Swiss regulator the Federal Office of Communications (Ofcom, or Bundesamt fur Kommunikation – Bakom), has revised Telecommunications Services Ordinance (TSO) relating to access to the incumbent’s network to take into consideration technology developments. The price competitors must pay Swisscom for access to its network will continue to be based on the costs incurred during construction of a new network, featuring modern technology. Noting that the existing pricing system was out of date, Ofcom explained: ‘until now the costs for accessing the last mile were based on a copper network and traditional switching equipment. Today, an operator would not construct a new copper network but would instead lay optical fibre.’ The TSO revisions will come into force on 1 July 2014, although they will be phased in over a period of three years, in order to allow the incumbent to adapt to the new conditions.
For calculating costs, Ofcom noted that it is not appropriate to apply the network construction model for all components of the network, as it would not make economic sense for each provider to construct its own, independent cable ducts; it should be possible for existing ducts to be used efficiently by all providers. As such, the pricing will not be calculated on the basis of the cost of constructing new ducts, instead, the long-term maintenance and the needs-based expansion will be the main factors. Ofcom added that it expects to see a moderate reduction in regulated access prices amongst telecom providers in the medium term, although ‘this is unlikely to lead to large price fluctuations on the retail telecommunications services market, because the adjustments to the current cost calculation model are only gradual.’