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French telecom regulator tries to force Skype to register as operator

12 March 2013
The French telecommunications regulatory authority, ARCEP, today announced that it had complained to the French prosecutor about Skype's persistent failure to register as a telecommunications operator in France.  According to the ARCEP, the Skype service that permits users to call telephone numbers on public fixed and mobile networks constitutes a publicly available telephone service and therefore requires Skype to register as an operator.  Failure to register is theoretically subject to criminal sanctions of up to one year imprisonment and a fine of 75,000 euros.  These sanctions are in large part theoretical; we are not aware of any criminal conviction being levied for failure to register as an operator in France.

The ARCEP's action against Skype is an occasion to revisit the criteria for being considered an operator under European law.  Many over-the-top (OTT) services "look and feel" like a telecommunication service.  Nevertheless, many of those services are not in fact electronic communications services requiring registration as an operator under European law.  Hogan Lovells and Analysys Mason conducted a study for the ARCEP in 2011 examining the question of what constitutes an operator under French and European law.  Our study found that the key test is whether the OTT service provider assumes the contractual obligation to transmit signals from point A to point B.  In the case of a pure OTT service provider, the responsibility for transmitting signals resides with the Internet access provider.  The provider of the OTT service generally only provides the user with a software application that transforms the packets into a useful service such as a video conference.  The OTT provider typically does not assume any responsibility for the transmission of the packets over networks.  When using an OTT service, a consumer simultaneously uses two service providers: the Internet access provider whose job is to provide connectivity and the transmission of packets, and the OTT service provider whose job is to provide an application that can transform the packets into a useful service.

Our study concluded that by focusing on contractual obligations – as opposed to technology – regulators can better evaluate whether OTT providers should be considered operators under the European regulatory framework.  We are not aware of how the ARCEP approached Skype's services.   ARCEP seems to focus on the Skype service that permits a voice over Internet call to complete to a number on a public telephone network, rather than on the "computer to computer" voice over Internet calls.

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