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Market spotlight

Trends and developments

What is the current state of the telecoms market in your jurisdiction, including any trends and recent developments/deals?

The Swiss telecommunications market is rather concentrated and dominated by the state-controlled operator Swisscom. Other major players with own mobile networks are Sunrise and Salt. There are additional, less significant mobile virtual network operators.

In the fixnet, fix broadband and television markets, cable network operator UPC, the Swiss subsidiary of Liberty Global, is an additional strong market player. With regard to these markets, electric utility companies that have, predominantly in cooperation with Swisscom, built fibre networks in Swiss municipalities must be taken into account. According to a report of the Federal Office of Communications (OFCOM) of December 2017, the fibre-to-the-home (FTTH) footprint in Switzerland amounted to 27%, mainly covering high-density areas (ie, Switzerland’s major cities).

According to the Swiss Communications Commission (ComCom) and OFCOM, 3.5% of the Swiss gross domestic product is spent on telecommunications. This equals to €2,247 per year and capita. Switzerland’s per-capita investment is very high – €302 in 2014, placing it second among European nations, behind Luxembourg with €391. This amount is almost 3.5 times the European average and corresponds to an average annual increase of 4.52% between 2009 and 2015. However, investments in Switzerland are not the highest in relation to sales (13.4%), but are still in the region of the European average (16.1%). Investments in the mobile sector are rather low in terms of total revenue. The ratio for Switzerland, however, must be put into perspective since a very high per-capita turnover dilutes the share of capital expenditure.

Major trends are mainly driven by technology and include, among other things, the growing convergence of technologies and, as a result, the battle for content. However, in comparison to other European markets Switzerland has no special features in this respect.

An important turning point in Switzerland’s telecommunications market will be the allocation by tender of new mobile radio frequencies planned for 2018 for 700-megahertz (MHz), 1400MHz, 2600MHz and 3.6-gigahertz bands, particularly introducing the next-generation network 5G.

Another milestone was the new awarding of the universal service licence in 2017 to Swisscom for the period 2018 to 2022. In this regard, OFCOM brought the universal service in line with the changing needs and technological development. It therefore adapted the universal service catalogue of the Federal Ordinance on Telecommunications Services. Among other things, traditional analogue and digital connections are changed to internet protocol (IP) technology. Further, the licensee of the universal licence is required to provide internet connection independently of a telephone connection and to increase the minimum speed for downloads/uploads to 3,000/300 kilobits per second.

Regulatory framework

Legislation

What is the primary legislation governing the telecoms market in your jurisdiction?

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

  • the Federal Act on Telecommunications (TCA) of April 30 1997, with a first partial revision introduced in 2007; and
  • the Federal Ordinance on Telecommunications Services of March 9 2007, as amended on June 13 2016.

The TCA regulates the transmission of information by means of telecommunications techniques, including the transmission of radio and television programme services. The aim of the TCA is to ensure that a range of cost-effective, high-quality and nationally and internationally competitive telecommunications services are available to individuals and companies in Switzerland, and that effective and fair competition among carriers, operators and service providers is guaranteed.

Reform

Are any regulatory reforms or initiatives envisaged?

As mentioned above, the Federal Act on Telecommunications (TCA) came into force in 1997 and was partially amended in 2007. The spread of the Internet has profoundly transformed the telecommunications landscape, which has undergone extremely rapid developments in recent years: to name only two, new broadband networks are transmitting more and more data faster and faster, and internet services such as video telephony, messengers and chats are increasingly replacing traditional telecommunications services.

Against this background, the Federal Council has recognised the need for revision and its draft of a revised TCA aims to take account of these changes and rapid developments. In particular, the revised TCA shall ensure and foster competition in the provision of telecommunications services, and better protect users from abuse. Among other things, the telecommunications service providers’ obligation to register shall be eliminated. Only providers that use specific public resources shall have such an obligation. Additionally, the proceeding and intervention possibilities for telecommunications service providers with regard to access to the infrastructure of dominant undertakings shall be amended. In this regard, the draft bill contains a delegation of competences to the Federal Council, which may provide for technology-neutral access to the local loop that can also be virtual. Further, the draft provides that each telecommunications service provider has the right to access the building entry point and to share the building's internal facilities.

