In brief: telecoms regulation in Switzerland

Communications policy

Summarise the regulatory framework for the communications sector. Do any foreign ownership restrictions apply to communications services?

The telecommunications sector in Switzerland is regulated at the federal level; the main sources of law being:

• the Federal Act on Telecommunications (TCA) of 30 April 1997, with a first partial-revision introduced in 2007, as last amended on 1 July 2021; and
• the Federal Ordinance on Telecommunications Services (OTS) of 9 March 2007, as last amended on 1 January 2022.

The TCA regulates the transmission of information through telecommunications techniques, including the transmission of radio and television programme services. Its main purpose is to ensure that a range of cost-effective, high-quality telecommunications services are available in Switzerland that are competitive both on a national and international level. The OTS contains detailed rules that implement the provisions of the TCA.

Within this regulatory framework, the Federal Communications Commission (ComCom) acts as the independent licensing and market regulatory authority for the communications sector. Its main activities and competencies relate, in particular, to the granting of licences for the use of radio communication frequencies as well as the regulation of the terms of application of number portability and free choice of supplier. ComCom instructs the Federal Office of Communications (OFCOM) concerning the preparation of its business and the implementation of its decisions. Moreover, it has delegated some of its tasks to OFCOM.

Certain foreign ownership restrictions may apply. In the absence of any international commitments to the contrary, ComCom or OFCOM, as the case may be, may prohibit undertakings incorporated under foreign law from using radio frequencies or addressing resources (as defined in the TCA) in Switzerland unless reciprocal rights are granted. Under the same conditions, they can be refused to be granted a licence or can be prohibited from transferring a licence.

Describe the authorisation or licensing regime.

Under the revised TCA that came into force on 1 January 2021, the general notification obligation for telecommunications service providers concerning their telecommunications services has been eliminated. Therefore, to the benefit of telecommunication service providers such as over-the-top services including Voice over Internet Protocol or Internet Protocol (VoIP) television services, the frequency spectrum may be used freely under the TCA within the limits of the applicable regulations. Further, the revised TCA provides for a legal basis for frequency sharing and trading. As an exception, registration is still required where the use of certain addressing elements and radio frequencies require a licence.

Under the applicable regulatory framework, licences are still mandatory for the use of mobile radio frequencies for the provision of telecommunication services and the provision of universal services. Frequency licences are issued either by criteria competition or, more commonly, by frequency auction. Importantly, in the absence of detailed principles for the granting of mobile radio frequency licences, the authorities have considerable discretion in setting the allocation or auction rules respectively. However, the authorities have to exercise their discretion dutifully – that is, in line with the constitutional principles and the legal purpose of the TCA. Importantly, the general rules on public procurement do not apply. Licences are granted only if, having regard to the national frequency allocation plan, enough frequencies are available.

Special rules apply if the broadcaster of a radio programme service is granted a licence under the Federal Act on Radio and Television (RTVA) of 24 March 2006, as last amended on 1 January 2022.

Such licences can be acquired only by a person that has the necessary technical capacities and, if required, the relevant proficiency certificate. Also, such a person has to commit itself to comply with the applicable legislation, in particular, the TCA, the RTVA, their implementing provisions and the licence conditions. Depending on the kind of licence required, eligibility, documentary and procedural requirements vary. Certain foreign ownership restrictions may apply.

Applications and notifications can be submitted online via OFCOM’s website.

According to the TCA, licences for radio communication and universal services are of limited duration. In 2012, licences for frequency spectrum were allocated in a public-tender procedure. In early 2019, additional frequencies, particularly for the introduction of the next-generation network 5G, were auctioned. All licences are issued in a technology-neutral manner. The licences allocated in 2012 will expire at the end of 2028 and the licences allocated in 2019 will expire at the end of 2028 or 2033, respectively. The universal service licence for Swisscom was renewed for 2018 to 2022 (ie, five years). However, due to the ongoing revision of the content of the universal service, ComCom is expected to extend such universal service licence for an additional year.

Concerning fees, the licensing authority charges administration and licence fees for radio communication licences. No licence fee is charged on radio licences for the distribution of licenced radio and television programmes under the RTVA. Additionally, the Federal Council may exempt certain governmental and non-governmental organisations from paying the licence fee provided they do not perform telecommunications services and make rational use of the frequency spectrum.

