BRIDGING THE MOBILE

DIGITAL DIVIDE

The 4G New Deal bet

Communication to the Senate Finance Committee

June 2021

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Abstract

Increasingly strong demand for quality mobile coverage nationwide that is not

met through competitive dynamics alone

Mobile telephony appeared in France in the early 1990s. It involves the transmission of

radio waves and the occupation of frequency bands in the radio spectrum. Over the course of

successive generations of technology, it has offered increasingly sophisticated services: voice,

text, then data and, with the arrival of 4G in 2012

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, very high-speed mobile internet access.

This requires the large-scale rollout of open-air infrastructures nationwide, which can be

shared between operators to varying degrees.

This rollout, which comes with economic and social implications, and the choices

connected to allocating a scarce public resource

–

frequencies

–

involve a number of

stakeholders. Central government is steering the nation’s digital development and is

responsible for the public interest. An independent regulator, the Regulatory Authority for

Electronic Communications, Post and Press Distribution (ARCEP), assigns frequency use

authorisations (FUA), which come with associated obligations, monitors compliance with them

and, where applicable, penalises any breaches. A radio spectrum “watchdog”, the

Agence

Nationale des Fréquences

(ANFR), plans, manages and controls the use of the frequency

spectrum. Mobile telephone operators utilise these frequencies by enlisting subcontractors.

Lastly, local authorities are highly committed to fostering universal access to these services.

The market has seen exceptional momentum, with widespread uptake of mobile internet

devices among the French. In 2019, more than three quarters (77%) of the population owned

a smartphone. It is driven by the growth in new uses that have been enabled by the quality of

4G and further increased since the pandemic: personal office applications, information

searches, transactions such as mobile ordering and payment, health and social services, e-

administration, cultural practices and leisure.

To ensure the growth of these mobile services, the public authorities encouraged

competition through infrastructures and the arrival in 2009 of a new player on the market, Free,

which joined Orange, SFR and Bouygues Telecom. Central government also sought to benefit

financially by

allocating frequency bands through auctions that generated €7.2 billion in public

revenue between 2010 and 2015. This competition led to a significant drop in prices for

consumers and sustained investments by operators to acquire frequencies and build their

mobile network, primarily in densely populated areas with immediate profitability, thereby

neglecting certain other areas.

This “digital relegation” has negative consequences for the economy and the

attractiveness of these areas, as well as for the people who live or travel there.

Another source of dissatisfaction stems from the gap between the claims of coverage

rates simulated by operators, which is constantly rising, and customers’ perception of the

actual quality of service, which has resulted in continuing significant disparities between

different areas: the minimum speed for “standard” mobile internet uses was not achieved in a

quarter of the tests conducted in rural areas by the regulator in 2020. To remedy this, the

ARCEP raised its quality benchmarks, although its measurement campaigns do not provide

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Followed by the gradual arrival, from 2020, of 5G, which provides access to ultra-high-speed mobile

internet.

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an exhaustive view of coverage. In addition, several local authorities decided to finance their

own measurement operations or the development of crowdsourcing applications inviting the

public to contribute to a more detailed assessment of the coverage levels. These initiatives

have yielded convincing results. They could inspire the regulator and encourage it to implement

comparable tools at a national level.

Various programmes have attempted to bridge the digital divide across different areas

of the nation in mobile telephony. The FUAs issued starting in 2010 included obligations to

cover the least dense territories; the “white zones –

town centres” programme,

set up in 2003

to reduce white zones in 2G under the project ownership of local authorities and with state

subsidies, was extended to 3G and 4G from 2015; the Montagne law of 2016 provided a

temporary exemption from the flat-rate taxation of network companies (IFER)

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, deemed

penalising for new base stations, and obligations to pool sites; the France Mobile platform in

2016 sought to identify sites to be equipped as a priority by extensively involving local areas.

However, these programmes came late, their ambitions remained limited and their

deadlines were too long. At the start of 2017, France was behind schedule in rolling out very

high-speed mobile internet, compared to its European partners, resulting in significant

disparities between different areas.

The Mobile New Deal: a change of ambition and method

to bridge the mobile digital divide

Following the presidential election of April-May 2017, the new government team was

aware, like the regulator and operators, of existing programmes’ shortcomings. It w

anted to

make bridging the digital divide across different areas of the nation a priority by accelerating

the widespread rollout of very high-speed 4G mobile in France by implementing a change of

method. It had a unique regulatory and economic opportunity: the switch-off, between 2021

and 2024, of FUAs in several frequency bands likely to accommodate 4G. This made it

possible to plan their reallocation, which was extremely interesting for operators and could fuel

negotiations.

