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Opinion N ° 2006 - 0726 Of The Regulatory Authority For Electronic Communications And Posts Dated September 12, 2006 Relating To The Application Of The Company Erenis Propose A Tariff Reduction In Accordance With Article R. 20-34 (Ii)...

Original Language Title: Avis n° 2006-0726 de l'Autorité de régulation des communications électroniques et des postes en date du 12 septembre 2006 relatif à la demande de la société Erenis de proposer une réduction tarifaire en application de l'article R. 20-34 (II)...

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JORF n°266 of 17 November 2006
text No. 60



Notice No. 2006-0726 of the Authority for the Regulation of Electronic Communications and Positions dated 12 September 2006 on the application of Erenis to propose a tariff reduction pursuant to Article R. 20-34 (II) of the Post and Electronic Communications Code

NOR: ARTE0600159V ELI: Not available


The Autorité de régulation des communications électronique et des postes,
Considering the post and electronic communications code, including articles L. 35 to L. 35-3, R. 20-31, R. 20-34, R. 20-39 to R. 20-44;
In view of the Minister's Order for Industry of 20 April 2006, setting the amount of the telephone rate reduction for certain categories of persons under the universal electronic communications service for the year 2006;
In view of the letter from Erenis, sent jointly to the Authority and the Minister, received on 18 August 2006 to obtain the approval of the Minister for Electronic Communications, after the advice of the Authority, to propose social tariffs pursuant to section R. 20-34 of the Post and Electronic Communications Code;
Having regard to the AMF's letter to Erenis, dated 30 August 2006, concerning a request for further information on the telephone service offered by the said company;
Considering the response elements transmitted by Erenis by faxes recorded on 5, 8 and 11 September 2006 respectively;
After deliberating on 12 September 2006,


I. - Applicable legislative and regulatory provisions


Section L. 35-1 of the Post and Electronic Communications Code provides that the universal electronic communications service "is provided (by its designated service provider(s) under tariff and technical conditions taking into account the specific difficulties encountered in accessing telephone service by certain categories of persons due in particular to their level of income or disability." According to Article L. 35-3, other operators that the designated provider of the universal service also have the opportunity to offer to their customers such social rates, specifically referred to as "universal service services".
In accordance with section I R. 20-34, these social tariffs must result in a reduction in the telephone bill of eligible customers ("individuals who are entitled to the minimum income of insertion or receive the specific solidarity allowance or allowance for disabled adults"), below referred to as entitled to the "single" social rate.
The reduction of the telephone bill must be increased by 4 euros excluding taxes per month for certain eligible customers ("the war invalids having the benefit of articles L. 16 and L. 18 of the Code of Military Disability Pensions and the victims of the war whose additional impairments are assessed to 10% for the calculation of the pension supplement provided for in article L. 16 of that Code, the blind beneficiaries of article L. 18
This same article provides that operators offering their customers such social tariffs benefit from compensation paid by the universal service fund equal to the net cost generated by this tariff offer.
The operator who wishes to propose a offer of social tariffs and thus to benefit from the compensation of the universal service fund must follow the procedure provided for in II of the same article giving rise to the opinion of the Authority.


II. - At the request of the company Erenis


Erenis, on 18 August 2006, simultaneously sent to the Minister for Electronic Communications and to the Electronic Communications and Post Control Authority, a request for approval in order to be able to propose to its subscribers a reduction in their telephone bill, as part of article R. 20-34 of the Post and Electronic Communications Code. Such an offer would allow Erenis to benefit from compensation from the universal service fund, in accordance with article R. 20-34, paragraph I.
The offer of social fares of Erenis would consist of a tariff reduction for the "simple" social fare of 3,26 euros excluding taxes per month compared to the price of the basic subscription, an amount of 4,10 euros excluding taxes per month. According to Yerenis, this offer could come into force from the date of receipt of the notice of approval by the Minister. However, additional deadlines are to be expected for operational implementation in view of the involvement of various stakeholders in the process (social organizations, a provider charged by the operators of the management of the tariff reduction system).


