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The pending confirmation of new European Commissioners marks an important moment for the EU to reset its digital policy agenda. As MEPs prepare for the hearing of Executive Vice President-designate Henna Virkkunen early next week, one topic that will be front-of-mind will be potential reforms of the telecoms sector.
Caroline De Cock is the Creator & Convenor of Information Labs.
Virkkunen has been tasked with bringing forward a new legislative framework, the Digital Networks Act (DNA), “taking into account responses to the Commission’s White Paper of February 2024”, as her mission letter from Commission President Von der Leyen puts it. A recent analysis of those responses was stark: a majority of submissions to the public consultation opposed the proposals related to networks fees and dispute resolution mechanisms put forward by the Commission. So how should Virkkunen chart a way forward?
Information Labs has been canvassing expert opinion through our Telecoms Time Capsule video repository, summarised in a comprehensive Telecoms Perspectives report, and its conclusions are equally stark and in keeping with recent warnings from Mario Draghi and Enrico Letta about the dangers to European competitiveness from over-regulation and the subsidising of legacy businesses.
This is particularly evident in the recurring debate about mandatory payments from Content and Application Providers (CAPs) to telecom operators – proposals that keep resurfacing under different names like “fair share,” “cost-sharing,” or “dispute resolution mechanisms.”
The evidence against such proposals is unequivocal. The Body of European Regulators for Electronic Communications (BEREC) has repeatedly confirmed that the Internet’s interconnection ecosystem functions effectively, with balanced market dynamics. Two recent European Commission public consultations revealed overwhelming opposition to such intervention, with 67% of respondents explicitly rejecting further regulation of the interconnection market.
Our research demonstrates that Europe’s telecom sector has achieved remarkable success in network deployment and affordability without such measures. The data shows that only a small group of telecommunications incumbents support these proposals, while presenting contradictory narratives – seeking additional revenue streams from policymakers while simultaneously highlighting profitable 5G investments and projected growth to investors.
The EU already has a comprehensive legislative framework in this area. The European Electronic Communications Code (EECC) is due for revision in 2025, though many member states have only recently implemented it. The newly adopted Gigabit Infrastructure Act (GIA) needs time to deliver results. Adding another layer of regulation through the DNA, particularly one that could undermine net neutrality principles, risks creating regulatory confusion and market uncertainty.
Network fees would fundamentally alter the Internet’s architecture, effectively enabling large telecom operators to “double dip” – charging both their customers and the content providers those customers want to access. As Stanford law professor Barbara van Schewick notes, this means getting “paid twice” for accepting and delivering the data its customers request. Similar proposals have been consistently rejected over the past decade by consumer associations, telecom regulators, and think tanks across Europe and beyond as both unjustified and potentially harmful.
The suggestion to integrate cloud providers into telecom legislation similarly lacks empirical support. These providers are already regulated under multiple frameworks including NIS2 and DORA. Claims of “convergence” between cloud and telecom sectors oversimplify the technical reality and ignore the absence of market failure that would justify additional regulation.
Our Telecoms Perspectives report identifies a more pressing challenge: while the rollout of fibre and 5G is progressing well, with sufficient funding to meet the 2030 Digital Decade targets, the real issue lies in demand and adoption. The data shows that too few consumers and businesses are subscribing to advanced connectivity services. This is where policy attention should focus – on digital skills development and initiatives that encourage the adoption of digital services.
The research points to several key priorities for the future:
1. Maintaining an open and interoperable global internet through transparent legal regimes
2. Supporting diverse network players, including startups and municipalities
3. Preserving net neutrality to ensure a level playing field
4. Adopting a consumer-centric approach that prioritises accessibility, reliability, and affordability
5. Enabling hybrid approaches that combine fiber, satellite, and 5G to reach underserved areas.
As national legislative initiatives in France and Italy show a willingness by some to fragment the digital single market with local versions of network fees, the EU must provide clear leadership and stop encouraging legacy business models.
The lessons from both the Draghi report and our report are clear: Europe’s digital future depends on fostering innovation and competition, not creating new regulatory barriers. Executive Vice-President-designate Virkkunen has the opportunity to chart a new course – one that prioritises consumer welfare, digital adoption, and genuine market competition over the interests of a few large telecom operators.
The evidence against network fees is overwhelming, and continuing this debate diverts precious resources from more pressing challenges. It’s time to focus on policies that will truly advance Europe’s digital transformation, driven by evidence and focused on real consumer needs rather than outdated regulatory concepts.
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