France imposes 1-hour deadline on some social media censorship on pain of massive fines

A new law has been passed in France that allows it to impose draconian punishments on social media companies that fail to take down some content within 60 minutes.

The news comes courtesy of Reuters, which reports: ‘online content providers will have to remove paedophile and terrorism-related content from their platforms within the hour or face a fine of up to 4% of their global revenue.’ Other content that is deemed ‘manifestly illicit’ by whoever makes these decisions will have to be taken down within 24 hours.

“People will think twice before crossing the red line if they know that there is a high likelihood that they will be held to account,” said Justice Minister Nicole Belloubet, apparently oblivious to the fact that the law largest the platforms, not their users. It’s not clear whether the responsibility for identifying content that crosses this like will be the responsibility of the platforms too, but if it is, they will need to be provided with a comprehensive censorship manual if they’re expected to comply.

The matter of social media censorship is a very tricky one and nobody is saying illegal content should be allowed to remain in the public domain, but this looks like a very clumsy approach by the French. There are many alternatives to the imposition of massive fines and this smacks of yet another cash grab by the French state on the US tech sector.

Orange starts reopening its shops in France

French operator Orange has already opened 30% of its shops and expects to have the rest up and running by the end of the month.

It looks like France is a fair bit further down the road to opening up than the UK, if Orange is anything to go by, but it’s also providing a taste of how society has been changed by the coronavirus pandemic. While it’s opening shops, Orange is also putting a number of measures into place to help people interact with it without leaving the house and to reduce congestion in its shops.

All its communications channels can now be used to access a new booking system that will allow them to reserve a time slot in their nearest shop, thus preventing queuing and unnecessary time spent generally milling about the place. Pretty much everything they might do in the shop can be done remotely these days, but some people like to look someone in the eye before they agree to anything.

On top of that, Orange shops will be littered with the kind of paraphernalia that would have, until recently, been indicative of extreme hypochondria. All the staff will be wearing masks, there will be hand sanitizer pumps everywhere and they will wipe down sales terminals after every use. On top of that there will be the customary floor signs urging social distancing.

While it’s great to see Orange France opening up again, a trip to the store seems like a massive drag under these circumstances. So long as everyone is required to walk around in hazmat suits, flinch from anyone within coughing distance and treat any object that doesn’t smell of surgical spirit with deep suspicion, many people will probably opt to stay in regardless.

Iliad revenue surges but device sales dampen the party

Disruptive French telco Iliad has reported 6.9% growth in consolidated revenues for the three months to March 31, but depressed device sales took some of the shine off.

While sales of fixed and mobile devices only brought in €45 million across the quarter, a 38.6% decrease in year-on-year sales would have bruised some egos. Reporting a 6.9% increase in consolidated revenues would certainly keep investors happy, but without the dent to device sales, Iliad executives would have been boasting about a 9.1% increase.

Still, few will complain with the performance of the business over the last three months, as share price increased 5.3% (12.30pm, May 12).

“All crises are revealing,” said CEO Thomas Reynaud. “And for our Group, this one has brought out the best in us, clearly showing the agility of our organization and the strength of our fundamentals.

“I have been particularly impressed by the commitment and drive of our employees who are working so hard to keep people connected. The crisis has strengthened the incredible spirit of solidarity which has always characterized Free.”

Iliad Group financial performance for three months to March 31 (Euro (€), millions)
Total Year-on-year
Consolidated revenues 1,382 6.9%
Service revenues 1,339 9.6%
Mobile ARPU 10.6 12.8%
Fixed ARPU 32 1.3%

Source: Iliad Investor Relations

As with many other telcos in Europe, Iliad is now searching for value outside its core competencies. This can be broken down to two main ventures, both of which are looking quite healthy.

Firstly, in pushing into the convergence business model in France with a FTTH proposition, Iliad is evolving to much more than a disruptive nuisance. The broadband network has now passed 15 million homes across France, adding 215,000 subscribers this quarter. The subscriber base now stands at 1.97 million, with the objective to have 4.5 million by the end of 2024.

