Glasfasernetz-Ausbau: Swisscom gewinnt Streit vor Bundesverwaltungsgericht

The Federal Administrative Court upheld Swisscom's appeal against the Competition Commission (Weko). The court ruled that Swisscom did not have a dominant position in the market being investigated. The court found that Swisscom's plan for the expansion of the fiber optic network, introduced in 2020, did not give it a dominant position.

The dispute between Swisscom and Weko has been ongoing for several years. In 2020, Swisscom presented its new strategy for expanding the fiber optic network, which involved changing the technical construction. However, other internet providers were disadvantaged by this change. Weko had taken precautionary measures against Swisscom for the future expansion of the fiber optic network.

In December 2023, Weko ruled that Swisscom had abused its dominant position and imposed an 18 million franc fine. Swisscom appealed to the Federal Administrative Court in St. Gallen, and the court upheld the appeal, dismissing the fine and the competition commission's order. The dispute is technical and concerns whether a single cable from the telephone exchange to the house (point-to-point, P2P) or a single cable from the central office to a distribution point (point-to-multipoint, P2MP) is sufficient for fiber optic network expansion.

Swisscom chose the P2MP variant, as it was faster and cheaper for implementation. This affected competitors, as they depended on the Swisscom network for providing customers with telephone and fast broadband services needed for streaming, among other things. With the new variant, they could not use their own technology and would have to rely on Swisscom's technology.

This prevented smaller internet providers from offering a customized internet service to their customers, thereby limiting effective competition. In December 2020, Weko had ordered Swisscom not to further expand its fiber optic network using the P2MP construction method. This led to delays in providing fiber optic connections to over 75-80% of Swiss households by 2030.

The Federal Administrative Court, however, lacked the basis for administrative action against Swisscom, as it did not recognize Swisscom's dominant position in the fiber optic network expansion market. This was due to the Weko's narrow definition of the relevant market, which only included fiber optic infrastructure "fully covered by the exchange center to the end customer with fiber optic lines."

Swisscom could not offer such fiber optic lines with their new construction method. Despite Weko's arguments, Swisscom did not operate in this market and did not generate revenue. Consequently, the Competition Commission incorrectly delimited the market for a product that Swisscom did not offer in that form. The Federal Administrative Court explicitly states that it is up to Weko to initiate a new investigation against the company, but it must redefine the relevant market.

The judgment is not yet final, and Weko has 30 days to appeal to the Federal Court. Swisscom must change the construction method of its fiber optic network. However, the company is no longer in the first league on the stock exchange. Despite being led by Christoph Aeschlimann, the company is acting prudently. The 730 million francs in state subsidies aimed at ensuring nationwide broadband internet are causing the opposite of the desired effect, according to a consulting study.