III. - On due characteristics
the provision of social tariffs


Section L. 32 of the Post and Electronic Communications Code defines telephone service to the public as "commercial operation for the public of direct transfer of voice in real time between fixed or mobile users". For example, like any electronic communications operator, heard as an operator of open-ended electronic communications networks or as a provider of electronic communications services to the public, Erenis is required to deliver emergency calls free of charge.
In addition, with respect to the provisions mentioned above in articles L. 35-1 and L. 35-3 of the Code, a telephone service to the public must, in order to be eligible for social tariffs, have specific characteristics of universal service.
Also, the service proposed by Erenis, to be eligible for social tariffs, must include:
- respect for a minimum quality of service and the provision of indicators to evaluate it;
- an affordable rate;
- the possibility of accessing the low-speed internet.


IV. - On the analysis carried out by the Autorité
of the telephone service offered by Erenis
IV-1. Brief presentation of the activity of Yerenis


Erenis, a company created in 2002, is reported to ARCEP as an electronic communications, open-to-public network and telephone service provider since October 2003.
The telephone service offer of Erenis is now available exclusively in Paris and in its close crown and is gradually deployed in other geographic areas. The list of geographic areas where Erenis is available is available on the Erenis website (www.erenis.fr) or from its customer service, domicilated 139, boulevard de Sébastopol, 75002 Paris.
In terms of the technical characteristics of the service, Erenis deploys a network of optical fibers, independent of that of France Télécom, to directly connect certain buildings in Paris and its close suburbs thanks to VDSL 1 which allows to offer its subscribers a flow of 50 Mbps. In addition, the capacity of the Erenis network allows to simultaneously broadcast simple video streams and HDTV video streams.


IV-2. On the affordable character of the tariff


The AMF analyzed the affordableness of Yerenis's rates as part of its fixed telephone offer, regardless of all other options subscribed. The benefits taken into account include file opening fees, connection fees, the amount of the subscription and the rates of communications charged for the duration.
The AMF noted, as part of its analysis, that Yerenis offered to its subscribers free of charge the opening and connection fees during the subscription of the telephone subscription. In addition, the following free services are offered:
- detailed invoice;
- call transfer;
- three conversation;
- reminder of occupation;
- restriction of calls on appeals (international, national, mobile, and "special" numbers implementing mechanisms for the final recipient of the communication or partially paid by the latter);
- total restriction of calls;
- inscription to the "red" list and the possibility for the subscriber to make its partial or complete coordinates appear free of charge at the directory;
- upon request of the subscriber: voice mail services;
- upon request of the subscriber: the permanent secret mode.
In addition, the AMF noted that subscription to certain pay options (e.g. "accomplice numbers") would allow for additional reductions.
In its analysis of the affordability of these universal service rates, the Autorité has relied on the elements it has available to judge the same services offered by France Télécom - an operator currently providing the universal service - under L. 35-2 of the postal and electronic communications code. In particular, the Autorité has, for its calculations, retained average consumption profiles of residential subscribers of this operator for telephone service.
At the end of its analysis, the Autorité concludes that the fixed telephone rates proposed by Erenis are affordable.


IV-3. Respect for other obligations


With respect to the other obligations listed in an operator's terms of reference, the Autorité notes:
- that Erenis is committed to meeting a minimum quality of service and to providing the indicators to evaluate it; However, given the youth of society, it was not possible to assess the quality of service currently issued by Yerenis; also, without prejudice to this quality, the Authority must formulate reservations in this field;
- that Erenis Company reported the ability of its service to deliver emergency calls free of charge;
- that Erenis has referred to the ability of its service to allow access to all the numbers and especially to those of special services;
- that Erenis has reported the ability of its service to allow access to the low-speed Internet.
As a result, in view of the information transmitted and subject to subsequent potential audits, the Erenis service complies with the relevant obligations.


IV-4. On the other features of the Yerenis service


The Autorité also drew its attention to the information provided to Eritrean subscribers and in particular to the general terms and conditions of sale or contract of the company.


