France Telecom on hook over high fees

Date: 21/06/01

By Peter Chapman

COMPETITORS to France Telecom are calling for EU ministers to slash the amount they have to pay the former monopoly to support 'universal services' to remote rural areas and the poor.

The demand from the French Association of Private Telecommunication Operators (AFOPT) comes as telecom ministers prepare to debate a draft directive next Wednesday (27 June) which says member states should have the right to decide how universal services are funded.

But AFOPT says the new rules should not tolerate over-charging from countries such as France - which channels €55 million a year for universal services from operators to France Telecom to fulfil the obligation.

The lobby has complained that Paris has granted France Telecom a de-facto monopoly to provide universal services because it says it is the only company able to offer services across the entire French territory, including the Caribbean and Pacific.

But rivals are fighting for the right to offer universal service on an area-by-area basis.

The EU grafted universal service obligations onto telecoms liberalisation laws launched in 1998. They were meant to ensure that there was a minimum level of service regardless of whether or not it would be profitable for firms to offer them.

But some countries decided not set up funds or to subsidise universal service because they saw the costs as negligible.

Competitors to France Telecom are calling for EU ministers to slash the amount they have to pay the former monopoly to support 'universal services' to remote rural areas and the poor.