Importantly, there is a paradigm shift in the regulation of the use of mobile radio frequencies. While the licensing obligation is the rule today, the frequency spectrum shall, in principle, be used freely in the future within the limits of specific statutory regulations. Frequency sharing and trading shall be made legal with an explicit legal basis.

Telecommunications service providers shall further be subject to transparency obligations with regard to the processing of the information that they transmit and the quality of their services (network neutrality).

Regarding international roaming, the draft bill foresees different measures for the Federal Council to invoke against disproportionately high retail roaming tariffs. Also, the draft consolidates the legal bases for the administration of addressing elements and provides for special provisions on domain names. Amendments shall then be implemented with regard to the provisions on emergency calls and the security of information and telecommunications infrastructure and services.

The draft amended TCA is currently being debated in the Swiss Parliament.

Universal service obligations

What universal services obligations apply?

The Swiss Communications Commission (ComCom) awards one or more universal service licence to telecommunications service providers wishing to provide a universal service for the whole population in all parts of Switzerland. There is no obligation to provide a universal service. However, if no provider applies for a universal service licence, ComCom could force one to do so.

Universal service licences are put out to tender and awarded on the basis of a criteria competition (eg, the applicant’s technical capability, financial soundness and ability to comply with the law and the licence 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. As of 2018, universal service includes:

  • public telephone services;
  • access to the Internet with a minimum data transmission rate of 3,000/300 kilobits per second;
  • 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 May 19 2017 ComCom decided that the universal service in relation to telecommunications will continue to be provided by Swisscom. ComCom awarded the licence to Swisscom for a term of five years from 2018.

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.

Regulators

Which authorities regulate the telecoms sector and what is the extent of their powers?

The Swiss Communications Commission (ComCom) is the independent licensing and market regulatory authority for the telecommunications sector. The main activities and competences of ComCom relate, in particular, to the granting of licences for the use of mobile radio 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) with respect to the preparation of its business and the implementation of its decisions. It is, however, not possible to draw a strict line between the competences of the two authorities as ComCom has delegated some of its tasks to OFCOM. OFCOM itself is part of the Federal Department of the Environment, Transport, Energy and Communications and acts as the supervisory authority in the communications sector.

In addition, anti-competitive practices and mergers in the telecommunications sector are subject to general competition laws enforced by the Swiss Competition Commission (COMCO). The cases are prepared and processed by COMCO’s Secretariat. In merger notification scenarios, provided that the notification thresholds of the Federal Cartel Act are met, the notifying parties require both clearance from COMCO and an approval of the transfer of mobile radio frequency licences by the licensing authority, either ComCom or OFCOM. Moreover, with regard to specific questions related to the conditions of competition or the market position respectively, the telecommunications regulators are required to consult with COMCO.

Foreign ownership

Restrictions

Are there any restrictions on foreign ownership or investment in the domestic telecoms market?

In principle, certain foreign ownership restrictions may apply. In the absence of any international obligations to the contrary, Swiss Communications Commission may prohibit undertakings incorporated under foreign law from providing telecommunications services in Switzerland unless reciprocal rights are granted. Under the same conditions, they can be refused to be granted a licence, or prohibited from transferring a licence.

Licensing and authorisation

Licences/authorisations required

What licences/authorisations are required to provide telecoms services?

Licences for telecommunications services have been abolished in principle. Therefore, a telecommunications service provider is obliged to notify only the Federal Office of Communications (OFCOM), which in turn registers the provider upon such notice. The amended Federal Act on Telecommunications (TCA), which is pending, will remove such notification obligation. There is no licence required for public Wi-Fi services as long as these services remain within the authorised frequencies and fulfil the technical requirements.

