March 28, 2024

Is Skype a Telephone Operator? France to Investigate

The regulator, known by its French acronym Arcep, said that it had, “on several occasions,” asked Skype Communications, which is based in Luxembourg, “to declare itself an electronic communications operator,” and that the company had not acted.

A company acting as a telecommunications operator incurs certain obligations, the French agency said, notably that “of routing emergency calls and putting in place a means for allowing legal wiretapping.”

Skype and other Internet phone services use a system called voice-over-Internet protocol, or VoIP, to enable conversations and video meetings over the Internet. The service, which Microsoft acquired from eBay in 2011 for $8.5 billion, says it has hundreds of millions of users worldwide.

The French action comes at a tricky time for Microsoft, which has come under pressure from digital rights groups over how data about users collected from Skype are shared with advertisers and law enforcement agencies.

Arcep noted that people could make Skype calls from a computer or smartphone. “In effect,” the regulator said, “this service constitutes furnishing a telephone service to the public.”

French law does not require that a telecommunications operator obtain administrative authorization, Arcep said, but “only a prior declaration.” Failure to follow the law is a criminal offense, however, and Arcep said it was turning the matter over to Paris prosecutors.

Microsoft said that it had shared with the French authorities its view “that Skype is not a provider of electronic communications services under French law” and that it would “continue to work with Arcep in a constructive fashion.” Robin Koch, a Microsoft spokesman in Brussels, declined to comment further. The Paris prosecutor’s office did not immediately respond to a request for comment.

The regulator’s announcement was the latest in a series of actions aimed at global communications companies. On Jan. 20, a study commissioned by the government of President François Hollande proposed instituting an Internet tax on the collection of personal data. Also that month, a French court ordered Twitter to identify people who posted racist messages.

French media and telecommunications companies have also argued that they are unfairly subsidizing Internet services that use their content and bandwidth without sharing the revenue. French officials reacted sympathetically earlier this year when one Internet provider, Free, sought to put pressure on Google to pay for the bandwidth it uses by blocking ads.

Current European Union law does not consider Skype and similar Internet-based services to be telecommunications companies. The office of Neelie Kroes, the E.U. commissioner for digital issues, did not immediately respond to a request for comment.

Jean-François Hernandez, a spokesman for Arcep, said that the agency started demanding Skype’s compliance in April 2012, but that it had refused to cooperate.

Mr. Hernandez said that there were questions at the European level about the regulation of these companies, especially on data privacy and taxation, but that the agency’s dispute with Skype had nothing to do with that.

“It’s about the fact that when you act as a French operator you have to register as an operator,” he said.

Mr. Hernandez acknowledged that once a company was registered as a French operator, its French earnings would be subject to local taxes. “But you shouldn’t transform this into a tax story,” he said. “This agency has nothing to do with taxes.”

Stéphane Richard, the chief executive of France Télécom, the former state monopoly, has been critical of what he describes as an unfair advantage enjoyed by Skype and similar companies over the established companies that are required to transport rivals’ data without sharing in the revenue.

France Télécom said Tuesday: “We believe that this represents a positive first step toward a more balanced regulatory environment that encompasses the activity of over-the-top players.”

Kevin J. O’Brien contributed from Berlin.

Article source: http://www.nytimes.com/2013/03/13/technology/france-refers-skype-to-prosecutors.html?partner=rss&emc=rss

France Refers Skype to Prosecutors

The French regulator, known as Arcep, said in a statement that it had “on several occasions” asked Skype Communications, based in Luxembourg, “to declare itself an electronic communications operator,” and that the company had not acted.

A company acting as a telecommunications operator incurs certain obligations, the agency said, notably that “of routing emergency calls and putting in place a means for allowing legal wiretapping.”

Skype and other Internet phone services use a system called voice-over-Internet protocol to enable conversations and video meetings over the Net. The service, which Microsoft acquired from eBay in 2011 for $8.5 billion, claims hundreds of millions of users worldwide.

The French action comes at a tricky time for Microsoft, which has come under pressure recently from digital rights groups over how data about users collected from Skype is shared with advertisers and law enforcement agencies.

Arcep noted that users could make Skype calls from a computer or smartphone. “In effect,” the regulator said, “this service constitutes furnishing a telephone service to the public.”

French law does not require that a telecommunications operator obtain administrative authorization, Arcep said, but “only a prior declaration.” Failure to follow the law is a criminal offense, however, and Arcep said it was turning the matter over to Paris prosecutors.

A Microsoft spokesman in Brussels did not immediately have a comment.

The regulator’s announcement appeared to be the latest effort by French authorities to rein in the companies that have revolutionized global communications. On Jan. 20, a study commissioned by President François Hollande’s government proposed instituting an Internet tax on the collection of personal data. And a French court that month ordered Twitter to identify people behind racist tweets.

But current European Union law does not consider Skype and similar “over the top” Internet-based services to be telecommunications companies.

The office of Neelie Kroes, the the European Union’s commissioner for the digital agenda, did not immediately respond for a request for comment.

Stéphane Richard, the chief executive of France Télécom, the former state monopoly, has been critical of what he describes as an unfair advantage enjoyed by Skype and similar companies over the established companies that are required to transport rivals’ data without sharing in the revenue.

Article source: http://www.nytimes.com/2013/03/13/technology/france-refers-skype-to-prosecutors.html?partner=rss&emc=rss

DealBook: Britain Begins Review of Libor

Martin Wheatley, managing director of the Financial Services Authority, the British regulator that will conduct the review into the rate-setting process.Jerome Favre/Bloomberg NewsMartin Wheatley, managing director of the Financial Services Authority, the British regulator that will conduct the review into the rate-setting process.

LONDON – The British government on Monday officially announced a review into the rate-setting process at the center of the recent financial scandal.

The review comes as British and American regulators face mounting scrutiny for their passive approach in policing benchmark rates, including the London interbank offered rate, or Libor. Since Barclays struck a $450 million settlement last month over rate manipulation, lawmakers have blasted authorities for failing to stop the illegal activities at the British bank, despite evidence of problems.

The two-month, government-mandated inquiry will focus on whether British officials should regulate Libor and how governance of the rate can be improved.

Currently, the British Bankers’ Association, a London-based trade association, oversees the Libor process, but American and British government officials have raised concerns that there is not enough oversight into how the rate is set.

“It is clear that urgent reform of the Libor compilation process is required,” said Martin Wheatley, managing director of the Financial Services Authority, the British regulator that will conduct the review. “Such reform may include amendments to the technical definitions used for Libor, the associated governance framework and the role of official regulation.”

Libor Explained

The results of the review will be published by the end of September, and may prompt new legislation that criminalizes rate manipulation, according to a statement from the British government. The inquiry will not focus on specific actions by banks implicated in the Libor investigations.

Last week, the European Commission also announced plans to make Libor manipulation a criminal offense. American and British authorities are considering potential criminal prosecutions against traders involved in the rate-rigging scandal.

The British review follows a broad public outcry against the manipulation of Libor. Many of Barclays’ senior executives, including the firm’s chief executive, Robert E. Diamond Jr., and its chairman, Marcus Agius, have resigned in the wake of the scandal.

The British bank revealed last week that it is a defendant in a number of class action lawsuits connected to the manipulation of Libor and the European interbank offered rate, or Euribor.

The rate-rigging investigations could prove costly for many of the world’s largest financial institutions. Global banks may have to pay more than a combined $20 billion in fines and penalties in connection to Libor manipulation, according to estimates from analysts at Morgan Stanley.

Article source: http://dealbook.nytimes.com/2012/07/30/britain-launches-review-of-libor/?partner=rss&emc=rss