The Senate has come out in favour of further liberalisation of the telecommunications sector, removing part of Swisscom's "last mile" monopoly.
The debate was overshadowed by last week's controversial announcement by the government that it wants to sell off its majority stake in the telecoms company.
On Wednesday the Senate narrowly approved (18-15) the opening up to competition of the right to connect households to exchanges using copper-cable infrastructure.
However, it went against a parliamentary commission recommendation calling for the lifting of Swisscom's monopoly over new last mile technologies such as fibre optic links.
The last mile is Swisscom's final remaining monopoly. All fixed line telecoms customers in Switzerland, regardless of their service provider, still have to pay the company a monthly access charge.
Swisscom argued that unrestricted access to this interconnectivity service would discourage major investments in infrastructure.
The new law would empower the government to withdraw the licence of any provider after two years if it failed to invest in its own infrastructure.
Ahead of the vote, the Senate rejected a motion from the centre-left Social Democrats to postpone the debate. They claimed the liberalisation step would further weaken Swisscom.
Members of the Social Democratic Party and the centre-right Christian Democrats labelled last week's announcement as a "communications disaster".
The Senate will hold an urgent debate on December 15 to discuss the government's strategy regarding Swisscom.
The government said last Thursday that it wanted to sell off its entire 66 per cent stake in the telecoms firm.
A day later, it was revealed that ministers had recommended a veto on any future foreign acquisitions by Swisscom until the privatisation issue was resolved.
swissinfo with agencies
The Senate voted on Wednesday to liberalise part of the "last mile".
The last mile is the final leg of delivering connectivity from a communications provider to a customer.
It is typically seen as an expensive challenge because "fanning out" wires and cables is a considerable physical undertaking.