Licences, however, are mandatory for the use of mobile radio frequencies and the provision of universal services. Accordingly, the use of frequency spectrum for the provision of telecommunications services today requires a licence. With the envisaged revision of the TCA, however, a paradigm shift in the regulation of the use of mobile radio frequencies is planned and, as a principle, frequency spectrum shall be used freely in the future within the limits of specific statutory regulations.

Procedure

What are the eligibility, documentary and procedural requirements to obtain a licence/authorisation?

Eligibility, documentary and procedural requirements depend on the kind of licence required.

Any person providing a telecommunications service must:

  • have the necessary technical capacities;
  • comply with the applicable legislation, in particular the TCA, the Federal Act on Radio and Television and the relevant implementation provisions;
  • comply with employment legislation;
  • guarantee the working conditions that are customary in the sector; and
  • offer an appropriate number of apprenticeships. As outlined above, certain foreign ownership restrictions may apply.

Notifications can be submitted online via OFCOM’s website.

Any person wishing to obtain a universal service licence must also:

  • have the necessary technical capacities;
  • furnish convincing proof that the universal service can be offered, particularly with regard to 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 employment legislation and to guarantee the working conditions that are customary in the sector.

With the exception of the armed forces and civil defence within the scope of their duties, any person wishing to use frequency spectrum must obtain a licence. Such licence can be acquired only by a person that has the necessary technical capacities and undertakes to comply with the applicable legislation, in particular the TCA, the Federal Act on Radio and Television, their implementing provisions and the licence conditions.

Frequency licences are issued post-allocation of new frequencies either by criteria competition or, more commonly, by frequency auction. Licences, therefore, are granted only if, having regard to the national frequency allocation plan, enough frequencies are available.

As outlined above, certain foreign ownership restrictions may apply and a licence transfer, in whole or in part, is possible only with the consent of the licensing authority (ie, the Swiss Communications Commission or OFCOM). This applies also to the economic transfer of a licence.

Validity period and renewal

What is the validity period for licences/authorisations and what are the terms of renewal?

According to the TCA, licences for radio communications and universal services are of limited duration. In 2012, licences for frequency spectrum were allocated in a public tender procedure. It is planned to auction additional frequencies, particularly for the introduction of the next-generation network 5G in 2018. All licences are issued in a technology-neutral manner. The licences allocated in 2012 will expire at the end of 2028. For the frequency licences to be issued in 2018, the validity periods shall be 15 years, or 10 years for some frequencies. The universal service licence for Swisscom was renewed for the period 2018-2022 (ie, five years).

Fees

What fees apply?

The licensing authority charges administration and licence fees for radiocommunication licences. No licence fee is charged on radio licences for the distribution of licenced radio and television programmes under the Federal Act on Radio and Television. Additionally, the Federal Council may exempt specific organisations and persons as set out in the TCA, such as federal authorities and public bodies and institutions, the Cantons and the municipalities, provided that they use the frequency spectrum only for tasks that have been assigned exclusively to them for performance, public transport companies, etc.

The Federal Ordinance on Telecommunications Fees lays down the radio licence and administrative charges in the field of telecommunications law. The charged rates for administrative fees are set out by the Federal Department of the Environment, Transport, Energy and Communications in its Ordinance on Administrative Charges in the Telecommunications Sector.

The amount of the radio licence fee is calculated according to the allocated frequency range, the frequency class and the value of the frequencies, the allocated bandwidth, the spatial extent, as well as the temporal use. To cover the cost of granting or amending a licence, a one-off fee is charged at an hourly rate (currently Sfr210) depending on the time required. However, no fee is charged for changes of address and name or for cancellations.

The costs of managing a licence granted and of technical control of the frequency spectrum is covered by an annual management fee. Its amount depends on the type of licence – that is, the licence fees are further subdivided, for example, into directional radio, wireless broadband or satellite transmission, land mobile radio, etc. The annual administrative fee – for instance, for the supervision of registered telecommunications service providers and for the management of their data – is Sfr960 per provider.

Timeframe

What is the usual timeframe for obtaining a licence/authorisation?