The second venture is the launch of its own mobile network in Italy. This has proven to be a very successful bet, with Iliad providing plenty of disruption to the status quo. Revenues are growing in tough circumstances, while the team now has 5.8 million subscribers and market share of roughly 7.3%. The network currently has 2,936 active mobile sites, though this should be 5,000 by the end of the year and more than 10,000 by the end of 2024.

Although the COVID-19 pandemic is currently having a limited impact on the financial performance of Iliad, the team has warned of the operational consequence and the knock-on effect this would have. Like most of the telecoms industry, COVID-19 is not having a material impact, but the longer the lockdown persists, the more difficult it becomes to realise new revenues promised by vast expenditure.

French government dodges parliamentary debate over StopCovid app

As France prepares to relax its coronavirus lockdown, the government is avoiding parliamentary scrutiny of its controversial contact tracing app.

Once more demonstrating its uselessness in the face of even slightly difficult circumstances, the EU has failed to take the lead when it comes to the continent’s response to the pandemic. One manifestation of that is the total fragmentation of contact tracing app development, with member states each going their own way.

France is determined to take a centralised approach, in which phones would feed data to a government-owned central data repository. This would give the government the power to track individuals that may be infected with the virus and, potentially, force them to stay at home, be tested, or whatever.

But Apple and Google, who own the platforms on which all smartphones run, want to protect their users’ privacy from unilateral government intrusion, resulting in pressure from the French which they have resisted. Germany, in contrast, has realised that approach is not just intrusive but counterproductive as people are less likely to voluntarily use an app that may compromise their civil liberties. As a consequence it has recently decided to go down the decentralised route.

Now Reuters reports that a parliamentary debate on the French app, called StopCovid, was pulled at the last minutes, apparently because the government wanted to show unity on the matter and didn’t want its plan challenged. While that is indeed an excellent reason for banning debate, the whole point of democratic parliaments is to scrutinise government decisions, so that seems like an open admission that a spot of light despotism is what this situation requires.

It’s presumably no coincidence that Today France announced the start of a relaxation of its lockdown, which will include authoritarian measures such as compulsory wearing of facemasks. Having said that French people will be allowed to leave the house without a certificate and small gatherings will be allowed, which is nice. There doesn’t seem to have been any specific mention of StopCovid in the announcement and it will be interesting to see if the French government can continue to suppress opposition to it.

France does exactly what it was told not to with COVID-19 app

Much has been said about using technology to combat the coronavirus outbreak, but France has done exactly what many critics feared by cutting corners to compromise security and privacy.

France is one of the hardest hit countries during this pandemic, with more than 114,000 confirmed cases at the time of writing, therefore it is understandable the Government wants to accelerate the deployment of any projects. However, this latest debacle will have data security and privacy advocates tearing their hair out.

Having developed an application to track the spread of COVID-19 using Bluetooth contact tracing, though some functionality of the app is being prevented by Apple’s security features. Designed to protect user data, the iOS feature prevents data being moved off Apple devices via Bluetooth.

Instead of attempting to adapt the application, to ensure privacy and security is maintained for the users, according to Bloomberg French authorities have made the almost laughable decision to request Apple turn off the features in France.

Almost everyone in the digital community recognises the importance of maintaining security and privacy principles despite the severity of the situation, but it appears France missed this memo.

“We’re asking Apple to lift the technical hurdle to allow us to develop a sovereign European health solution that will be tied our health system,” French Digital Minister Cedric O said.

The French Government has stated the data would only be stored on its own servers, with the healthcare authority acting as the data controller, but this seems to be missing the point. O is effectively asking Apple to lift a security protocol and introduce a vulnerability to French Apple devices. And wherever there is a slightly weakness in cyber-defences, the nefarious characters of the dark web are waiting to pounce.

Over the last few weeks, European Data Protection Supervisor Wojciech Wiewiórowski has been quite active. In one letter, responding to concerns over user privacy, Wiewiórowski said the transfer of data would be fine under GDPR assuming the relevant protections have been put in place. It is questionable whether asking Apple to remove a security feature is consistent with this message from Wiewiórowski.

