ARCEP regulates fiber local loop to stimulate FTTH investment in France

Last week, Jean-Ludovic Silicani, the new president of ARCEP, held a press conference and announced several propositions to stimulate commercial investment in FTTH deployment in France. These propositions were put together after year of tense negotiations between ARCEP, the operators and local collectives. They will be issued for public consultation in July and are expected to be adopted in the fall. If Sarkozy’s government is to meet its goal of at least 4 million households that are fiber-enabled by 2012, the deployment has to start as soon as possible.

Technical choices, GPON versus P2P Ethernet, are not neutral

In September 2006, Iliad-Free stated that it would invest €1 billion into FTTH and reach 4 million subscribers. At that time, no one except a small city called Pau in the south west of France was seriously making investments in FTTH. Iliad-Free positioned itself as an innovator by offering a very low price for a FTTH subscription: €29.95 per month, same as its triple play DSL access today.

France Telecom, which has a huge network mostly built with the taxpayer money when it was a government-owned monopoly, has been reluctant to move ahead. It pretended the technology was not yet ready, that user demand did not exist, that there were no services taking advantage of FTTH speeds. However, it began to upgrade its networks quietly in order to preserve its dominant position and to take advantage of it, especially when dealing with local territories. This move has been seen by many as a way to recreate its old monopoly. France Telecom made a technological choice: GPON (a telco originated technology), allowing up to 64 or 128 households to passively share the same fiber point of access (splitter). Iliad-Free has made the opposite choice: P2P Active Ethernet (an enterprise networks’ originated technology) where the bandwidth is symmetric and carried by one fiber up and one separate fiber down for each customer, giving more flexibility for speed upgrades in the long term. These opposite choices ended up having a big impact on the final part of the fiber local loop, because GPON needs less fiber threads than P2P Ethernet. GPON is said to be a mono-fiber topology as P2P Ethernet is said to be a multi-fiber topology.

More than one year of negotiation to keep the fiber local loop open

In accordance with EU regulations, ARCEP ruled last year that the French fiber local loop must be open and shared between operators to give the customer the ability to choose and switch easily using the same infrastructure in a building. ARCEP also required that the installation of fiber in an apartment building should be made by only one operator, at no charge for the end users or the “co-propriété” (apartment or home owners’ association). The French “Digital Plan” was prepared last year and made enforceable in mid-2008. ARCEP forced France Telecom to offer its existing empty ducts for lease to other operators at reasonable and published prices.

But it became clear no operator was willing to go ahead until the practical issues of the final part of the fiber local loop were cleared, and France Telecom was not disclosing the complete maps of its existing network for “security reasons”. France Telecom, Iliad-Free and SFR had almost stopped their investments in fiber infrastructure, but they were still discussing FTTH. Suddenly, in the city of Paris, the sewers became a theater of intense activity with everyone was putting its own fiber underground to be able to light it up, in anticipation of ARCEP’s decision on what was to be done at the building level. The sewer system in Paris is easily accessible, reaching every building in the city. It is a fantastic opportunity to put fiber at very low cost. No open trenches are necessary. It took ARCEP more than a year to bring all the operators to the table and force them to agree to share the “the last mile”, especially the part in the buildings.

Splitting France into two zones, profit and non-profit

To reach such an agreement, ARCEP split the problem in two parts and decided to create a fiber digital divide in France, at least temporarily. It created a category for the high population density areas, which represent about the 148 largest cities in France, a total of more than 5 million households with a large majority of multiple dwelling units, most of it based in Paris. The proposed ruling, to become law by fall, is a fairly complex set of dispositions aimed at facilitating rapid deployment of shared fiber in the buildings by any operator and easing formal cooperation between them. It supposedly solves the problems raised by the need to build, interconnect and maintain GPON and P2P Ethernet on a mutualized infrastructure in the building. For each building, it sets a formal entity called “building operator” to be responsible for the installation and maintenance of the infrastructure, allowing equal access to all operators regarding their needs and technology. The “building operator” will be chosen by the “co-propriété” or the building owner and its duties are described in a detailed contract. It may be anyone able to fulfill this task but it is believed that the existing operators will do it. The dispositions especially allow the installation of extra fiber in the buildings for those operators needing it (P2P Ethernet, for example).

€3 to €4 billion investment for 5 million households

In a recent editorial, published in Le Figaro just before ARCEP released its propositions, Didier Lombard CEO of France Telecom said that the chosen solution allowing multi-fiber in the building at the demand of some operators or users is 40% more expansive that his preferred approach.” Investing several fiber threads in a household instead of one only may deprive more than 5 million French households of the benefits of fiber,” said Lombard. In a later interview, Silicani estimates the total investment cost for operators to be around €3 to €4 billion (inside and outside the buildings in these high density areas). He says: “Installing several fibers implies an extra cost of 5% of the total investment, which will be supported by the operator asking for it (Iliad or SFR in some cases). This infrastructure is designed to last for fifty years. Depriving people of their freedom to choose among the operators for such a small cost difference would be totally unrealistic. The general interest is not the interest of one operator. It is in the interest of France Telecom to invest in fiber. It already has put fiber close to buildings giving it the ability to serve millions of households.”

Planning for fiber deployment in the “forgotten France” to start soon

Several mayors and representatives from rural areas in France immediately raised concerns about less densely populated areas, which are not included in ARCEP’s most recent propositions. Pierre Morel à l’Huissier Deputy of Lozère, who has been trying to create a federation of rural areas, publicly asked the government to set up a compensation fund to help areas that are less profitable for an operator to invest in fiber networks. His proposal was followed by a bill to be submitted by Xavier Pintat, senator of Gironde, in the July session at the French Senate to facilitate the planning, organization and financing of fiber infrastructure in low density areas (knowing the operators will not rush to do it). In its propositions, ARCEP mentions a second phase of study and negotiations with operators, local collectives and territories, and the CDC (Caisse des Dépots et Consignations), a state owned Bank focused on financing public infrastructures and services. This phase should start with a meeting in September. Local collectives fear they may have to build the fiber infrastructure themselves. The summer will be a busy one in the French countryside.

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  1. On behalf of Webs of Gévaudan (, an association for the promotion of high speed Lozère I welcome these initiatives very high speed while regretting that no provision is provided for rural areas. we would go to an Internet cities and Internet fields? We want a single “internet citizen”! We always ask for specific equalization for rural areas abandoned by the operators for obvious reasons of (non) profitability. We are campaigning for the gradual establishment of a local loop fiber optic service, neutral and open to competition. We believe today, with the member lozérien MP Pierre Morel and Senator of the Gironde Xavier Pintat preparing a bill that it is time to apply for a broad parliamentary debate on this vital subject for our campaigns! It must be, in our opinion, one of the first concerns of Michel Mercier, Minister of Rural and Regional Planning! Because “innovation”, to innovate … the campaign where it is known, the contact with nature fosters creativity! The audacity of real change is to give each citizen a digital independent of physical place.