MILAN (Standard&Poor's) June 21, 2004--Standard&Poor's Ratings Services said today that its ratings and outlook on France's dominant telecommunications services provider France Telecom S.A. (FT; BBB+/Positive/A-2) remain unchanged following today's news that the European Commission has asked FT to pay €800 million-€1.1 billion, plus interest, for alleged tax benefits under a specific "taxe professionnelle" (business tax) regime from 1994 until 2002. FT has denied the ruling's validity, claiming that it actually overpaid €1.7 billion between 1990 and 2002, and that, even if the specific tax regime had involved elements of state aid, it would have been covered by a 10-year prescription period under EU regulation. FT intends to appeal to the Court of First Instance of Luxembourg