The Federal Ordinance on Telecommunications Fees issued by the Federal Council lays down the radio licence and administrative charges in the field of telecommunications law.

The timeframes for obtaining a licence or authorisation depend on the telecommunications services to be provided. If a mere registration applies without the granting of a licence, such notification can be effected via the internet within a very short period (ie, within hours).

Do spectrum licences generally specify the permitted use or is permitted use (fully or partly) unrestricted? Is licensed spectrum tradable or assignable?

Radio communication licences do specify the permitted use (eg, radio, television, amateur radio) and different rules on the trading and returning of allocated radio frequency spectrum apply. Under the TCA, frequency sharing and trading are legal subject to the following requirements. Licences can be transferred, in whole or in part. However, such transfers require the prior consent of the licensing authority. The authority may only refuse such consent if either the licence requirements are not complied with or the efficient use of frequencies free from interference is not guaranteed. Further, the licensing authority may permit exceptions from the requirement of consent for individual frequency bands if it is anticipated that the efficient use of frequencies free from interference will be guaranteed and if effective competition is neither eliminated nor seriously restricted. Advance notice must be given to the licensing authority of transfers that do not require consent.

If the licence has been granted by ComCom, the transfer rules as described previously also apply by analogy to the economic transfer of a licence, which occurs in the case of ‘acquisition of control’, as defined in the Federal Cartel Act.

Where holders of licences granted by ComCom make joint use of components of radio communications networks, they must give advance notice of this to ComCom and the joint use of frequencies requires its prior consent.

There is no specific regulatory framework for the assignment of unused radio spectrum. OFCOM is responsible for the management of the radio spectrum and establishes the National Frequency Allocation Plan that is approved by the Federal Council.

Which communications markets and segments are subject to ex-ante regulation? What remedies may be imposed?

In principle, the telecommunications regulation in Switzerland is based on ex-post regulation.

Is there a legal basis for requiring structural or functional separation between an operator’s network and service activities? Has structural or functional separation been introduced or is it being contemplated?

No legal basis for a structural separation between an operator’s network and service activities exists, and the introduction of such a legal basis is currently not contemplated.

Outline any universal service obligations. How is provision of these services financed?

ComCom awards one or more universal service licences to telecommunications service providers wishing to provide a universal service for the whole population in all parts of Switzerland. In principle, there is no obligation to provide a universal service. However, if no provider applies for a universal service licence, ComCom may appoint one or more providers as a universal service provider. The licence may only be transferred to a third party, whole or in part, with ComCom’s approval.

Universal service licences are put out to tender and awarded based on a criteria competition. The Swiss laws on public procurement do not apply. Any person wishing to obtain a universal service licence must:

• have the necessary technical capacities;
• furnish convincing proof that the universal service can be offered, particularly concerning finance and the operation of the service for the entire duration of the licence;
• state what financial compensation will be required for doing so;
• undertake to comply with the applicable legislation, in particular, the TCA and its implementing provisions and the licence conditions; and
• undertake to comply with the applicable labour laws and guarantee customary working conditions.

For universal service licences, the Federal Council decides on quality criteria, periodically reviews the universal service catalogue, and fixes upper limits for the prices of the services of the universal service that apply uniformly for the entire licence area. The universal service criteria are determined based on market developments – that is, on new needs and technological progress.

From 1 January 2020, universal service includes:

• public telephone services;
• access to the internet with a minimum data transmission rate of 10/1 megabits per second (Mbps);
• services for the hearing impaired; and
• directory and operator services for the visually impaired and people with limited mobility.

To date, new technologies such as fibre optic or mobile phone services are not included in the universal service.

On 19 May 2017, ComCom decided that the universal service concerning telecommunications will continue to be provided by Swisscom, and awarded the licence to Swisscom for the period 2018 to 2022 (ie, five years). Since the current licence expires at the end of 2022, the next universal service licence should be awarded by June 2022. However, the content of the next universal service is not yet determined. The respective consultation process that was initiated by the Federal Council on 10 December 2021 ended on 25 March 2022. To maintain a guaranteed universal service until the new provisions come into force, ComCom will extend Swisscom’s current universal service licence unchanged. ComCom expects that the next universal service licence will come into force at the beginning of 2024.