The timeframes for obtaining a licence or authorisation depend on the telecommunications services to be provided. If a mere notification procedure applies without the granting of a licence, such notification can be effected via the Internet within a very short period of time (ie, within hours). In this case, a telecommunications service provider can conduct its business as soon as the notification is filed. With regard to the universal licence or where frequency spectrum is to be used, a frequency licence must be obtained post-allocation either by criteria competition or, more commonly, by frequency auction – that is, in a process that overall can last several weeks or even months.

Network access and interconnection

Regulation

What rules, requirements and procedures govern network-to-network access and interconnection?

Market dominant providers of telecommunications services are obliged to grant access to infrastructure and services to other providers in a transparent and non-discriminatory manner at cost-oriented prices in the following forms:

  • fully unbundled access to the local loop;
  • rebilling for fixed network local loops;
  • interconnection;
  • leased lines; and
  • access to cable ducts, provided these have sufficient capacity.

Providers of services of the universal service must ensure the capability of communication between all users of these services (interoperability). The Federal Council may extend this obligation to other telecommunications services that are publicly accessible and satisfy a widespread need. Providers obliged to provide interoperability must offer interconnection even if they are not dominant in the market. The Federal Council may impose further obligations on providers who are obliged to provide interoperability.

Pricing

Are access/interconnection prices subject to regulation?

Access has to be granted based on cost-oriented prices that are calculated based on the long-run incremental cost, an added constant premium based on a proportional share of the relevant joint and common costs and a return on the capital used for investments, as well as the replacement costs of modern equivalent assets (current cost accounting). Ducts are assessed based on infrastructure renewal accounting. Since July 1 2014 costs have been based on a modern fibre and internet protocol infrastructure (next-generation network and access).

Disputes

How are access/interconnection disputes resolved?

The Federal Act on Telecommunications (TCA) is based on the primacy of negotiation principle. If the telecommunications service providers do not agree within three months on the access conditions, the Swiss Communications Commission (ComCom) shall decide at the request of one party and based on the proposal made by the Federal Office of Communications (OFCOM). In this respect, particular account shall be taken of the conditions that promote effective competition, as well as the effects of the decision on competing companies. ComCom may also issue interim measures. If the question of market dominance must be assessed, OFCOM shall consult with the Swiss Competition Commission. ComCom shall take a decision within seven months of receiving the request, and regulate the type and form of accounting and financial information that dominant providers of telecommunications services must submit in such interconnection procedures.

Next-generation access

Have any regulations or initiatives been introduced or proposed with respect to next-generation access?

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

Infrastructure access

Land access

What rules and procedures govern telecoms operators’ access to land (both public and private) to install, maintain and repair infrastructure?

Owners of land in common use (eg, roads, footpaths, squares, waterways, lakes, and banks and shorelines) are required to allow providers of telecommunications services to use that land to install and operate lines and public pay telephones, provided that those installations do not interfere with the public use of the land. Providers of telecommunications services shall take account of the purpose and the use to which the property in question is put, and shall bear the cost of restoring it to its original state. Providers of telecommunications services will be required to move their lines if the owner of the property wishes to use it for a purpose that is incompatible with their presence. Providers have a duty of coordination, but the authorisation procedure is simple and quick. Compensation in form of an administrative charge for the use of the land shall cover costs and no more, provided that such use does not interfere with the land’s public use.

If the establishment of a telecommunications installation is in the public interest, the Federal Department of the Environment, Transport, Energy and Communications may grant the right to expropriate private property in accordance with the Federal Act on Expropriation.

Infrastructure sharing

Are infrastructure sharing agreements among operators popular and/or encouraged by the regulatory authorities? Which infrastructure sharing structures/agreements are commonly used? Do any regulations apply?

Operators can voluntarily agree on infrastructure sharing. With regard to mobile services, the current Federal Act on Telecommunications (TCA) does not explicitly regulate network sharing. Frequency pooling is even considered illegal under the currently applicable legislation. This limits the possibilities to engage in extensive infrastructure sharing. Network sharing in Switzerland is therefore not widely used. However, the draft bill of the Federal Council for the revision of the current TCA intends to regulate explicitly sharing of mobile network infrastructure including frequency pooling.

