Optical fibre: COMCO stalls rapid network expansion

Swisscom has been hit with an CHF 18 million fine by the Competition Commission (COMCO) over what it sees as unauthorized behavior in expanding its optical fiber network. COMCO insists that Swisscom should stick to a point-to-point (P2P) topology for this expansion, which would notably prolong the process and inflate costs, particularly in rural areas.

Swisscom disagrees vehemently with COMCO’s decision, defending its adoption of a point-to-multipoint (P2MP) topology between the exchange and local cable duct. It asserts that this approach, initiated in 2020, is optimal. Despite COMCO’s stance, Swisscom argues that all competitors could access data streams from Swisscom on fair, non-discriminatory terms, enabling them to offer competitive services, including telephony, internet, and TV.

Swisscom contends that P2MP is the most efficient and economical method for rolling out fiber-to-the-home (FTTH) in Switzerland. Furthermore, it points out that P2MP topology is widely accepted in most EU states, endorsed by regulatory bodies, and compliant with antitrust laws. Hence, Swisscom maintains that its actions are in accordance with competition legislation.

However, to comply with COMCO’s directives and ensure third-party providers have the necessary layer-1 access, Swisscom will revert to installing new fiber connections using the endorsed P2P architecture and convert existing P2MP connections to P2P. Despite this, the expansion will face challenges, requiring more civil engineering work and resulting in delays, particularly for rural areas. Consequently, by 2030, approximately 10% fewer households will have access to optical fiber than initially projected, with the FTTH expansion being completed several years behind schedule.

Swisscom’s financial outlook for the 2024 fiscal year remains unchanged, as the company had anticipated COMCO’s ruling and made appropriate provisions. However, it reserves the right to appeal the decision before the Federal Administrative Court.

COMCO began investigating the implications of P2MP topology on competition since December 2020. Precautionary measures were instituted, barring Swisscom from operationalizing and marketing P2MP connections except in exceptional cases. Despite Swisscom’s challenges to these measures, the Federal Court upheld COMCO’s stance in a judgment on November 29, 2022.

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