If it is shown before the licence is granted that it will not be possible to cover the costs of the provision of the universal service in a given area even with efficient management, the licensee is entitled to financial compensation. The compensation would be financed by levying a fee on all telecommunications service providers. To date, no such compensation has been awarded.

Describe the number allocation scheme and number portability regime in your jurisdiction.

The Federal Council shall issue regulations on the management of addressing resources, and, in particular, on:

• their allocation, use, blocking, transfer and withdrawal;
• the issuing of numbering plans;
• the delegation of management to third parties, the termination of the delegated activity and the supervision of the same;
• sub-allocation; and
• number portability.

OFCOM shall manage the addressing resources that must be managed at the national level. In special cases, OFCOM may delegate the management of certain addressing resources to third parties, in principle by tender.

The numbering scheme under the national numbering plan allows number portability between telecommunications service providers offering the same category of telecommunications services. Within such categories, telecommunications service providers shall ensure number portability.

Telecommunications service providers that are required to ensure number portability must bear their own costs. However, a telecommunications service provider that passes a number to another can demand that the latter contributes to the administrative costs. The costs of transmitting a passed-on number to its destination are to be defined in interconnection agreements between the telecommunications service providers. If there is no agreement, the procedural rules of interconnection apply by analogy. The new telecommunications service providers can pass part of the costs of number portability to the subscriber. To grant fast number portability, donor service providers are required to confirm number-porting applications to the recipient service providers within one working day.

The TCA regulates the management of internet domains separately. In principle, as for addressing resources in general, OFCOM shall manage internet domains if the Swiss Confederation is responsible for their management.

Are customer terms and conditions in the communications sector subject to specific rules?

The market for end-customer prices is, in general, not subject to ex ante price regulation. However, there exist few exemptions to this rule. According to the TCA, the Federal Council shall periodically fix upper limits for the prices of the services of the universal service. In the area of international roaming, the Federal Council can issue regulations to avoid disproportionately high end-user tariffs and take measures to promote competition, inter alia, by the setting of price ceilings. The same applies to value-added services to prevent abuses. Effective from July 2021, the Federal Council has included a number of new provisions in the OTS designed to increase price transparency and consumer choice in international roaming.

Accordingly, agreements with end users are not subject to specific telecommunications regulation. However, agreements and the conclusion of such agreements must adhere to mandatory Swiss law. The starting point for any query concerning the conclusion and dissolution of a contract, as well as faults of performances, is the Swiss Code of Obligations (CO). Particularly relevant in a consumer protection context are also:

• article 8 of the Federal Act Against Unfair Competition of 19 December 1986, as last amended on 1 January 2022, which prohibits the use of abusive general terms and conditions; and
• articles 40a et seq of the CO and the Federal Consumer Credit Act, which govern the consumer’s right to withdraw from a contract within 14 days under certain conditions.

Also, how prices for telecommunications services and, in particular, value-added services are announced in writing and advertising for such services are set out in the Ordinance on the Disclosure of Prices and specific provisions concerning customer data retention and security apply.

Are there limits on an internet service provider’s freedom to control or prioritise the type or source of data that it delivers? Are there any other specific regulations or guidelines on net neutrality?

Within the framework of the recent TCA revision, an open internet was a central concern. Since 1 January 2021, network neutrality is regulated by law, with some exceptions.

Providers of internet access must transmit information without making any technical or economic distinction between senders, receivers, content, services, service classes, protocols, applications, programmes or terminals. They may transfer information differently only if this is necessary to:

• comply with a legal requirement or a court ruling;
• ensure the integrity or security of the network or the services provided over it or of the terminals connected;
• comply with an express customer request; or
• to combat temporary and exceptional network congestion; in doing so, equivalent forms of data traffic shall be treated equally.

Further, in the case of special services, it is possible to design offers flexibly to meet the quality requirements of customers and as long as this does not degrade the quality of the internet connection. These are services offered in addition to the internet connection that is transmitted via the same network, for example, internet-based telephony (eg, VoIP) or television services (eg, internet-based TV).

An essential element of the fundamental net neutrality obligation is also that the corresponding providers must inform their customers and the public if they treat information differently during transmission, either technically or economically.

Is there specific legislation or regulation in place, and have there been any enforcement initiatives relating to digital platforms?