Initiated alongside the “national conference of the territories” on 17 July 2017, the

negotiations between the government and operators were concluded in six months. Conducted

under the aegis of the ARCEP and with the Government heavily involved, they were very

quickly organised around a principle of a trade-

off between operators’ substantial and targeted

additional investments for land planning and central government giving up all or part of the

revenues generated by the use of frequencies to be renewed and of tax revenues.

In its negotiations, the ARCEP had to take into account the balance of commitments

between private and public parties, as well as the sometimes divergent interests between

operators, regarding access to frequencies

–

the latest comers looking for rebalancing to take

place

–

and in terms of network pooling obligations, the more established operators preferring

to limit them. After several iterations and compromises, on 21 December 2017 the regulator

unveiled proposals that constituted the terms of the agreement, popularised under the English

term of a Mobile New Deal. This took the form of an exchange of letters between several

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Established since the Budget Act for 2010, the IFER is notably due by telecommunications operators

for each of the radio stations (mobile network base stations). It is collected for the benefit of local

authorities.

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ministers and each of the operators. Its terms have gradually been included in prescriptive

texts adopted by the regulator (via the FUAs) and central government.

Through this agreement, the operators undertook to accelerate their efforts to cover

priority road transport routes and the regional rail network, roll out 4G on all of their existing

sites, densify the network to provide “good coverage”

for voice and SMS to a very large

proportion of the population in the near future, and provide specific offerings for coverage

inside buildings. 4G also had to be mobilised to provide a fixed service in areas where speeds

were not satisfactory. Lastly, the operators agreed to transparency requirements regarding

network outages and were invited to make some additional efforts in terms of pooling.

The most visible and demanding measure was the creation of a targeted coverage

system (TCS): 5,000 new mobile sites per operator to be deployed, at its expense within a 24-

month period, with a rate of 600 to 800 designated sites each year between 2018 and 2025.

The Government, in liaison with the local authorities, has to draw up the list of areas to cover.

At least 2,000 are expected to be covered by pooling both the passive (pylons) and active

(base stations) equipment of the four operators. The other sites only have passive sharing.

In return for the commitments made by the operators, the regulator had to reallocate

frequencies to ensure a greater balance between the four operators. The Government

abandoned the auction process, accepted a stabilisation of royalties and temporarily exempted

from the IFER the radio stations resulting from the TCS and put into service before the end of

2022. Lastly, measures to simplify urban planning rules, intended to speed up deployment,

were taken within the framework of the ELAN law

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.

The Mobile New Deal has been described as historic by the authorities. For the first time

in a clear and strong way for the frequency allocations, priorities were placed on:

- land planning in relation to government finance concerns and in particular the collection

of new revenue;

- the digital coverage of local areas rather than results by percentage of the population

covered (a benchmark that encourages the coverage of denser areas);

- decision-making by public stakeholders at a local level, rather than investment choices

made by private operators alone.

However, this does not ensure complete coverage of the nation and its inhabitants, and

must be judged on its actual achievement.

The regulator and the public authorities felt that the terms of the agreement were

favourable to central government, whose financial effort amounted to just under €3 billion,

with

additional investments by operators being between €3.2 bn and €5.6 bn. The ARCEP sought

to demonstrate this. This was a difficult task, with many assumptions regarding investments

linked to the obligations of the New Deal being uncertain. The opposite situation

–

spontaneous

investments by operators

–

cannot be estimated. Lastly, the first elements of the agreement’s

implementation, in particular the TCS, already initiated to the tune of over 50%, outline

trajectories for the deployment of new sites under the lower ranges adopted by the ARCEP. It

therefore seems important to work on regularly assessing the implementation of the New Deal

and verifying the balance of the agreement after the fact.

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Law on the development of housing, development and digital technology of 23 November 2018.

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Lastly, central government’s relinquishment of nearly €3 b

illion in revenue was not written

into any document annexed to the finance law, depriving Parliament of information useful for

exercising its budgetary responsibilities.