The collection of data is a reasonable approach by any authority, though it does not have to be done in a way which compromises user security and privacy. There are thousands of applications on the App Store which makes use of location or device proximity data without compromising iOS guidelines, so it clearly can be done.

What is also worth noting is that Apple is currently working in partnership with Google to create a framework for COVID-19 applications.

Although bringing the smarts of Google and Apple into the equation will certainly help, the framework which is being proposed would rely on short-range Bluetooth signals, secure local databases and anonymized device identifiers, but would ultimately store data locally on user devices. This is a point of contention with Governments who would like to collect data on centralised servers.

The application of new technologies is certainly the best way to tackle this on-going pandemic, however what appears to be the case here is a fragmented ecosystem.

Silicon Valley is taking one approach, dozens of governments are putting together their own ideas, while privacy advice is being given by centralised regulators but not being adhered to by localised authorities. The mishmash of policies and ideas is not the most efficient way to tackle the problem, or to ensure data protection and security principles are being respected.

Three weeks ago, the European Data Protection Supervisor called for a consolidated, co-ordinated approach, creating a pan-European effort which would be significantly more beneficial. More data, more scientists and more money being thrown at the problem, but this logical idea has fallen on deaf ears as the French ignore advice, cut corners and endanger the digital lives of users.

Bouygues Telecom continues tower outsourcing mission with new JV

A new joint venture between Phoenix Tower International and Bouygues Telecom has been announced to develop approximately 4,000 new towers across France to its 5G prospects.

The deal will see the creation of a new company, controlled by Phoenix, will help Bouygues Telecom not only meet regulatory obligations for mobile coverage, but perhaps also accelerate a challenge to the market leaders in France.

“This agreement allows Bouygues Telecom to sustain its efforts in sites deployment in Less Dense Areas and also to meet the New Deal requirements,” said Jean Paul Arzel, Head of Network Division at Bouygues Telecom. “It will also contribute to considerably strengthen our Mobile network coverage in rural areas.”

Thanks to the deployment of 5G infrastructure, telcos are under financial strain to meet expectations and remain competitive, though regulatory obligations for 4G coverage in the rural environments are also placing stress on the spreadsheets.

In 2018, French regulator ARCEP announced new obligations for the spectrum licence-holders to improve mobile coverage across all regions in the country. Some of the obligations included forcing each operator deploying at least 5,000 new cell sites across the country, some of which will be shared infrastructure, as well as ubiquitous 4G coverage for the population and on transport networks.

As France is a large nation with very low population density in some regions, this could prove financially to be a difficult standard to meet, though joint ventures with tower companies is one way to achieve such objectives. It might mean that the telcos are ‘tenants’ on the infrastructure for the long-term, but it does levitate some of the financial pressures in the short-term.

Alongside this agreement with Phoenix, Bouygues Telecom announced a similar agreement with Cellnex, the Spanish tower company which is aggressively rolling out new infrastructure as well as purchasing assets from a variety of cash-strapped telcos.

As part of this agreement, Cellnex will contribute €1 billion to fund a 31,500km fibre optic network in France to provide mobile backhaul and fixed connectivity services. Bouygues Telecom will act as the anchor-tenant of the network, signing a signing a 30+5-year contract worth €4 billion, which will account for an estimated 80% of the joint ventures total revenues. Cellnex is free to offer services to other competitors, but Bouygues Telecom is the priority.

Although these agreements will benefit Bouygues Telecom in the short-term, it is handing over more control of its network to external parties. Bouygues Telecom still owns the active equipment, the 4G and 5G radios, though in not having complete ownership of its passive network, the towers and backhaul, it might have to compromise on some decision making.

For example, one proposed site might be excellent for Bouygues Telecom’s network needs, but as the tower companies will be thinking of other customers also, some compromises might have to be made. Bouygues Telecom will act as the anchor customer on these sites, so its demands will certainly be listened to, but as the tower companies have the controlling stakes in the joint ventures, Bouygues Telecom might not get its own way all the time.

This new set-up is of course a compromise, but it does have an eye on the bigger picture. A concession today might lead to greater profits tomorrow.

BT trims another slice from its Global Services unit

BT has announced it intends to sell its French domestic operations to Computacenter as it continues to trim down the Global division which caused so much heartache in bygone years.