No specific legislation or regulation exists. Even though the Federal Council has, in principle, identified the need for clarification concerning platform regulation in the recent TCA revision, this issue is not specifically addressed in the revised TCA.

Are there specific regulatory obligations applicable to NGA networks? Is there a government financial scheme to promote basic broadband or NGA broadband penetration?

Swiss legislation on telecommunications is, as a rule, technology-neutral and does not contain any specific definitions referring to next-generation access networks. Accordingly, these are, in principle, subject to the provisions of the TCA.

There is no federal scheme to promote broadband penetration. Aside from Swiss telecommunications providers, some local authorities actively support the development of broadband networks. For example, the city of Zurich has assigned financial means to its own electric utility to build an area-wide fibre optic network and the responsible department in the canton of Grisons wants to advance the development of ultra-high broadband in its area. Further, because of the rather stagnant expansion of fibre-to-the-home or high-bandwidth networks, respectively, in recent years and the considerable regional disparities of the current network coverage within and between cantons, the canton of Ticino submitted a legislative initiative at the federal level in April 2016. The initiative aims at guaranteeing dense high-speed broadband coverage throughout Switzerland and calls on the Swiss Confederation to intervene actively within the framework of its powers in those areas in which the high-speed broadband networks are not being implemented by the telecommunications service providers. In this context, direct financing or a redefinition of the universal service are being considered and proposed as instruments. The deadline for drafting a bill was extended by two years in February 2021, namely, until the summer session of 2023.

Further, the holder of the universal service licence, currently the incumbent operator Swisscom, is, inter alia, obliged to provide a broadband internet connection with at least a 10/1Mbps transmission speed to all households in Switzerland, in addition to the telephone connections.

Is there a specific data protection regime applicable to the communications sector?

According to article 43 of the TCA, telecommunications service providers are subject to a general confidentiality obligation. Thus, they are not allowed to disclose to a third party any information relating to a subscriber’s communications or provide anyone else the opportunity to do so. However, the Federal Act on the Surveillance of Post and Telecommunications and its related ordinance set out the rules and procedure concerning the interception of communications and access to consumer communications data by the competent authorities.

Subscribers must be granted access to the data on which invoices are based, in particular, the addressing resources, the times when calls were made and when payments are due. Moreover, anyone requiring this data to trace nuisance calls or unfair mass advertising must be informed of the name and address of the subscribers whose lines were used for such calls.

Under the TCA, telecommunications service providers may process customer location data only for the provision of telecommunications services and for charging purposes. The processing of data for other services requires the prior consent of customers or anonymous processing.

Also, the Federal Act on Data Protection (FADP) of 19 June 1992, as last amended on 1 March 2019, applies. The FADP aims to protect the privacy and the fundamental rights of (natural and legal) persons when their data is processed by private persons or federal bodies.

Anyone who processes personal data must not unlawfully breach the privacy of the data subjects in doing so. In particular, he or she must not process personal data in contradiction to the principles of the FADP, process data pertaining to a person against that person’s express wish without justification or disclose sensitive personal data or personality profiles to third parties without justification.

The principles of the FADP are, among others, that personal data may only be processed lawfully, that its processing must be carried out in good faith and must be proportionate and that the purpose of its processing must be evident to the data subject. The Swiss parliament adopted a total revision of the FADP on 25 September 2020. It is planned that the new data protection law will come into force on 1 September 2023. However, the necessary decision by the Federal Council has yet to be made.

Is there specific legislation or regulation in place concerning cybersecurity or network security in your jurisdiction?

In 2012, the Federal Council approved the ‘National strategy for the protection of Switzerland against cyber risks’ (NCS), which specifies the various risks that originate from cyberspace, identifies weaknesses and describes how Switzerland is going to proceed in this matter. The NCS is reflected in the Federal Act on the Intelligence Service, allowing the Federal Police to monitor the internet proactively.

