In two parallel procedures, ComCom has decided that Swisscom is dominant in the market for leased lines in the access network. In the trunk network Swisscom is not market-dominant wherever at least two other network operators can provide leased lines in addition to Swisscom.
Swisscom had claimed that it was market-dominant only in the case of leased lines with a capacity of 2 Mbit/s. It had therefore restricted its previous offering to this bandwidth.

Swisscom has now been obliged by ComCom on the one hand to publish an offering with cost-based prices for leased lines with bandwidths from 2 Mbit/s to 10 Gbit/s by the end of May 2010 and on the other hand ComCom has retroactively reduced the wholesale prices for leased lines in this range for 2007, 2008 and 2009 by 15 to 30%.

This means that the alternative telecommunications service providers now have the option of acquiring leased lines throughout Switzerland with bandwidths from 2 Mbit/s to 10 Gbit/s at competitive prices. 

Only a degree of regulation is necessary
From ComCom’s viewpoint, Swisscom is not obliged to offer leased lines where different alternative networks are available for selection by a provider. Such connections primarily exist between the large conurbations and stimulate competition in this area of telecommunications networks. In other words, regulation is being restricted to those sections within the Swisscom network where sufficient competition does not yet currently prevail. If the alternative providers will expand their own infrastructure in the next few years, the dynamic of competition will also increase outside the conurbations.

The reduction in wholesale prices for leased lines to a cost-based level constitutes a measure enshrined in law to stimulate competition at the level of infrastructure and services. ComCom once again applied the proven “LRIC method” (LRIC = Long Run Incremental Cost) to the pricing calculation, as provided for in the Telecommunications Services Ordinance (TSO art. 54). In addition, ComCom has also taken a decision on various quality characteristics of leased lines, such as, for example, availability or the technical requirements which are regularly agreed between providers in the form of service level agreements.  

What are leased lines?
The term “leased line” designates the provision of transmission capacities which are provided within telecoms networks as connections between two specific points. Leased lines are required to exchange large volumes of data between two locations.

Leased lines are important for the alternative telecommunications providers both in the business client sector and for connections within their own network. In the case of business clients, the providers use leased lines to link different business sites to each other. In addition, leased lines are important for the alternative providers themselves, as they use them to link different parts of networks in the mobile radio and fixed network and temporarily bridge gaps in connections. The construction of independent infrastructures is time-consuming and demands high levels of investment. The alternative providers are therefore dependent in the meantime on access to Swisscom’s network to enable them, for example, to connect an unbundled exchange with their own network.

Lower prices for access to Swisscom leased lines