COMCO claims to have prevented the creation of a potential monopoly, but will fibre deployments take longer and cost more?
Changing its approach to deploying fibre meant competitors could no longer access Swisscom’s network
On 25 April 2024, the Competition Commission (COMCO) in Switzerland announced it had imposed a fine of CHF18m (£15.6m) on former incumbent Swisscom in an antitrust dispute over the expansion of, and access to, its fibre network. According to COMCO, at the beginning of 2020, Swisscom changed the way it rolled out fibre, adopting a new network design based on the use of a point-to-multipoint (P2MP) topology rather than point-to-point (P2P), which had become the industry standard in Switzerland and – in COMCO’s view – has “decisive advantages” for end users. As a result of the change, it stated that competitors would no longer have direct access to Swisscom’s network and would only be able to resell fibre services using their own brand.
COMCO believes the new build-out strategy would have created a de facto monopoly
In December 2020, COMCO took preliminary steps to prohibit Swisscom from making this modification, effectively preventing further expansion of its fibre network. COMCO stated that allowing the operator to use a P2P architecture would have altered the prevailing market structure and created a de facto monopoly for Swisscom – which would have breached the country’s Cartel Act. It added that rivals would have been deprived of commercial opportunities, while end users would have been severely limited in their choice of supplier and in the diversity of products. Swisscom challenged the provisional measures before the Federal Court, arguing that competitors would have been able to obtain a data stream for a specific connection on non-discriminatory terms, enabling them to offer a full range of services. However, in November 2022, the court upheld COMCO’s intervention. COMCO has since been investigating the extent to which a P2MP topology impacts competition, concluding that the operator’s rollout should only be permitted to continue based on P2P.
Swisscom claims adopting P2P will result in higher costs and slower deployments
Swisscom has described the decision as “incomprehensible”, stating that P2MP is the most efficient and cost-effective way to deploy fibre, which has been deemed compliant with competition law by many regulators in the EU. It predicts that by 2030, 10% fewer households will have access to fibre due to the adoption of the relatively laborious P2P topology (as it involves greater civil engineering), with rural areas most affected. Swisscom also claims its fibre build will be completed several years later than originally planned. However, COMCO believes that the cost and time savings are insufficient to offset the elimination of competition, with other operators driving service innovation and price reductions. In addition to the fine, COMCO has imposed guidelines on Swisscom governing the expansion of its fibre network in order to ensure its joint use by third parties. COMCO considers this will encourage diversity in the fibre market – to the benefit of both consumers and businesses – although Swisscom may still appeal the decision to the Federal Court.