The Federal Office of Communications (OFCOM) may, on application and for reasons of public interest, require telecommunications service providers to accord to a third party, in return for appropriate compensation, the right to make joint use of its telecommunications installations and other installations, such as cable ducts and transmitter locations, if they have sufficient capacity. Under the same conditions, OFCOM may require providers of telecommunications services to co-install and co-use telecommunications installations and other installations, such as cable ducts and transmitter locations.

Pricing and consumer protection

Retail pricing

What rules govern retail pricing for telecoms services?

The market for end-customer prices is, in general, not subject to ex ante price regulation. As an exemption, the Federal Ordinance on Telecommunications Services contains ceiling prices for certain services forming part of the universal service and for value-added services.

Consumer contracts

What rules govern consumer service contracts?

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 with regard to the conclusion and dissolution of a contract, as well as faults of performances, is the Swiss Code of Obligations. Especially relevant in a consumer protection context are:

  • Article 8 of the Federal Law Against Unfair Competition, which prohibits the use of abusive general terms and conditions; and
  • Articles 40a and following of the Swiss Code of Obligations and the Federal Consumer Credit Act, which govern the consumer’s right to withdraw from a contract within 14 days.

Disclosure requirements

Are telecoms service providers bound by any consumer disclosure requirements?

The manner in which prices for telecommunications services and, in particular, value-added services are announced in writing and in advertising for such services in the telecommunications sector are set out in the Ordinance on the Disclosure of Prices. No other provisions apply with respect to consumer disclosure requirements.

Competition

Issues and concerns

Are there any particular competition issues or concerns in the domestic telecoms market?

The Swiss telecommunications market is rather concentrated and dominated by the incumbent operator Swisscom, whose majority shareholder is, by law, the Swiss Confederation. The mobile network operators Swisscom, Sunrise and Salt are the major players in this market; there are also less significant mobile virtual network operators.

In the fixnet, fix broadband and television markets, cable network operator UPC, the Swiss subsidiary of Liberty Global, is an additional strong market player. Also, electric utility companies that have, predominantly in cooperation with Swisscom, built fibre networks in Swiss municipalities must be taken into account. According to a report of the Federal Office of Communications (OFCOM) of December 2017, the fibre-to-the-home (FTTH) footprint in Switzerland amounted to 27%, mainly covering high-density areas (ie, Switzerland’s major cities).

Aside sector-specific regulation, anti-competitive practices and mergers in the telecommunications sector are subject to general competition law enforced by the Swiss Competition Commission (COMCO). In this regard, important cases include the abuse of dominance cases against Swisscom – for instance, a price-squeeze case with regard to broadband wholesale access and a case with regard to price discrimination and imposing unfair prices for wide area network (WAN) connection services. A landmark merger control case is COMCO’s blocking decision with regard to the contemplated 3-to-2 merger between Sunrise and Orange (now Salt). In merger situations, and subject to the notification thresholds of the Swiss Cartel Act being met, merging parties require clearance from both COMCO and the sector-specific regulator for the approval of the transfer of telecommunications licences. With regard to specific questions related to the conditions of competition or dominance in particular, the sector-specific regulators shall consult with COMCO. As a consequence, the regulators collaborate closely, particularly in order to avoid jurisdictional conflicts.

Sector-specific regulation

Do any sector-specific competition regulatory/legal provisions apply (eg, special conditions for dominant telecoms market players)?

As described above, market dominant telecommunications service providers are obliged to grant access to infrastructure and services to other providers, such as fully unbundled access to the local loop, interconnection or leased lines in a transparent and non-discriminatory manner at cost-oriented prices. The Federal Act on Telecommunications is based on the primacy of negotiation principle. Therefore, the access terms shall be decided by the Swiss Communications Commission upon request and a proposal made by OFCOM only if the telecommunications service providers fail to agree within three months on the terms of access. Dominant providers may bundle their services, provided that they also offer the services included in the bundle individually. This obligation does not apply if the services can be offered only in a bundle for technical, economic, quality or security reasons.

