In December 2011 the Communications Commission issued a decision regarding interconnection, access to the unbundled local loop and collocation in which it indicated that the traditional switched legacy and copper-based access network will cease to be used as the model for the determination of cost-oriented prices.

In proceedings to determine cost-oriented prices for 2009 and 2010, the price control officer had previously argued that a copper-based access network is outdated and can hardly be regarded as a 'modern equivalent asset' within the meaning of Article 54 of the Telecommunication Ordinance.

It is generally accepted that a hypothetical efficient competitor would invest not in a copper-based access network, but in a mobile or fibre-optic network. The commission had previously stated – in a December 2010 decision on interconnection, access to the local loop and collocation – that it would evaluate a change to the legacy model approach (which is based on the traditional switched and copper-based access network) in light of technical developments.

In its recent decision the commission held that it will cease to apply the traditional model in future and that an internet protocol-based new generation network will be the relevant model for the determination of access prices. This reflects the commission's view that such a network will soon become the relevant established technology.

Consequently, switched legacy technology will no longer be the basis for the calculation of cost-oriented access prices; the commission will apply the new model for determining access costs from January 1 2013.

The commission maintained that copper-based access networks are no longer considered state of the art under the modern equivalent asset approach. Therefore, in the access network the change from legacy copper pair to fibre-optic technology must be taken into account in future.


The commission has taken a cautious approach and has announced its intention to change its previous model for the calculation of cost-oriented prices. The decision to change the calculation model is welcome. It allows parties to prepare for the new area and precludes Swisscom from arguing that a change from the previously established practice must be announced in the interests of legal certainty. Swisscom has now been warned.

The argument that the legacy switched and copper-based access network is incompatible with the modern equivalent asset approach had been voiced in earlier proceedings. The fact that it has finally found favour with the commission demonstrates the importance of filing interconnection proceedings in the interests of developing the regulator's practice.

The new decision leaves the incumbent operator and alternative providers preparing for a new era. In terms of the costs consequences of the model change, many unknowns may yet have an effect. However, it is expected that access costs will be driven down further, or at least be held at the present level. The costs associated with traditional switched technology and interconnection had begun to rise, predominantly as a consequence of the migration from traditional switched services to IP-based services. This caused a downturn in demand for such traditional services, which in turn led to a rise in the cost of regulated services.

The regulator now faces the challenge of devising a new model calculation. Its impact on prices is hard to predict. However, the change in the model represents a unique opportunity for all providers to engage in a dialogue with the regulator and to shape the calculation model for the new generation networks in the interests of all parties. The Federal Office of Communications has already commenced a public survey and comments are invited by March 16 2012.

For further information on this topic please contact David F Känzig or Katia Favre at Thouvenin Rechtsanwälte by telephone (+41 44 421 45 45), fax (+41 44 421 45 00) or email ([email protected] or [email protected]).