. The definition of the call sorting zone has been discussed in depth in recent months, in particular by the interconnection committee, its subcommittees and the Commission Consultative des réseaux and services de télécommunications. This preparatory work has allowed us to identify two options:

• the local exchanges may be fixed zones, such as the technical zones of France Telecom's network or administrative zones. In this case, they partition French territory
• they may be "sliding" zones. In this case, there are several proposals: the expanded local zone as defined by the France Telecom retail pricing catalogue or the zone formed of pricing areas located within a radius of 50 kilometres from the caller.

ART is committed to a clear and understandable definition for consumers. It has chosen a local exchange based on the administrative division of the national territory, i.e. the département, including for overseas départements. A specific solution has been chosen for Ile-de-France and Corsica for economic and technical reasons.

For Ile-de-France, the local exchanges are:

• Paris, Val-de-Marne, Hauts-de-Seine, Seine-Saint-Denis
• Val-d'Oise
• Yvelines
• Essonne
• Seine-et-Marne

For Corsica, the local exchange is composed of Haute-Corse and Corse-du-Sud.

Local exchanges based on départements offer a number of advantages:

• they are easy for consumers to identify
• they are stable, which provides investors with the visibility they need
• they are independent of operators' pricing and technical choices

ART will evaluate the impact of this definition of the local exchange between now and the end of 1999.

On 1^st January 1998France Telecom will have to implement call sorting in its network as defined by this decision. Thus, as of this date, a call made within a département will be routed by France Telecom, even if the calling subscriber has selected another carrier; when the call exits the caller's département and the caller has selected a carrier, the call will be sent by France Telecom to this carrier.

Still, the reality of France Telecom's network which pre-existed the definition of sorting zones will mean that the borders of départements will not be perfectly respected in some marginal cases: for call sorting, certain France Telecom subscribers located in one département will be treated as if they were located in the neighbouring département. According to information sent by France Telecom to ART, approximately 1% of subscribers are concerned.

In order to allow the implementation of this entire decision, France Telecom will submit to ART the description of local exchanges for its network, in terms of numbering, in particular identifying the number blocks which are an exception.

Decides:

Article 1 – The interconnection technical and pricing offer published in application of article L.34-8 II of the Post and Telecommunications Code by the operators appearing in the list established in application of the 7^th paragraph of article L.36-7 of said code or by that mentioned in article 2 of the abovementioned decree no. 97-188 dated 3 March 1997 includes call sorting for the implementation of carrier selection.

Sorting is done under the following conditions:

• the concerned powerful operator maintains and provides routing of calls to subscribers located within the same local exchange as the caller, regardless of whether the caller has selected a different carrier
• this operator sends to the carrier selected by the caller those calls to subscribers located in another local exchange than the caller's exchange

Article 2 – Except for Ile-de-France and Corsica, the local exchanges, as defined in article 1 of this decision, correspond to metropolitan and overseas départements.

For Ile-de-France, the local exchanges are:

• Paris, Val-de-Marne, Hauts-de-Seine, Seine-Saint-Denis
• Val-d'Oise
• Yvelines
• Essonne
• Seine-et-Marne

For Corsica, the local exchange is composed of Haute-Corse and Corse-du-Sud.

Article 3 – France Telecom will submit to ART the description of local exchanges for its network, in terms of numbering, in particular identifying the number blocks which are an exception.

Article 4- The Chairman of Autorité de régulation des télécommunications is responsible for executing this decision which, following approval by order of the Secretary of State to Industry, will published in the Journal official of the French Republic.

Delivered at Paris, on 17 October 1997

Jean-Michel Hubert