The European Union’s telecom regulations are entering a pivotal moment, especially with the anticipated introduction of the Digital Networks Act (DNA) in 2025. Following the resignation of Thierry Breton, former EU Internal Market Commissioner, who led the charge for telecom reform, the direction of the new regulations is likely to shift under the guidance of Finland’s Henna Virkkunen, now in charge of technology and telecom. Breton, a former CEO of France Telecom, was a strong advocate for the “fair-share” idea, which proposed that big tech companies like Netflix and Google pay for the use of telecom infrastructure. However, with Virkkunen at the helm, the future of EU telecom laws is far from clear.
In this blog post, I’ll break down the key issues at stake, how the overhaul of telecom rules might change, and what it means for telecom operators, tech giants, and consumers.
1. What is the Digital Networks Act?
The Digital Networks Act (DNA) is a proposed overhaul of the EU’s telecom regulations that aims to address longstanding issues with connectivity, spectrum management, and investment in the telecom sector. The DNA is seen as a successor to the European Electronic Communications Code (EECC), which governs telecom networks and services.
One of the core ideas initially championed by Thierry Breton was the “fair-share” contribution model. This would require large tech platforms to contribute financially to telecom infrastructure, which they rely on for services like video streaming and cloud computing. The telecom industry largely supported this idea, arguing that tech giants use massive bandwidth but don’t invest in the underlying infrastructure.
2. The Impact of Thierry Breton’s Departure on the Digital Networks Act
With Breton’s departure, the future of the fair-share proposal is in question. The initial consultation, which closed in June 2023, revealed a wide range of opinions. On one side, telecom companies like Deutsche Telekom and Orange argue that tech companies should pay their share of the infrastructure costs. On the other side, tech companies such as Netflix and Google argue that they already invest heavily in content delivery networks (CDNs) and should not be double-charged for access to the same infrastructure.
Without Breton’s leadership, the balance may shift. Henna Virkkunen has been tasked with focusing on investment in digital infrastructure, which may indicate a pivot toward incentivising investment without imposing extra financial burdens on tech companies.
3. What Can We Expect From Henna Virkkunen’s Leadership?
Henna Virkkunen, a former European People’s Party MEP, has a track record of supporting technology and digitalisation. In her mission letter, Commission President Ursula von der Leyen directed Virkkunen to work on the DNA with a focus on boosting secure high-speed broadband for both fixed and wireless networks. Her mandate also stresses the need to encourage investments in digital infrastructure.
This shift towards investment-focused policies may imply a softening of the “fair-share” approach, which could result in tech companies being relieved of the pressure to contribute directly to telecom infrastructure costs. Instead, there might be an emphasis on simplifying the regulatory framework and reducing barriers to infrastructure investment.
4. The Role of Member States and the Draghi Report
The debate over EU telecom laws isn’t just happening in Brussels—it’s playing out in national governments too. Hungary, which currently leads the ministerial meetings, is pushing for conclusions by the end of 2024. Most of the 27 EU member states have expressed scepticism about the need for additional rules, preferring to keep existing telecom regulations intact.
The Draghi report, which calls for increased investment in digital infrastructure, aligns with this more moderate approach. According to the report, EU competitiveness is at risk without stronger investment in digital networks. This reinforces the message that the DNA should focus on incentivising investment rather than creating financial obligations for online services.
5. Key Industry Reactions
The telecom and tech sectors remain divided over the direction of the Digital Networks Act.
-
Alessandro Gropelli, Director General-designate of Connect Europe (formerly ETNO), representing telecom operators, believes that the incoming DNA must adopt a new competition approach to ensure a level playing field for all companies. He points out that, without significant regulatory reform, EU telecom companies risk losing out to tech giants, impacting the EU’s global competitiveness.
-
On the other hand, Constantin Gissler, Director General of DOT Europe, representing online services, welcomes the removal of the “fair-share” obligation. He believes the focus should be on simplifying the regulatory framework and addressing real barriers to investment in telecom infrastructure, such as overregulation and market fragmentation.