Telecommunications service providers are obliged to guarantee the transparency of prices for subscribers. The Federal Ordinance on Telecommunications Services provides that the Federal Council sets the upper limits for the prices of the services of the universal service, as well as for value-added services.

Separation

Are there any requirements for structural, functional or accounting separation of operators’ activities?

There are no provisions for a structural separation between the network and service activities of an operator.

Spectrum

Allocation

What rules and procedures govern spectrum allocation?

Any person wishing to use frequency spectrum must obtain a licence. A licence is granted on the basis of a criteria competition or, more commonly, of a public invitation to tender (ie, by frequency auction), particularly if there are not enough mobile radio frequencies available in order to meet all applicants' present and future needs.

Importantly, the principles defined by the Federal Council governing the granting of mobile radio frequency licences lack detail. Therefore, the authorities have considerable discretion in setting the allocation or auction rules respectively. However, the authorities have to exercise their discretion in a dutiful manner – that is, in line with the constitutional principles and the legal purpose of the Federal Act on Telecommunications (TCA).

Fees

What fees apply to spectrum allocation/authorisation?

The licensing authority in principle charges administration and licence fees for the allocation of frequency spectrum. According to the law and especially relevant in an auction scenario, appropriate licence revenue is to be achieved. It is for this purpose that the licensing authority may require a minimum bid. The lower limit of such minimum bid shall cover at least the licence fees discounted at an interest rate customary in the industry and at matching maturities for the entire licence period, as well as the administrative fees for the invitation to tender and the award of the licence. In 2012, the auction proceeds amounted to just under Sfr1 billion. However, the aim of the law is not to generate the highest possible revenues. Rather, the licence revenue is already deemed appropriate if it is ensured that the frequency spectrum as a scarce resource is not assigned below costs – that is, if the proceeds of the auction cover the licence and administration fees.

Transferral

Can spectrum licences be transferred, traded or sub-licensed?

Under the TCA, a licence can be transferred, in whole or in part, only with the consent of the licensing authority. This also applies to the economic transfer of a licence. Such economic transfer occurs in case of ‘acquisition of control’, as defined in the Swiss Cartel Act. The draft bill of the Federal Council for the revision of the current TCA intends to regulate explicitly frequency sharing and trading, and make it legal.

Voice over Internet Protocol

Regulation

How is Voice over Internet Protocol (VoIP) regulated in your jurisdiction?

Swiss telecommunications legislation is, as a rule, technology-neutral and does not contain any specific definitions for VoIP. VoIP services are therefore based on the existing telecommunications legislation – that is, it is firstly to check whether a specific VoIP service is to be considered a telecommunications service at all. If this is the case, the operator has the legal rights, but must also fulfil the legal obligations, of a telecommunications service provider – such as being authorised to interconnect and, if dominant, obliged to grant access to infrastructure and services, and guarantee number portability between telecommunications service providers, etc.

Telephone numbers

Allocation

How are telephone numbers allocated in your jurisdiction?

The Federal Office of Communications (OFCOM) is responsible for the issuance of the national numbering plan, which is to be approved by the Swiss Communications Commission, and for the distribution of the ranges of numbers belonging to the plan. In the form of technical and administrative regulations, OFCOM allocates the ranges of numbers to the various usage categories and defines their conditions of use.

Number portability

What rules govern telephone number portability?

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. The relevant categories are:

  • geographic numbers such as landline numbers;
  • mobile telephony numbers;
  • service identification numbers such as value-added services; and
  • linked numbers (voicemail).

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. In order to grant faster number portability, as of November 2015 donor service providers are required to confirm number porting applications to the recipient service providers within one working day (instead of five working days as in the past) and irrespective of any telecom contract disputes with the client.

Privacy and data security

Net neutrality

What is your jurisdiction’s regulatory stance on net neutrality?

