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Broadband Access
French Minister Hints At Broadband Investment Protection
Remarks Welcomed by France Telecom’s CEO
by Ken Wieland
What should the role of government be in developing the
broadband market? Francois Loos, France’s ‘minister
delegate’ for industry, broached this subject -- albeit in
abstract terms -- at the opening ceremony of the Broadband
World Forum event today, held in Paris. “We believe that the
investor should be protected,” he said. “It can be a
complicated thing to do, with many hurdles, but the
entrepreneur needs to be protected by a legal framework.”
It was a sentiment that Didier Lombard, CEO of the France
Telecom group, no doubt welcomed. Following the government
minister onto the podium, he described his own views and
those of Loos as ‘in harmony.’
Tellingly, however, Lombard revealed that he had never even
spoken to Loos before. Considering that both men have been
in their present jobs for well over a year, such lack of
communication might seem surprising, especially as the
stakes involved are so high.
Like other incumbents in Europe, France Telecom is looking
more closely at higher access technologies, such as fibre-to-
the-node and fibre-to-the-home. And like other incumbents,
it wants some protection for its investment. It doesn’t want
competitors buying that higher access capability at wholesale
prices set by the regulator.
For the French government’s part, it has set out an ambitious
target of connecting four million French households with fibre
by 2012. The biggest driver for FTTH in France, however, has
come from local authorities and not France Telecom.
According to Loos, over one billion Euros has been spent on
fibre connections by local authorities over the last couple of
years, with over 30,000km of fibre-optic cable already laid.
It is the French government’s intention to stimulate
broadband development in the future through direct
intervention. That, says Loos, means a continued focus on
setting up R&D ‘clusters.’ Networks have already been set up
in Paris, Marseilles and Brittany between local firms who are
doing research in the same field. “Over 50 percent of these
clusters,” says Loos, “are in the ICT sector.”
Loos also said that the French government would be
supporting two standards for mobile TV in parallel: the Nokia-
backed DVB-H standard, and a satellite solution backed by
Alcatel. What form this support would take, Loos did not say.
Arguably, the French government can take a large slice of
credit for the fast-paced development of the broadband
market in France. When it came into office in 2002, there
were 600,000 ADSL subscribers and the French government
said at the time that it’s aim was to have ten million
broadband subscribers by the end of 2007. That milestone
was passed a couple of months ago.
“One of the main reasons for that growth was to force France
Telecom into making available unbundled products,” says
Loos. “It may have seemed a bit harsh but it worked. It
increased competition.”
Such a model is one that Lombard, clearly, doesn’t want to
see implemented for the next round of broadband access
investment. “That model worked fine for then but now we
must find a stable [regulatory] framework,” he says. “At the
moment, the reforming of legislation is moving too slow.
Investors, understandably, need to know where there money
is going. We need a strong telecom industry.”
Lombard’s definition of a ‘strong telecom industry’ no doubt
involves a strong France Telecom. He added, ominously, that
France Telecom would be ‘ready to go to war’ to protect the
interests of shareholders.
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