WORLD TRADE
ORGANIZATIONG/IT/10
11 April 2000
(00-1456)
Committee of Participants on the Expansion of Trade in
Information Technology ProductsOriginal:  English
SWISS NATIONAL EXPERIENCE PAPER
Reform of Technical Regulation in the Telecommunication Sector
Switzerland's experience and course of action
1. OVE RVIEW..................................................................................................................... .........2
2. The evolution of the legislative and regulatory framework ..................................................2
2.1 Technical regulation unde r the monopoly operator ....................................................................2
2.2 Institution of the Swiss Tele communications re gulator 1992.....................................................3
2.3 The 1998 Telecommuni cations re form.......................................................................................3
2.4 Specific regulatory instruments for Radio- and Terminal Equipment........................................4
2.4.1 Essential requirements.................................................................................................... ............4
2.4.2 Standardisation........................................................................................................... ................4
2.4.3 Management and conformity assessment....................................................................................5
3. The next step................................................................................................................ ..............5
3.1 Pressure for further change ................................................................................................. ........5
3.2 The concept................................................................................................................. ................6
3.3 Action plan................................................................................................................. .................7
4. Internationa l relations...................................................................................................... ........7
ANNEX A: Ti me Line............................................................................................................. ...8G/IT/10
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1. Overview
As Switzerland moved to a competitive telecommunications structure in the past decade,
responsibility for technical regulation was taken out of the hands of the governments-owned
monopoly carrier and given to a newly created regulator in 1992.
Simultaneously the development of technical regulations for radio and telecommunications
terminal equipment has undergone a substantial development – though in steps – with a view to
confer more responsibility to market players.  The regulators' role in this respect has been focussed on
the establishment of adequate safeguards for matters such as protection of networks and efficient
radio spectrum usage.
Switzerland's experiences with the reforms and the establishment of effective technical
regulations has shown major benefits for users and industry, including reduction of costs, improved
variety of product and services offers and enhanced competitiveness.  For the industry, administrative
costs are reduced and its efficiency is improved.
With the advent of the next millennium Switzerland is further pursuing a last  and final step of
liberalisation in placing the responsibility for conformity assessment of radio and terminal equipment
in the hands of manufacturers as far as possible.
The Federal Office of Communications (OFCOM) has launched a corresponding project in
response to the societies' recent demands for Info rmation Technology and to the industry's needs for
new regulatory instruments, allowing them to cope  more effectively with the increasing speed of the
development of technology and with the globalisation of the markets.
This paper describes the development of Switzerland's current regime of technical regulation
relating to telecommunications equipment.  It outlines the stages of development, beginning with amonopoly carrier that used to set all the standards a nd to conduct all the tests, then the transfer of
these powers to a specially created regulatory body, followed by the actions taken in response to the
liberalisation of the telecommunications infrastructu re in Europe in 1998, and concluding with the
most recent initiative towards the establishment of new rules to allow these functions to be largely
transferred to industry.
This paper further outlines the key elements of technical regulation serving as the basis of
confidence between Government, carriers, industry, and users.
Even through the evolution of technical regulati ons is inherently linked with the evolution of
the general regulatory and technological environment, this report does not elaborate further on these
general issues – such as the mentioned major liberalisation step of services and infrastructures in1998.  Progress towards a more open and transparent regime has required extensive industry and
public consultation as well as a careful management to set ambitious and achievable targets.
A time line showing the major milestones in  the changes to technical regulation in
Switzerland is provided in Annex A.
2. The evolution of the legislative and regulatory framework
2.1 Technical regulation under the monopoly operator
Before 1992 the provision of Telecommunications services was governed by the Telegraph
and Telephone Law (Telegraphen und Telefonverkehr sgesetz) of 1922.  Under this legislation the
Swiss Postal, Telecommunications and Te legraph Administration (PTT) providedG/IT/10
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Telecommunications services as a monopoly operator for decades.  Except for simple Telephone
Terminal Apparatus, the right to supply all other Telecommunication Terminal Equipment was
restricted to the monopoly operator.  For this type of devices a moderate liberalisation of the provision
took place in 1987.  However, corresponding regulatory control was left to the monopoly operator,
namely:
- the setting of standards;
- testing and type approval;
- establishment of the relevant regulations; and
- the enforcement of compliance with them.
2.2 Institution of the Swiss telecommunications regulator 1992
The strong powers of regulation the monopoly carrier enjoyed came to an end when the Swiss
Parliament adopted the first Telecommunications Law of 21 June 1991 which introduced competition
in the provision of value-added services as well as in the supply and maintenance of terminal
equipment and cabling.
To manage these and other changes, a regulatory body for telecommunications issues was
established in 1992.
