Lower prices for shared use of Swisscom network
Bern, 12.02.2019 - Responding to requests from Sunrise and Salt, the Federal Communications Commission ComCom has reviewed the prices charged for the regulated telecoms services offered by Swisscom. In many cases, these prices have been reduced with retroactive effect for the 2013–2016 period. They have been calculated for the first time on the basis of modern fibre-optic technology, rather than conventional copper cabling, as in the past.
Cost-based pricing – new foundation
Under the terms of the Swiss Telecommunications Act (TCA), as the dominant provider in the market Swisscom is obliged to offer certain services to its competitors at cost-based prices. If these competing providers are not satisfied with the prices that are being charged, they can appeal to ComCom, which will then issue its decision. When calculating these prices, ComCom does not apply real costs, but rather the hypothetical costs that an efficient provider would face if it were to set up a new network today using the latest available technology.
In calculating prices from 2013 onwards, ComCom for the first time applied a cost model based on fibre-optic cabling, rather than copper as in the past. The change of system was required under the provisions of the Ordinance on Telecommunications Services (OTS), which came into force on 1 July 2014.
Sunrise and Salt had asked ComCom to review access prices for the years from 2013 onwards, and ComCom has now issued partial decisions for the 2013–2016 period. An appeal against these decisions may be lodged with the Federal Administrative Court within 30 days.
Unbundling the last mile
Where the last mile is concerned, Swisscom is required to grant other providers access to its local loop only where this consists of copper cabling. Fibre-optic connections are not regulated in Switzerland. Indeed, only a few weeks ago Parliament rejected extending access regulation to fibre-optic subscriber lines.
A review of the prices charged by Swisscom for the shared use of its copper-cable networks nonetheless first requires a calculation of the hypothetical costs of a modern fibre-optic network. Then, to take account of the fact that unbundled copper lines are less efficient than fibre-optic cabling, these costs must be reduced by a correction factor as prescribed in the OTS.
Adjustments to the cost of laying cables mean that the rates for unbundled copper subscriber lines determined by ComCom are ultimately some 10–25% lower than those offered by Swisscom.
The ComCom review also put rates for guaranteed transmission capacity between two locations, known as carrier line services, much lower than those stated by Swisscom. The reduction is here is between 65% and 80%. In ComCom's view, the main reason for this adjustment lies with Swisscom’s inappropriate price-setting process, which has now been corrected.
Based on the provisions of the OTS, which were amended by the Federal Council in 2014 and are now being applied for the first time, ComCom reviewed the prices charged for the use of Swisscom cable ducts. It concluded that, taking all of the aspects of the review into account, there could be no objection to the prices offered by Swisscom for the 2013–2016 period.
Having applied the new price calculation method on the basis of latest-generation (all-IP) networks, and an adjusted capital cost rate, ComCom has also lowered network interconnection prices. This results in average reductions of around 10%.
In addition, the two complainants requested a reduction in prices for other Swisscom services, such as the shared use of premises (co-location), and billing for telephone lines with pre-determined carrier selection (subscriber line billing). ComCom's review resulted in little, if any, change in these areas.
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Last modification 03.10.2018