In 2018, the Federal Council adopted the new national strategy for the protection of Switzerland against cyber risks (second NCS) for the period 2018 to 2022, containing a total of 28 measures regarding cyber risks. To support the general public and businesses against cyber risks and improve the security of its own systems, on 30 January 2019, the Federal Council decided to set up a competence centre for cybersecurity, the National Cyber Security Centre. The core of the centre is made up of the Reporting and Analysis Centre for Information Assurance and is being designed to take on the following tasks:

• provision of a national contact point for questions on cyber risks and reporting cyber incidents;
• operation of the national Computer Emergency Response Team (GovCERT) as a technical expertise hub;
• operational incident management in the event of serious cyber incidents;
• office of the Federal Cyber Security Delegate;
• federal information and communications technology security unit;
• operation of a pool of experts to support the specialist offices in developing and implementing cybersecurity standards;
• cooperation with scientific and research bodies; and
• international specialist cooperation.

In December 2019, the Federal Council approved the report ‘Options for critical infrastructure reporting duties in the case of serious security incidents’, which describes the core issues concerning the introduction of reporting duties and describes possible models for their implementation. On 12 January 2022, the Federal Council initiated the consultation on the proposed introduction of a reporting obligation for cyberattacks on critical infrastructures. The proposal creates the legal basis for the reporting obligation and defines the tasks of the National Cybersecurity Centre (NCSC), which is intended to be the central reporting office for cyberattacks. It does not only oblige companies to help protect against cyberattacks. The proposal also defines the Confederation’s tasks in supporting the economy and the general public. The NCSC is thus tasked with warning the general public about cyberthreats and raising awareness of cyber risks. The NCSC should also take receipt of reports concerning incidents and vulnerabilities, conduct technical analyses and recommend how those reporting should proceed. The consultation ended on 14 April 2022.

Under the TCA, which came into force on 1 January 2021, telecommunications providers are required to combat cyberattacks, defined exclusively as manipulations through telecommunications transmissions, such as the distribution of malicious software or the impairment of web services (distributed denial-of-service attacks). Physical access and backdoors in hardware and software are not covered. To combat cyberattacks or to protect the installations, telecommunications service providers are authorised to reroute or prevent connections and suppress information. If these precautions defeat their purpose, the Federal Council is also empowered to issue further regulations to protect the security of information and telecommunications infrastructures and services, in particular, concerning the availability and operation of installations or ensuring redundant infrastructures and the reporting of faults.

Is there specific legislation or regulation in place, and have there been any enforcement initiatives in your jurisdiction, addressing the legal challenges raised by big data?

The FADP and the TCA contain provisions regarding the issue of data protection. The respective provisions, in principle, also apply to big data. However, because most databases contain ‘anonymised’ and, therefore, theoretically not personally identifiable information as regulated in the FADP and the TCA, addressing legal issues with big data remains a legal area with many uncertainties.

The Swiss parliament adopted a total revision of the FADP on 25 September 2020. Changes, in particular, relate to the area of information, documentation and notification obligations, automated decisions and criminal penalties. The adaptation of the implementing provisions in the ordinances to the FADP is ongoing and the new law is not in force to date.

Are there any laws or regulations that require data to be stored locally in the jurisdiction?

The FADP aims to protect the private sphere of (natural and legal) persons regarding data processing carried out in Switzerland. Concerning the transfer of data abroad, strict obligations apply. Certain data transmissions abroad must be announced to the Federal Data Protection and Information Commissioner. Further, sector-specific regulation may stipulate additional requirements or even prohibit the transfer of data abroad.

Summarise the key emerging trends and hot topics in communications regulation in your jurisdiction.

The spread of the internet has profoundly transformed the telecommunications landscape, including in Switzerland. It has undergone extremely rapid developments in recent years. Against this background, the Federal Council has recognised the need for a revision of the TCA and issued a dispatch in that regard on 6 September 2017. After several deliberations, the Swiss parliament approved the TCA that, largely, entered into force on 1 January 2021. The revised TCA has thus already incorporated some of the latest developments and trends in the Swiss communications regulation.

However, there are a number of key trends that will require further revisions – for example, the growing importance of wireless internet over 5G, implementing difficulties in that regard (construction objections for new antennas threaten to reduce the value of acquired concessions) and new applications (internet of things) may create a need for new regulations. Other key trends to be mentioned are the design of and the access to the fibre infrastructure (a topic that is currently subject to judicial review from a competition-law angle) as well as data and cybersecurity. With regard to data and cybersecurity, the consultation of the Federal Council on the proposed introduction of a reporting obligation for cyberattacks on critical infrastructures ended on 14 April 2022.