IV-4.1. Regarding subscriber information


Following the elements transmitted by Erenis, the Autorité considers that the information of subscribers is generally satisfactory. However, some points require improvement (see the reservations, recommendations and conclusions below).


IV-4.2. Concerning amendments
general terms and conditions of sale or contract


As part of the instruction, the Authority has taken note of the amendment of the provisions that Yerenis has undertaken to make to the general terms and conditions of sale or contract for individuals of the article relating to the publication to the directory (Article 3 [IV]) in order to bring them into conformity with the code of the posts and electronic communications.


IV-5. Conclusion


At the end of this analysis, it appears that the telephone service offer proposed by Erenis and for which it has made its application for the purpose of providing social rates can be described as a universal service delivery within the meaning of Article L. 35-3 (II) of the Code of Posts and Electronic Communications and Community Law; this offer, subject to the Minister's favourable opinion, will be entitled to compensation by the universal service fund in accordance with section R. 20-34 of the same code.


V. - Compensation of the company Erenis
by the universal service fund
V-1. Reminder on compensation mechanism


The provision of a tariff reduction offer (the so-called "social tariffs") to eligible persons by Erenis, pursuant to section R. 20-34 of the code, gives the company the right to an annual compensation by the universal service fund under the following rules.
Erenis will be compensated for three types of fees:
- the sum, over the year under review, of tariff reductions actually granted to persons entitled to "single" or "supplied" social tariffs, with each monthly rate reduction for a subscriber being limited to the amount determined by the Minister for Industry (see below);
- the management fees paid by Erenis to the social organizations referred to in paragraph I of section R. 20-34 and social rate benefit managers;
- and management fees paid by Erenis to the organization referred to in paragraph I of Article R. 20-34 and charged by the operators of the management of the tariff reduction device.


V-2. Net cost of tariff reduction


The Order of the Minister Delegate to Industry of April 20, 2006 set at 4.21 euros excluding taxes per month per subscriber for 2006 the maximum amount of compensation paid by the universal service fund to licensed operators to offer a reduction in the subscription under the "single" social tariff. This maximum amount is increased to 8.21 euros excluding taxes per month per subscriber for 2006 for persons entitled to the "increased" social tariff, pursuant to Article I R. 20-34, in this case "the war invalids having the benefit of Articles L. 16 and L. 18 of the Code of Military Disability Pensions and War Victims whose additional disability is estimated to be 10% for pension purposes. of the said code, the war blind beneficiaries of Article L. 18 of the aforementioned code and the blind of the resistance beneficiaries of Article L. 189 of the same code".
The reduction proposed by Erenis to persons entitled to the "simple" social rate (3.26 euros excluding taxes per month per subscriber for 2006) can therefore be fully compensated by the universal service fund, subject to the application of the limit set out in II of article R. 20-34.
In addition, it should be noted that Erenis is required to have the right holders of the "greater" social rate that results in a free subscription. The reduction then granted by Erenis (4.10 euros excluding taxes per month per subscriber for 2006) may also be fully compensated by the universal service fund, subject to the application of the limit set out in paragraph III of Article R. 20-34.


V-3. On management costs of social organizations
and the tariff reduction device manager


Social benefits management organizations that are entitled to social rates must be reimbursed for their management fees for the implementation of social rates. The universal service fund that cannot directly credit these organizations, it will be up to Erenis to pay these fees to these social organizations in the event of a favourable opinion from the Minister. On this condition, Erenis will be able to take these management fees into account in the assessment of the net cost of its social rate delivery that will be compensated by the universal service fund.
Under these conditions, the management fees thus generated by the sending of certificates by social organizations will be charged by them to the provider, charged by the operators of the management of the tariff reduction device, which will affect them in Erenis on a pro rata basis in the total number of eligible persons.
Similarly, Erenis may take into account, in the assessment of the net cost of its provision of social tariffs that will be compensated by the universal service fund, the cost of the benefit that the provider, referred to in paragraph I of Article R. 20-34 and charged by the operators of the management of the tariff reduction device, will charge it.


