Government ends Swisscom’s final monopoly

8 Oct 2004

The Swiss National Council has voted to remove Swisscom’s monopoly on the local loop, as part of a revision of the country’s 1997 Law on Telecommunications. The ruling introduces a variety of access regulations on Swisscom, from the provision of fully unbundled subscriber lines, to access to cabling and the interconnection of leased lines. Alternative operators will also be granted fast bitstream access (for two years) and the option to bill customers directly.

As expected, Swisscom swiftly moved to protest against the decision, claiming that the ruling puts state intervention ahead of free market competition. It maintains there are no pressing reasons to unbundle the local loop in Switzerland, given that the country already enjoys a broadly competitive market, in particular arguing that free competition from cable companies has in itself created a level playing field. Moreover, it complains that the changes will act as a disincentive to investment in infrastructure, leaving it with the sole burden of investing in infrastructure, while competitors effectively freeload.

In response to Swisscom’s complaints, president of the Swiss telecoms regulatory body ComCom, Fulvio Caccia, has commented that many of the incumbent’s points are disingenuous, particularly in respect of freeloading. According to Caccia Swisscom’s competitors wanting access to the copper network will pay a price based on international rules which will allow Swisscom a profit margin. Perhaps more importantly, Caccia hopes the new regulations will reduce the risk of Swisscom and Cablecom, the country’s largest cable TV operator, from establishing a duopoly.

Switzerland, Swisscom,
PriMetrica’s GlobalComms, ComCom

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