Specific governance, satisfactorily implemented

at a local level for the targeted coverage mechanism,

but not sufficiently involving important stakeholders

Given the diversity of the stakeholders directly concerned

–

the regulator, local

authorities, telephony operators, ministries of the economy and territorial cohesion

–

the

implementation of the New Deal is subject to regular monitoring by two national bodies: the

France mobile coordination committee, which meets quarterly, and a more technical monthly

monitoring committee. These bodies enable dialogue between stakeholders, feedback from

frontline experiences and the establishment of progress reports on the various goals of the

agreement.

The TCS, which requires the most engineering and public intervention, is monitored at a

national level by the “France Mobile” mission of the National A

gency for Territorial Cohesion

(ANCT) and, at a local level, by project teams involving prefectures and departmental and

regional councils. The role of these teams is to select the sites and, once the decisions have

been made by ministerial decree, to ensure the installation of base stations within the allotted

time.

The purpose of the upstream stages is to preselect the areas to cover, compare these

choices together with the operators and communicate to the France Mobile mission the number

of sites corresponding to the annual allotment allocated per operator. This is decided by the

ministers, based on a proposal from the coordination committee. For the time being, this

committee utilises objective criteria on additional coverage needs, tempered by corrective rules

such as the establishment of a minimum number of sites per department, which partially

overrides the allocation of allotments.

Rolling out the selected sites is the operators’ responsibility and constitutes an outcome

obligation for them. They must nevertheless find common ground with the mayors of the

municipalities concerned. Several difficulties may arise, regarding the precise location of the

host site for the base stations, the reaction of residents, who may in particular be concerned

about exposure to waves, the consideration of rules on preservation of the landscape and

environmental protection, and the negotiation of the public domain occupancy agreement and

occupancy rent. The project team then becomes involved to facilitate relations and serve as a

mediator, if necessary.

Other stakeholders are likely to become involved in the project: authorities responsible

for urban planning and environmental rules, electricity connection companies and residents

who are receptive to the project or, conversely, hostile because of health or environmental

concerns. This can cause delays or blockages and it is important to inform residents as early

as possible. The

Agence Nationale des Fréquences

(ANFR) is absent, whereas it could be

usefully mobilised to respond to concerns regarding exposure to waves and to rebalance public

technical expertise relative to operators’ technical expertise. Lastly, one stakeholder is now

intervening with greater force: the operator of passive mobile infrastructures (tower company)

–

a subsidiary or otherwise of operators

–

which can buy existing infrastructures, acquire or

lease land suitable for their future installation and take charge of constructing new

infrastructures that it leases to operators.

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As key elements of the TCS, the project teams produced a satisfactory result on the

whole, although their dynamics vary across different areas of France. Their missions and

compositions deserve to be reinforced and expanded.

Three years after its adoption, the New Deal has contributed to substantial

progress in the nation’s coverage without meeting all expectations

Since the “signature” of the Mobile New Deal, the nation’s coverage has increased due

to the obligations of the agreement, as well as the operators’ own investments. The rat

e of

coverage by the four 4G operators increased from 45% in early 2018 to 76% in mid-2020. The

rate of coverage by at least one operator grew from 89% to 96% during the same period. The

“simulated” coverage of the least served departments has increased si

gnificantly.

The ARCEP’s measurement campaigns attest to the progress made in average speeds

provided to 4G customers over the last three years, although significant disparities between

different areas remain. Locally, quality gaps persist, however, including traditional voice/SMS

services, to the detriment of rural areas. The definition of a minimum very high-speed standard

and its verification are essential to help reduce the digital divide in quality of service.

Regarding the commitments of the New Deal, the first of them have been met or are

being met (rollout of 4G on over 97% of existing sites, end of March 2021).

-

The TCS is progressing after a worrying start. Eleven ministerial orders were issued

between mid-2018 and early 2021. They designated 2,659 sites out of the 5,000

expected from the entire programme. 761 were in service at the end of March 2021.

Of the 445 sites covered by the first ministerial decree of July 2018, expiring in

October 2020

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, 403 were commissioned on time (91%). The ARCEP is examining

the causes of these delays (opposition from local residents, electrical connection

problems, administrative refusals), although the regulator’s investigation and

decision time is lengthy: eight months to issue a verdict on the first delays, noted in

October 2020. This process must be accelerated.

-

Concerning transparency obligations, the list of unavailable sites is updated daily by

the operators.

-

Specific services to improve indoor coverage and fixed 4G offers have been

developed.