There exist no specific regulations on net neutrality in Switzerland so far. In March 2015, the Swiss Council of States voted against a specific regulation on net neutrality, mainly because it wanted to await international developments on this issue. However, in November 2014 the largest Swiss information and communications technology companies agreed on a code of conduct (CoC) on net neutrality and published related explanatory notes in order to ensure open internet access in Switzerland. Under the CoC, the telecommunications service providers undertake not to lock services and applications, and not to limit the freedom of speech and information. In principle, all users shall be granted access to the full range of content, services, applications, hardware and software. However, the CoC allows specific prioritisation of certain content, among other things for the purpose of network management and to improve the network’s quality. It is explicitly stated that zero rating is permitted. As part of traffic management measures, bandwidth throttling may be applied under the CoC. The users may call upon a conciliation body in the event of a provider’s alleged breach of its CoC obligations. Such conciliation body will also constantly evaluate the CoC and its impact on the openness of the Internet, and report on this subject matter annually. In the draft bill of the Federal Council for the revision of the current Federal Act on Telecommunications (TCA), several provisions are aimed at improving consumer protection, thereby imposing transparency obligations on telecommunications service providers with regard to the processing of the information that they transmit (network neutrality) and the quality of their services.

Encryption

Are there regulations or restrictions on encryption of communications?

According to the TCA, no person who is or has been responsible for providing a telecommunications service may disclose to a third party information relating to subscribers' communications or give anyone else an opportunity to do so.

The Federal Council is empowered to regulate, in particular, the identification of the caller's line, call forwarding, the use of data relating to telecommunications traffic and the security of telecommunications services with regard to interception and interference by unauthorised persons. It shall thereby take account of the need to protect the privacy of telecommunications users. As a consequence, telecommunications service providers are obliged to inform their customers of the risks involved in using their services with regard to interception and intervention by unauthorised third parties, and must offer or indicate appropriate means of eliminating those risks.

As the encryption of communication is a state of the art data security measure, a de facto obligation to encrypt communication exists. However, there is no case law on the question of which encryption process is sufficient in which case.

Data retention

Are telecoms operators bound by any rules or requirements on the retention of consumer communications data? If so, for how long must data be retained?

Under the Federal Postal Service and Telecommunications Surveillance Act, telecommunications service providers are obliged to provide the following information on certain telecommunications services to the authorities:

  • name, first name, date of birth, address and, if known, occupation of the participant;
  • the addressing elements;
  • the types of services;
  • for pre-paid services, also the surname and first name of the person who provided the means necessary for access to the telecommunications service.

The Federal Council may oblige telecommunications service providers to provide other data on telecommunications services that may be of an administrative or technical nature or allow the identification of persons. To date, no such other data must be provided.

Telecommunications service providers must ensure that above-listed information is recorded when the customer relationship is established, and can be supplied for the duration of the customer relationship and for six months after its termination. Providers are obliged to keep the data allowing identification of the participants, as well as the traffic and billing data, for at least six months.

If it is suspected that a crime has been committed over the Internet, telecommunications service providers are obliged to provide the service with all the information necessary to identify the offender. In this regard, the same retention deadlines as mentioned above apply.

Government interception/retention

What rules and procedures govern the authorities’ interception of communications and access to consumer communications data?

The Federal Postal Service and Telecommunications Surveillance Act and its related ordinance set out the rules and procedure with regard to the interception of communications and access to consumer communications data. The starting point is a specific request for information made by the competent authorities to the telecommunications service provider. The transmission, in principle, takes place via an electronic processing system.

Data security obligations

What are telecoms operators’ general data security obligations to consumers?

As described above, telecommunications service providers are subject to a general confidentiality obligation. 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. 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 the payment 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 prior consent of customers or anonymous processing.

In addition, the Federal Act on Data Protection (FADP) applies. The FADP aims to protect the privacy and the fundamental rights of 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 contravention of 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 other, that personal data may be processed only lawfully, that its processing must be carried out in good faith and be proportionate, and that the purpose of its processing must be evident to the data subject. The FADP also provides certain specific regulations for the communications sector, such as the limitation of the right to information for journalists.