6. Consumer Concerns: Higher Prices and Reduced Competition?
From a consumer perspective, there are real concerns about the direction the Commission might take. Claudio Teixeira, Legal Officer at the European Consumer Organisation (BEUC), warns that more concentration and deregulation of the telecom sector could lead to higher prices and less competition.
Teixeira argues that what the EU telecom market needs is merger control and competition safeguards, not deregulation that favours a few large companies. Consumers, he says, could end up paying more for broadband and other telecom services if the EU follows the US-style market model, where fewer players dominate.
7. What’s Next for the Digital Networks Act?
With the new EU Commission expected to start work by 1 December, the timeline for the DNA remains uncertain. The publication of a detailed plan by early 2025 may be delayed, especially since the EECC is also up for review next year.
The incoming Commission seems set to rebrand the DNA as an investment-focused initiative, in line with the recommendations of the Draghi report. However, the debate over whether to impose costs on tech companies for their use of telecom infrastructure is far from over.
The future of the Digital Networks Act will largely depend on the new Commission’s ability to balance the interests of telecom operators, tech companies, and consumers.
Conclusion: Will the EU Telecom Law Stay on Course?
The resignation of Thierry Breton leaves a power vacuum that could shift the EU’s approach to telecom regulation. Henna Virkkunen’s leadership will likely see a focus on encouraging investment in digital infrastructure while ensuring high-speed broadband for all. However, the fate of the contentious “fair-share” proposal remains uncertain, with significant pushback from the tech industry and consumers concerned about market consolidation.
As we look ahead to 2025, one thing is clear: the debate over how to modernise EU telecom laws is just beginning, and the outcome will shape the future of digital networks across the continent.
Title: What’s Next for EU Telecom Laws Without Thierry Breton? A Look at the Future of the Digital Networks Act
The European Union’s telecom regulations are entering a pivotal moment, especially with the anticipated introduction of the Digital Networks Act (DNA) in 2025. Following the resignation of Thierry Breton, former EU Internal Market Commissioner, who led the charge for telecom reform, the direction of the new regulations is likely to shift under the guidance of Finland’s Henna Virkkunen, now in charge of technology and telecom. Breton, a former CEO of France Telecom, was a strong advocate for the “fair-share” idea, which proposed that big tech companies like Netflix and Google pay for the use of telecom infrastructure. However, with Virkkunen at the helm, the future of EU telecom laws is far from clear.
In this blog post, I’ll break down the key issues at stake, how the overhaul of telecom rules might change, and what it means for telecom operators, tech giants, and consumers.
1. What is the Digital Networks Act?
The Digital Networks Act (DNA) is a proposed overhaul of the EU’s telecom regulations that aims to address longstanding issues with connectivity, spectrum management, and investment in the telecom sector. The DNA is seen as a successor to the European Electronic Communications Code (EECC), which governs telecom networks and services.
One of the core ideas initially championed by Thierry Breton was the “fair-share” contribution model. This would require large tech platforms to contribute financially to telecom infrastructure, which they rely on for services like video streaming and cloud computing. The telecom industry largely supported this idea, arguing that tech giants use massive bandwidth but don’t invest in the underlying infrastructure.
2. The Impact of Thierry Breton’s Departure on the Digital Networks Act
With Breton’s departure, the future of the fair-share proposal is in question. The initial consultation, which closed in June 2023, revealed a wide range of opinions. On one side, telecom companies like Deutsche Telekom and Orange argue that tech companies should pay their share of the infrastructure costs. On the other side, tech companies such as Netflix and Google argue that they already invest heavily in content delivery networks (CDNs) and should not be double-charged for access to the same infrastructure.
Without Breton’s leadership, the balance may shift. Henna Virkkunen has been tasked with focusing on investment in digital infrastructure, which may indicate a pivot toward incentivising investment without imposing extra financial burdens on tech companies.