The transaction is set to complete towards the end of 2020, and while financials of the deal have not been unveiled, BT has said the French domestic business accounted for roughly £104 million across the course of 2019.

“With this agreement we are close to reaching another milestone in the execution of our strategy to make BT Global a more agile business focused on the growing requirements of our multinational customers,” said Bas Burger, CEO of Global at BT.

“I believe this agreement will prove a key step forward for our customers, for our people and for BT. It also offers a positive future for our domestic customers and the people who support them.”

With a greater emphasis being placed on multinational corporations as opposed to domestic businesses, the Global business unit is undergoing a major restructure. This disposal adds to the sale of domestic operations and infrastructure in 16 countries in Latin America to CIH Telecommunications Americas. At the end of 2019, BT also announced it was selling its Spanish managed ICT services business, including its domestic network infrastructure, to funds managed by Portobello Capital.

While it is a perfectly sensible strategy to focus on high-margin networking, security and cloud services for multinationals as opposed to diluting profits too severely with a focus on smaller operations, this is a restructure which has perhaps been in the works for some time. Let’s not forget, the Global business unit is the rebranding for Global Services, a considerable headache from 2016.

The accounting scandal in Italy forced BT to look at the Global Services business unit operationally, and this could perhaps be traced as the root cause of the restructure which is underway today. The pensions deficit of 2017 is another financial hole to fill, perhaps adding to the wave of disposals which have been initiated over the last few months.

It is important to note that in each of these markets BT will retain a presence. This is not a complete closure of business in France, Latin America or Spain, but simply a realignment of priorities to focus on customers which offer more attractive profit margins.

On the financial side of this business unit, performance does seem to be stabilising. During the last earnings call, CEO Philip Jansen said revenues had dipped by 10% to $1.1 billion thanks to legacy portfolio declines, though the order book was up 21% to $4 billion on a 12-month rolling basis, the highest level for over two years, thanks to the new focus on multinationals.

France to postpone April 5G auction – quelle surprise

An auction of a bunch of mid-band 5G spectrum was due to take place in France next month, but now it isn’t coz of COVID-19.

The French Telecoms regulator Arcep announced the auction last November in simpler, more innocent times. 310 MHz of spectrum in the 3.4-3.8 GHz band was due to be on the table in four 50 MHz blocks and 11 10 MHz morsels. You can see how Arcep envisaged the process playing out below.

While, in principle, the auction could technically take place despite the severe restrictions on movement currently imposed in France, in practice there’s little point in pushing ahead with such things when all the follow-up activities would be so difficult to perform. Arcep has yet to publish a press release announcing the cancellation, but has individually advised plenty of media that is the case.

On top of the movement restrictions and the consequent fact that everyone who can is now working from home, nearly all businesses are going to be severely cash flow constrained while the world remains in limbo as we attempt to minimize the severity of this once-in-a-century pandemic. It seems very unlikely that operators will be inclined to bid with any enthusiasm whatsoever in any spectrum auctions until this runs its course.

France directs €1.1 billion cartel fine towards Apple

The iGiant has already said it strongly disagrees with the opinion of the French Competition Authority, though a decade-long investigation has found Apple, Tech Data and Ingram Micro guilty of price fixing.

After an investigation was launched in 2012, Apple was found guilty of fixing prices for its retailers in France as well as limiting competition. Apple is now in line to receive a record fine totalling €1,101,969,952, while Tech Data and Ingram Micro will have to find €76,107,989 and €62,972,668 respectively.

Interestingly enough, what this ruling suggests is that Apple was unfairly using contractual clauses to strangle supply and control pricing on the high street. Pricing is a very important aspect of the Apple business, allowing the company to maintain profit margin, but also retain the premium brand perception is has cultivated over so many years.

The Apple brand is the envy of many companies around the world, it allows Apple to charge a premium, but also command customer loyalty. Limiting supply could help create this sense of exclusivity to justify the pricing premium, though the French Competition Authority clearly thinks this is contrary to the law.

