Under French law, a telecommunications operator does not need administrative authorization but only has to make a "prior declaration," Arcep said. However failure to comply with the law is a criminal offence.
Arcep said it had asked Skype to declare itself "an electronic communications operator" but it had failed to do so.
An Arcep statement said Skype should register as a telecommunications service as it provided "French Internet users with services that allow them to make phone calls to or from a device connected to the Internet… in France or elsewhere in the world."
As a regular telecoms service provider, Skype would have to undertake certain obligations, including routing emergency calls and allow legal wire-tapping.
The latest move comes at a bad time for Microsoft. The European Union fined the American giant €561 million earlier this month for failing to provide customers with a choice of Internet browser, as promised.