INTERVIEW WITH VIANNEY HENNES, DIRECTOR, FRANCE TELECOM ORANGE GROUP'S REPRESENTATION TO EU INSTITUTIONS : 'OPERATORS NEED REGULATORY STABILITY ABOVE ALL'.

The Director of the France Telecom Orange group's representation to the EU institutions, Vianney Hennes, tells Europolitics about his fears with regard to the proposals formulated by the European Commission in its public consultation on the method for assessing costs for telecommunications networks' access services.

Do you think that a drop in the prices of access to copper networks, as proposed by the Commission, is a good solution?

Any fall in the costs of access to copper networks will lead to a fall in the high-speed internet market and will therefore hit investments in new generation networks hard. Why? Because the uses of copper nowadays are not fundamentally different from the uses of fibre and so there is a close link between the prices of fibre services and prices of copper services, which are themselves related to access prices for the copper network. But, more fundamentally, operators who have invested in fibre need regulatory stability above all. So this modulation of prices is not a good solution. It will be neither effective nor practicable.

However, the Commission is proposing raising prices in places where investments in fibre will be undertaken...

This argument ignores the fact that retail prices are constrained by alternative technologies, such as cable, which represent competitive pressure. But above all, raising the price of copper at the same time as the price of fibre would inevitably lead to an increase in retail prices that has not been agreed by customers. In addition, management in space and time of such a mechanism on copper would be terribly complex as investments cannot be carried out everywhere at the same time.

Alternative operators talk of excessive profits. What's your reaction?

For ten years, regulators have been regulating access prices on the basis of costs. And good cost methodologies are designed to avoid any kind of overrecovery [of costs]. So the criticism has no basis. And a majority of alternative operators have a somewhat contradictory position. They are asking for the incumbent operators to invest while wanting to harness the investment resources. Finally, on the one hand, there are actors who want to invest and exploit the network and who therefore need regulatory stability. On the other, there are actors who are not showing any real desire to invest.

And sometimes, there are more nuanced positions. Once an operator falls into the category of investors, he realises that the value of fixed...