The European Union regulator alleges that cable companies are forced to deal with lengthy and complicated procedures to open a account for a subscriber, whereas the process is relatively straightforward for the former state monopoly.
Cable firms wanting to offer phone or internet services must get permission from local municipalities, while France Télécom does not need such permission, the commission said.
In addition, the commission said that cable firms do not enjoy the same rights to use public facilities, such as network infrastructure, as phone operators. Municipalities can also charge cable firms more for using public facilities than they may charge phone operators.
"These various handicaps have prevented the cable networks from developing," the commission said.
It has threatened legal action that would ultimately end up in the European Court of Justice, if France does not mend its ways.
The latest legal attack against the French government comes a day after the commission ordered the company to repay between €11m (£7.6m) and €50m (£34.5m) to rival phone companies that were overcharged for their contributions towards providing phone lines to remote locations in France.
The Commission is also challenging the French government over a €9bn (£6.2bn) credit line it offered to the struggling company last year. It suspects that the guarantee is illegal state aid.
It is also conducting an antitrust investigation into France Télécom's internet service provider, Wanadoo. The commission believes Wanadoo has being selling its Pack X-tense and Wanadoo ADSL services at below cost.
The Commission said one competitor, Mangoosta, folded in August 2001 because of the alleged predatory pricing.
Cable companies have had very limited success in breaking into the market for high-speed internet access in France.
A commission study published last December showed that cable operators had 186,000 lines to provide internet services compared with France Télécom's 691,000. By comparison, in the UK, cable groups had 598,000 lines, more than twice as many as BT, the former monopoly operator.