This telecommunications regulator, OFCOM, was given responsibility for technical
regulation, protecting the carriers' exclusive rights, protecting competitors from unfair carrier
practices, protecting consumers and promoting efficiency.  The new technical regulatory
arrangements produced the following results:
- A regime of both regulatory and voluntary standards was established that allowed
OFCOM to account for all typical risks re lated to public interest such as the
protection of networks and efficient radio spectrum usage.
- Strong consultative processes allowed industry and users to participate in the
development of Swiss technical regulations through expert committees and working
groups.
- A further opening of the market of the testing laboratories industry was achieved by
means of a number of bilateral agreements on the mutual recognition of test reports
for the purposes of Swiss Type Approval which were established between 1993 and
1995.
These measures have been developed with the aim of facilitating international trade.
2.3 The 1998 Telecommunications reform
In line with Europe's joint liberalisation effort to introduce full competition in the provision of
all Telecommunications services and of Telecommunications infrastructures, the new
Telecommunications Law of 30 April 1997 came into effect on 1st January 1998.  This Law also
governed the transfer of powers for the management  of the radiofrequency spectrum including the
licensing of its use from the PTT to an independent regulatory body.
This transfer of competencies to the specially created Federal Communications Commission
in 1998 was required to ensure the impartiality in the management of various critical issues linked
with the process of liberalisation (e.g. licensing of cellular radio operators, numbering, fixing
conditions on disputed interconnection agreements, universal service obligation…).G/IT/10
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Along with this major reform the technical regulations for Radio and Terminal Equipment
have undergone a further shift towards extended industry self-regulation, lowering administrative
costs to the industry, and allowing for the unilateral recognition of the qualified and harmonised
product compliance certification procedures established in the member states of the European
Economic Area, while maintaining a necessary level of requirements on the integrity of equipmentand on the quality of basic voice telephony services.
This recognition scheme has been further extended by an appropriate bilateral mutual
recognition agreement on conformity assessments with Canada.
The benefits from this deregulated environment to users and industry became evident in the
form of lower prices, greater choice of products and service offers and better quality.
2.4 Specific regulatory instruments for Radio- and Terminal Equipment
2.4.1 Essential requirements
In order to clearly determine the scope of applications of technical regulations, the European
Union's concept of "Essential requirements" was adopted in Switzerland.  This widely recognised
concept, has been designed to cover all typical risks related to public interest that the legislation and
regulation intends to protect.
Following the logic of removing trade barriers and hence maximising economic welfare, the
Swiss Government has unilaterally adopted these essential requirements in Swiss regulations after
having consulted economic actors and social partners.
In the context of Terminal Equipment such requirements are presently typically encompassing
the protection of networks, the quality of basic voice telephony and the efficient use of the radio
spectrum.
As mentioned in chapter 3.1, such values are subject to modifications due to technological
and social changes.  A new set of essential requirements has been decided upon by the European
Parliament in January 19991.  These requirements are also intended to become the future base of
conformity assessment in Switzerland.
2.4.2 Standardisation
OFCOM is developing technical regulations2 with a maximum use of technical standards
produced by internationally recognised standardisation bodies, such as the EuropeanTelecommunications Standardisation Institute, ETSI and the International Telecommunications
Union, ITU.  OFCOM is also actively participatin g in these international bodies in their management
as well as in the process of developing standards.
This approach was chosen because the application of widely recognised technical standards
provides for a high level of legal certainty with regard to the application of the aforementioned
essential requirements.  Furthermore, government market surveillance of the industries' compliance to
these requirements is facilitated.
                                                     
1 DIRECTIVE 99/5/EC of the European Parliament and of the Council relating Radio Equipment and
Telecommunications Terminal Equipment and the Mutu al Recognition of their Conformity (RTTE-Directive)
2 Technical Regulations can be found on OFCOM's website: http://www.bakom.ch/.G/IT/10
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2.4.3 Management of conformity assessment
In addition to the concepts of essential requirements and standardisation, conditions for
reliable conformity assessment procedures are necessary.  The key elements in this respect are the
building of confidence through competence and transparency, and the setting-up of a comprehensivepolicy and framework for conformity assessment.
For the past twelve years, the development of these processes have dramatically evolved as
follows:
- Before 1992, the Swiss monopoly operator conducted all conformance testing and
acted as a certification body for type approvals of radio and terminal equipment.
- After 1992, the responsibility for conformity assessment has been assumed by
OFCOM, which acts as an independent cert ification and approvals body.  At the same
time, the market for conformance testing was opened to include private laboratories.
- With the 1998 Telecommunications reform, the market for testing and certification
has been completely opened to private enterprises.  Moreover, the option of
conformity assessment by appropriately qualified manufacturers has been introduced.
- To objectively assess the laboratories' and certification bodies' competency,
Switzerland has instituted an accreditation system in accordance to international
guidelines in 1996.  The accreditation, which is delegated to the Swiss Accreditation
Service, SAS
3, provides for a fair and objective evaluation of market entrants, which
in turn ensures fair competition in this industry.