-

The implementation of commitments based on outcome obligations, sometimes with

long deadlines, is more difficult to assess. This is the case for the coverage of priority

transport routes, staggered between 2020 and 2030, in which the ARCEP has voiced

its confidence. Monitoring the densification of the network for widespread rollout of

the “good coverage” of voice/SMS services, thereby automatically increasing the

quality of mobile internet services, is still insufficiently precise, even though this goal

is a key component of the New Deal.

The pandemic has complicated the task for operators, who have been given a further

three and a half months on their initial deadlines. It has also confirmed the crucial nature of

access to very high-speed mobile broadband for economic, cultural, educational, health and

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After taking into account a period of three and a half additional months for the pandemic state of

emergency.

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social life. The networks, which saw an explosion in use in the space of a few weeks, held up

and the deployment of new sites has continued despite unprecedented operational constraints.

Advances in 4G coverage are real and the New Deal has already contributed to this.

However, they mask persistent differences between different areas of the nation. All public and

private stakeholders recognise that the New Deal will be insufficient to bridge the digital divide

across different areas of the nation. In addition, certain expectations and new challenges are

coming into play.

-

The pooling of infrastructures has not lived up to expectations: at the end of 2020,

45% of the sites were, as a minimum, pooled through passive equipment sharing (a

13% increase in number compared to the end of 2017) and 28% through active

sharing. With the number of sites having increased by 17.5% during the same period,

the pooling rate in fact fell from 47% to 45%. The New Deal failed to convince

operators to go further, with the exception of the TCS sites. This is a key challenge

for facilitating acceptance of the pylons, which decreases as their numbers rise. This

is complicated by operators’ divergent strategies, desp

ite the economic gains

generated by sharing infrastructure in sparsely populated areas.

-

Other challenges were not taken into account during the negotiation of the New Deal,

including the security and resilience of mobile networks. Telecommunications

operators are operators of vital importance, within the jurisdiction of the National

Information Systems Security Agency (ANSSI). Reinforced control by the ANSSI has

applied to 5G equipment since 2019. This control system could have repercussions

on the 4G network, as it is not possible to equip the same site with different suppliers.

The refusal to authorise certain 5G equipment could, if necessary, force an operator

to dismantle its 2G/3G/4G base stations, causing additional delays for the Mobile

New Deal.

-

Health concerns can also cause opposition and delays in deployment. These

questions have been reignited with the arrival of 5G, which is set to be installed in

the same elevated points and pylons as 4G. The ANFR has a role to play here in

establishing an objective baseline regarding exposure to waves. The National

Agency for Health, Food, Environment and Occupational Safety (ANSES) has been

called upon to assess the health risks of this exposure and present them to the

general public.

-

Environmental issues are also coming into play. There is a difficult balance to strike

between, on the one hand, those supporting greater digital temperance, who

highlight digital technology’s growing carbon footprint and the collective cost of

greenhouse gas (GHG) emissions in Fra

nce, which could rise from €1 bn in 2019 to

€12 bn in 2040 and, on the other hand, those who believe that some inhabitants

cannot be deprived of access to high-quality mobile internet. The ARCEP addressed

this task by publishing a report “for sustainable digital technology” in December 2020.

Some

recommendations

were

included

in

the

Government’s

“digital

and

environment” roadmap in February 2021 to reconcile digital and ecological

transitions.

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-

The imperatives of digital land planning must not be forgotten

o

The authorities want to avoid further technological inequalities, leading them

to include in the FUA for 5G

–

awarded after auction

–

obligations concerning

land planning.

o

The prospect of streamlining networks

–

by switching off all or part of the

“legacy” and energy

-intensive 2G/3G technologies

–

is also likely to respond

to these new challenges. This could generate the benefit of very high-speed

mobile connectivity in low-density areas and deserves to be studied without

delay. In particular, this would involve supporting the transition of 2.7 million

2G/3G user customers to 4G. The potential resulting economic gains for

operators, particularly those linked to a possible reform of the IFER, could

constitute a lever allowing the authorities to envisage new considerations

favourable to land planning: a supplement to the New Deal for the remaining

white and grey zones and, at the same time, increased pooling of

infrastructure in rural areas. The rendezvous clause stipulated for 2023 in the

frequency authorisations in the 3.5 GHz band could also be put to use to

accelerate the reduction of the digital divide across different areas of the

nation.