AOL France, a unit of the US giant AOL Time Warner, and Club-Internet, part of Germany's Deutsche Telekom group T-Online, complain that France Telecom is using its dominant position in the telephone market to offer ADSL (Asynchronous Digital Subscriber Line) at a loss-making price to squeeze competitors.

Wanadoo last week announced it was cutting ADSL prices from 45 eurosdollars) to as low as 30 euros a month for customers who sign on to the service. ADSL allows broadband access to the Internet through special phone lines available in most French cities and towns.

The head of AOL France, Stephane Treppoz, said in Tuesday's edition of Le Figaro newspaper that his company had lodged a complaint asking Wanadoo's offer to be suspended.

"To be clear, I believe that Wanadoo is selling ADSL at a loss in some places," particularly in areas away from urban centres, he said.

"That is why AOL has decided to lodge a complaint before the competition tribunal."

On Wednesday, Club-Internet announced it was going after Wanadoo for the same reason, but through a different channel.

It has appealed to the government to suspend Wanadoo's offer, saying it breaches European Union law on telecommunications fees that came into effect in July -- the same month that the European Commission fined Wanadoo 10.4 million euros for anti-competitive pricing on ADSL.

The sharp battles underline the struggle to grab or hold Internet customers in France, where more than three million subscribers have already signed on for ADSL. Nine out of 10 homes are expected to be connected to the service by

State-controlled France Telecom is looking for ways to maintain its near-monopoly position as it sails into a progressively more liberalised European market.

Even though it was taking on more than 70 percent of new ADSL subscribers at the beginning of this year, tougher competition and the emergence of lower-priced rivals has seen Wanadoo's share of the market drop to around 55 percent.

SPACE.WIRE