This step, along with the recognition of certain conformity assessment results performed by
equivalently accredited foreign conformity assessment bodies, significantly helped reducing time and
costs for conformance-testing.  Confidence in the equivalence of foreign accreditations is established
by mutual recognition agreements between corresponding accreditation bodies or similar
arrangements.
3. The next step
3.1 Pressure for further change
Starting mid-1990s, there was growing awarene ss that the existing technical infrastructure
was approaching a new era because of:
- the globalisation of the world economy;
- deregulation of key sectors, such as of telecommunications in 1998;
- the increasing awareness of the need for markets to rely on standards;
- rapid technological development, shortening product development times;
- the blurring of boundaries between services and technologies (including
radiocommunications, telecommunications and information technology); and
- the limited government resources for management of technical issues.
In view of these new challenges to industry and government, the conformity assessment
regime adopted with the first Telecommunications Law of 1991 and modified in the course of the
                                                     
3 The website of the Swiss Accreditation Service (SAS) can be found at: http://www. sas.admin.ch/.G/IT/10
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1998 Telecommunications reform quickly started to  show some inadequacies originating from its
philosophy with regard to the following:
- Strong reliance on a priori market access controls (classical type approval
philosophy) not making use of the industries' capabilities and the potentials of thepost market surveillance;
- Historically-based imbalance in the application of regulations for network equipment
on the one hand and for users terminals on the other hand.  The reason is that when
the conformity assessment regime philosophy was conceived, public
telecommunications telephone operators still were state monopolies and had a lot of
influence in the conception of regulation;
- Lack of harmonisation of conformity assessment procedures with other related
sectors, where the responsibility for conformity assessment has been placed with
manufacturers for decades;
- Extensive use and dependency on very detailed technical regulations, whose
development is time consuming.
3.2 The concept
In response to these findings, OFCOM examined  the fundamentals of technical regulation in
co-operation with expert bodies in the neighbouring European Countries.  This resulted in:
- a move away from pre-market interventions by Government or by authorised
institutions;
- greater supplier responsibility – reinforced by an increased level of post-market
regulatory action by Government;
- more extensive utilisation of the two instruments of the manufacturers' liability
obligations and safeguard measures as a deterrent against non-compliance;
- last but not least, the extensive shift from today's strict regime of detailed technical
regulations towards using the industries' cap ability to interpret essential requirements
in the absence of existing standards.  This feature is particularly prone to induce
innovation of new products and technologies.
From this analysis, a new concept of regulation is being developed in close co-operation with
economic actors, users and our main trading partners.
This concept will appropriately incorporate the four key findings of the above analysis, such
as the mentioned greater supplier responsibility.
While catering for the industries' needs as mentioned hereafter, this compliance structure
however retains some minimal dependence on regulato ry intervention in certain key areas in order to
fulfil community expectations concerning:
- efficient allocation and use of the radio spectrum;
- health and safety;
- a number of further needs, such as the pr otection of networks, the interworking, the
provision of features for the disabled or the protection of privacy; and
- ensuring a fair competition in the supply of telecommunications equipment.
Also, all economic actors, industry, Telecommunications services providers and users will be
benefiting from significantly improved product offers and reduced market entry barriers due to:
- faster time to market for new products;G/IT/10
Page 7
- minimised cost of demonstrating compliance; and
- extended recognition of foreign conformity assessment procedures.
3.3 Action plan
OFCOM plans to start the public consultation on a proposal for new regulation in the fourth
quarter of 1999.  Its entry into force is scheduled for the end of the first quarter of the year 2000.
4. International relations
With a view to maximise the variety of telecommunications technology available to our
domestic market and in order to promote international trade according to the widely accepted
principles of the World Trade Organisation, Switzerland is currently conducting a number ofnegotiations on mutual recognition agreements in the field of conformity assessment.
This type of agreement was first conducted with Canada and came into effect 1
st May 1999.G/IT/10
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ANNEX A
LEGAL FRAMEWORK TIME LINE SITUATION
Telegraph and Telephone Law 1922 Department's monopoly on Post
and Telecommunications;controls the supply of services,
equipment and acts as a
regulatory body
First Telecom Law of 21 June19911992 Creation of OFCOM as the
telecommunications regulatory
body. Partial liberalisation of
value-added services andterminal equipment. Conformity
assessment by OFCOM
Second Telecom Law of30 April 19971998 Full competition in the
provision of all
telecommunications services
and infrastructures.  Transfer of
OFCOM's responsibilities of
important licensing and other
critical issues to the newlycreated independent
Communications Commission.
Market for conformity
assessment of terminal
equipment open to all qualifiedbodies including self-
assessment by appropriately
qualified manufacturers.
Proposal for a new Governmentdecree2000 Scope of application of
suppliers' declaration of
conformity extended to all radio
and terminal equipment.Extensive reduction of technical
regulations – standards
providing for presumption of
conformity.
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