Swisscom halts FTTH effort

In response to concerns expressed by the Swiss Secretariat of the Competition Commission (ComCo), Swisscom has put its fiber to the home (FTTH) plans on hold while it decides how to proceed.

In response to concerns expressed by the Swiss Secretariat of the Competition Commission (ComCo), Swisscom has put its fiber to the home (FTTH) plans on hold while it decides how to proceed.

Swisscom has partnered with local utility firms for its planned roll out (see, for example, “Swisscom, Energie Wasser Bern agree on Berne FTTH/FTTB network”). The partnerships include sharing the costs of the deployment; once the multi-fiber infrastructure is installed, the utility would own the cable, which it would make available to Swisscom as well as other providers to meet ComCo’s competition requirements.

However, ComCo expressed reservations about the fact that Swisscom would be able to establish minimum prices that the utilities could charge for certain services. The Swiss incumbent would potentially exercise undue influence on its competitors pricing structure, ComCo decreed in a report.

In response Swisscom announced that it “feels compelled to carefully examine all agreements concluded to date with its partners in order to determine whether the partnership model can be adapted at reasonable business risk. New partnership agreements that have already been negotiated cannot be signed for the time being, as the changed situation calls for a rethink of the underlying partnership model.”

Swisscom called the clauses that give it the price fixing power “elementary key aspects of the partnership model.” It also criticized the regulatory authority for condemning the clauses “on strictly legal grounds rather than waiting to see how the actual market dynamics play out.”

The carrier says it will consult with its utilities partners to determine if the agreements can be saved. If not, Swisscom said it might have to roll out FTTH infrastructure on its own – an outcome that would significantly slow the deployment of FTTH in Switzerland, the carrier asserted.

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