3. What Can We Expect From Henna Virkkunen’s Leadership?
Henna Virkkunen, a former European People’s Party MEP, has a track record of supporting technology and digitalisation. In her mission letter, Commission President Ursula von der Leyen directed Virkkunen to work on the DNA with a focus on boosting secure high-speed broadband for both fixed and wireless networks. Her mandate also stresses the need to encourage investments in digital infrastructure.
This shift towards investment-focused policies may imply a softening of the “fair-share” approach, which could result in tech companies being relieved of the pressure to contribute directly to telecom infrastructure costs. Instead, there might be an emphasis on simplifying the regulatory framework and reducing barriers to infrastructure investment.
4. The Role of Member States and the Draghi Report
The debate over EU telecom laws isn’t just happening in Brussels—it’s playing out in national governments too. Hungary, which currently leads the ministerial meetings, is pushing for conclusions by the end of 2024. Most of the 27 EU member states have expressed scepticism about the need for additional rules, preferring to keep existing telecom regulations intact.
The Draghi report, which calls for increased investment in digital infrastructure, aligns with this more moderate approach. According to the report, EU competitiveness is at risk without stronger investment in digital networks. This reinforces the message that the DNA should focus on incentivising investment rather than creating financial obligations for online services.
5. Key Industry Reactions
The telecom and tech sectors remain divided over the direction of the Digital Networks Act.
-
Alessandro Gropelli, Director General-designate of Connect Europe (formerly ETNO), representing telecom operators, believes that the incoming DNA must adopt a new competition approach to ensure a level playing field for all companies. He points out that, without significant regulatory reform, EU telecom companies risk losing out to tech giants, impacting the EU’s global competitiveness.
-
On the other hand, Constantin Gissler, Director General of DOT Europe, representing online services, welcomes the removal of the “fair-share” obligation. He believes the focus should be on simplifying the regulatory framework and addressing real barriers to investment in telecom infrastructure, such as overregulation and market fragmentation.
6. Consumer Concerns: Higher Prices and Reduced Competition?
From a consumer perspective, there are real concerns about the direction the Commission might take. Claudio Teixeira, Legal Officer at the European Consumer Organisation (BEUC), warns that more concentration and deregulation of the telecom sector could lead to higher prices and less competition.
Teixeira argues that what the EU telecom market needs is merger control and competition safeguards, not deregulation that favours a few large companies. Consumers, he says, could end up paying more for broadband and other telecom services if the EU follows the US-style market model, where fewer players dominate.
7. What’s Next for the Digital Networks Act?
With the new EU Commission expected to start work by 1 December, the timeline for the DNA remains uncertain. The publication of a detailed plan by early 2025 may be delayed, especially since the EECC is also up for review next year.
The incoming Commission seems set to rebrand the DNA as an investment-focused initiative, in line with the recommendations of the Draghi report. However, the debate over whether to impose costs on tech companies for their use of telecom infrastructure is far from over.
The future of the Digital Networks Act will largely depend on the new Commission’s ability to balance the interests of telecom operators, tech companies, and consumers.
Conclusion: Will the EU Telecom Law Stay on Course?
The resignation of Thierry Breton leaves a power vacuum that could shift the EU’s approach to telecom regulation. Henna Virkkunen’s leadership will likely see a focus on encouraging investment in digital infrastructure while ensuring high-speed broadband for all. However, the fate of the contentious “fair-share” proposal remains uncertain, with significant pushback from the tech industry and consumers concerned about market consolidation.
As we look ahead to 2025, one thing is clear: the debate over how to modernise EU telecom laws is just beginning, and the outcome will shape the future of digital networks across the continent.
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Learn More:
- Digital Networks Act (https://www.euractiv.com/section/digital/news/digital-networks-act)
- EU telecom law (https://www.telecompaper.com/news/eu-telecom-law-update)
- telecom operators (https://etno.eu/home.html)
- European Electronic Communications Code (https://digital-strategy.ec.europa.eu/en/policies/european-electronic-communications-code)
- Draghi report (https://ec.europa.eu/commission/presscorner/detail/en/IP_23_3658)
