MuniWireless

Orange and SFR, the two major broadband operators in France agreed to share the fiber optic lines going into apartment and office buildings. In a letter of intent signed by the operators, they stated that the “co-owner associations” of a multi-tenant building or their representatives would be able to choose the operator to install the fiber in the building. The installer would open the fiber to other operators requesting the access to the building, but they would have to pay a rental fee and make the inter-connection work at their cost. Through the agreement, any tenant in a building will be able to choose the operator of his choice. The companies assert that this agreement complies with the recent Law for Modernization of the Economy (LME) passed by the French Parliament on 4 August 2008. Installing only one fiber line to be shared in a building will save users a lot of money and reduce the hassle “co-owner associations”.

Iliad-Free objects on competitive grounds

Immediately after the SFR-Orange announcement, Iliad-Free, the third broadband operator (in terms of revenues), but second behind Orange in terms of subscribers, issued a press release denouncing the deal:

“This agreement offers no guaranty for open competition and free access to different operators and does not comply with the law. It is against the spirit of the previous discussions which have been held between operators.”

Maxime Lombardini, the CEO of Free insists that the LME requires interconnection points to be outside buildings. UFC, a large user group in France said that the SFR-Orange agreement promotes an interconnection point “at the building or very close to the building according to pragmatic operational criteria” which gives Orange an unfair advantage over Free.

In fact for Iliad-Free, the position of the interconnection points will have an immediate effect on the number of NRO (optical central offices) they have to build. “Based on the first deployment we had in Paris, the number of NROs may double from 30 initially to 60 or even 70, depending on the position of the interconnection points,” said Olivier de Baillenx, responsible for Institutional Relations for Free. Orange already owns a lot of facilities and cabinets in Paris for its existing telephony network. Building cabinets will be very expensive for a newcomer. Another reason is more technical: Free is deploying Point-to-Point Ethernet and Orange is deploying Point-to-multipoint GPon. Free needs to put 2 fiber threads in the buildings, one for upstream and another for downstream, which is not the case for GPON.

ARCEP alerted problem of interconnection

Recently in a conference in Paris, Eric Besson, State Secretary for the digital economy mentioned that the discussions between operators were difficult, but that ARCEP had helped to bring them all together. He said he would meet the three operators at the end of October and ask ARCEP to intervene if no global agreement can be found on this controversial connecting point dispute. Frank Esser, CEO of SFR and Lombardini said they are still negotiating and will be open to ARCEP’s propositions. Orange made no comment.