“Given the strong impact of these practices on competition in the distribution of Apple products via Apple premium resellers, the Authority imposes the highest penalty ever pronounced in a case (€1.24 billion),” said Isabelle de Silva, President of the French Competition Authority.

“It is also the heaviest sanction pronounced against an economic player, in this case Apple (€1.1 billion), whose extraordinary dimension has been duly taken into account. Finally, the Authority considered that, in the present case, Apple had committed an abuse of economic dependence on its premium retailers, a practice which the Authority considers to be particularly serious.”

Firstly, the French Competition Authority has said the trio sterilized the wholesale market for Apple products through an agreement where the distributors would not compete with each other. The investigation suggests Apple managed the process of product and customer allocations between its two wholesalers between 2005 and March 2013, even going as far as dictating the exact quantities of the different products to be delivered to each reseller. Through such a practice, supply could be strangled and therefore high prices maintained.

Secondly, so-called Premium distributors were not allowed to run promotions or offers which made the products cheaper that what Apple would sell. Thanks to some very strict contractual clauses, very little wiggle room remained to offer any promotions to create a more attractive competitive environment on the high street. In short, any promotion, whether related to price or not, was controlled by Apple not the resellers and retailers.

Finally, Apple has abused the economic dependence of these Premium distributors by subjecting them to unfair and unfavourable commercial conditions. The abuse of economic dependence, as it is known in France, is uncommon, but the result of a complex tangle of multiple contractual clauses and practices. In short, this effectively offered Apple unreasonable control over the businesses of its distributors and resellers.

Although the French Competition Authority has conceded Apple is free to manage its distributors and value chain in whichever way it feels necessary, it has reminded the tech giant it has to pay suitable homage to the law. For example, it is illegal to pre-assign customers to distributors, agree sales prices or disadvantage distributors with the power of its own sales channels. In short, the French Competition Authority found plenty of opportunity to poke Apple with a sharp stick.

Huawei may well have survived in France as well

Reports are suggesting the bullet dodging display from Huawei is set to continue as France edges closer to a decision.

None of the authorities have been forthcoming with the official decision, though anonymous sources are suggesting the Agence Nationale de la Sécurité des Systèmes D’information (ANSSI), the French cybersecurity agency, will give the thumbs up with similar restrictions to the UK. The introduction of limitations would not be considered a perfect outcome, but this should be considered a win for Huawei.

“They don’t want to ban Huawei, but the principle is: ‘Get them out of the core mobile network’,” one of the sources stated.

Should this position turn out to be accurate, the France has taken the same view on the network as the UK. As long as Huawei technology is kept out of the core network segment, where sensitive data can be exposed, the risk of working with such a vendor can be mitigated. This seems to be the position being communicated through the back challenges, though there are certainly likely to be nuances in the official statements.

The UK decision, which seems to have been used as the framework for the French position, places a 35% restriction on Huawei equipment and an outright ban on Huawei technology in the core segment of the network. The 35% limitation applies to both market share of the RAN equipment inventory and also the total traffic which traverses across those radios which are deemed ‘high risk’. It remains to be seen what nuances are to be placed on the French decision.

Although the French telcos might breathe a sigh of relief, the US is likely to be considerably aggravating with the leak. France already has an awkward relationship with the US, it is one of the champions of a digital sales tax on internet companies after all.

The US has always maintained the risk cannot be mitigated as the components of the network are more intrinsically linked than ever before. Telcos should not be allowed to separate the RAN and core, though this is the position of the politicians not necessarily the telcos who have never worked with Huawei. There is no skin in the game here, therefore there have been no opinions expressed.

Once again, this appears to be a failure for the US lobby missionaries. The pesky Europeans are refusing to listen to the US bullies, instead choosing to make their own decisions based on their own criteria.

Looking at the French situation, Orange might have gone the other direction, selecting Nokia and Ericsson for 5G deployments, but Bouygues Telecom and SFR were not in such a favourable position. Both are dependent on Huawei for 4G and would have to have considered some Huawei equipment for 5G to ensure backwards interoperability, as least for non-standalone 5G.

This does seem like a sensible decision, made for the benefit of the French connectivity space, but it will likely rile the US.