V-4. On the statement by Erenis prior to its compensation
by the universal service fund


To benefit from the compensation of the universal service fund, Erenis will need to communicate annually to the Authority:
- the monthly details of the number of eligible persons who have benefited from the "single" social rate or the "higher" social rate, as well as the non-tax and monthly reductions granted;
- the amount of fees paid to social organizations;
- and the amount of fees paid to the provider charged by the operators of the management of the tariff reduction device.
This data must be audited.


V-5. Compensation by the universal service fund


It is the result of the combined reading of the provisions of sections L. 35-3 (II) and R. 20-34 (I) of the postal and electronic communications code that, following the final assessment of the net cost of the universal service for the year 2006, which will be effected by April 30, 2008, as well as for the evaluations of the following years during the period of the provision of social tariffs by Erenis, taking into account the forecast of sales


VI. - Reservations, recommendations and conclusion


With regard to the transparency of user information, the Autorité wishes that certain elements be made available more explicitly, including in the tariff grid or in any other document submitted to the subscriber; Thus, the wording and billing conditions for bank releases, payment incident fees, overpayment fees, management and opening fees must be more explicit. Erenis will also have to list the free services included in the subscription. In addition, in the event of possible amendments, suspensions or deletion of file fees, connection fees, subscription amount and communications rates, Erenis will have to ensure compliance with its obligations in accordance with the conditions set out in the postal and electronic communications code, including articles L. 33-1 (n, I) and D. 98-12 for information relating to the contractual conditions of the provision of the service and protection of consumers,
With regard to tariff readability, the Yerenis tariff grid could usefully recall the billing principles:
- a price per minute after the different relationship depending on the nature of the calls:
- local, national and international calls to land;
- local and national calls to mobile phones (Orange, SFR and Bouygues);
- international calls to mobile phones (Orange, SFR and Bouygues).
The table below summarizes the interrelationship rates based on the nature of calls:


You can see the table in the OJ
n° 266 of 17/11/2006 text number 60


- modulated according to the time ranges for calls to mobile rates:
- "full hours" for calls between 8am and 9:30pm;
- "hollow hours" for calls made outside this time range.
It also recommends that the amounts proposed by Erenis as part of its universal service delivery, on the one hand for its subscription and on the other for communications, be not revised for one year.
The AMF wishes to draw the attention of Yerenis to the fact that a favourable opinion from the AMF and the Minister on its application for the provision of social tariffs implies that the telephone service, proposed by Erenis, respects the obligations and characteristics of any provider of a universal telephone service and, in particular, those recalled in III. In particular, Erenis will be required to perform quality indicators measures annually below and to communicate the results of these measures jointly with the Minister for Electronic Communications and the Electronic Communications and Post Regulatory Authority:
- delivery time for initial network connection;
- failure rate per connection;
- time to repair a telephone failure, measured by the rate of non-removal of telephone inconvenience on the same day or the next day;
- rate of call failure;
- duration of call establishment;
- accuracy of the invoice measured by the claim rate on invoice.
In addition, the Authority wishes to draw the attention of Yerenis to the fact that it cannot in any case avail itself of a right of access to the internal network of buildings for collective use as a result of the provision of a universal service provision under the provisions of the Code of Posts and Electronic Communications and the provisions of the Construction and Housing Code.
Finally, the Autorité recommends that the Minister require Erenis to communicate to him and the Authority, prior to its implementation, any tariff changes. In this way, the Minister may consider, on the basis of his analysis or in the event of an unfavourable opinion of the Authority to repeal the approval.


VII. - Conclusion


The Autorité issues an opinion favourable to the social tariff reduction proposed by Erenis, under article R. 20-34, for its telephone service available in the Paris region, subject to the reservations expressed above.
This notice will be forwarded on the one hand to the Minister of Economy, Finance and Industry and on the other to the Minister Delegate to Industry, and forwarded for information to Erenis.


Done in Paris, September 12, 2006.


The president,

P. Champsaur


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