You localize the Macintosh Portable Modem through the use of an external
line adapter (DAA) that plugs into the generic modem board (installed
through the back panel).
There is a different DAA whose hardware complies with the different country
regulations and which identifies itself to the main board, thereby enabling
country-compliant pieces of firmware to control the modem ("automatic
communication parameters configuration").
So, the purpose of the two switches is to provide four adjustable transmit
levels. They are set in the same position at the factory for all countries.
Transmitted levels comply with each country's regulation.