The upcoming Digital Networks Act (DNA) represents a unique opportunity to drive a comprehensive and ambitious regulatory reform that addresses the structural and economic challenges of the sector, as we advanced in our previous post.
The current framework, as outlined in the European Electronic Communications Code (EECC), has become obsolete and no longer guarantees sustainable competition or the necessary investments. As a result, in the context of global challenges affecting competitiveness and lower investment returns, Europe has fallen behind other economies.
The new law must establish a modern framework that supports fair competition and balanced relationships throughout the digital ecosystem.
Level Playing Field in the Digital Value Chain: Towards a Principle of Fair Relationship
The European digital ecosystem presents a clear asymmetry, limiting the ability of telecommunications operators to maintain balanced negotiations with all actors participating in the value chain of electronic communications services, such as content and application providers (CAPs) and cloud services providers.
To correct this imbalance, the DNA must incorporate the principle of “fair relationship.” This implies broadening the scope and current obligations to these relevant actors and establishing, for example, the obligation for large CAPs to negotiate with ECS providers fair prices for IP data transport services, along with a dispute resolution mechanism for when negotiations fail.
Driving Innovative Digital Services
The development of technologies such as 5G and network slicing-based services requires a clear and predictable regulatory framework. The lack of certainty regarding the application of the Open Internet Regulation (OIR) is limiting investment and innovation in new digital services.
To provide greater certainty and security, Telefónica proposes that the European Commission publish a recommendation with a non-exhaustive whitelist of specialized services that comply with the regulation. This would give operators more confidence to quickly introduce valuable innovations for businesses and citizens throughout Europe.
A New Access Model to Leave Behind Obsolete Regulations
The access framework based on the concept of Significant Market Power (SMP) contained in the EECC should be repealed, with markets governed by ex post competition law and the Gigabit Infrastructure Act (GIA), along with a safety net in the form of wholesale obligations only in specific cases of real lack of competition.
Telefónica also rejects the creation of a single Pan European wholesale access product, as it would reduce incentives to invest, foster artificial competition, and favor the entry of new players into the market without assuming or sharing investment risk. This would further jeopardize the profitability of networks and weaken Europe’s digital competitiveness.
Spectrum as a Driver of Investment and Growth in Europe
The DNA must define a new spectrum policy in the EU that promotes investment, reduces spectrum costs, and ensures access to new frequencies. To achieve this, it is necessary to:
Strengthen the legal certainty of mobile licenses by making them indefinite or, failing that, of extend their duration to 40 years with tacit renewal. Reduce the total cost of spectrum through allocation processes that prioritize its efficient use and network investment over payments to the treasury and reduce annual fees to align with the administrative cost of management. To meet the continuous growth in demand, it is essential to ensure the availability of new bands such as 6 GHz, 3.8-4.2 GHz, and UHF 10.
To strengthen the digital single market and prevent Member States from deviating from these best practices in spectrum allocation, the European Union should reinforce the peer review process at the European level.
Simplifying Regulation: A Modern and Coherent Framework
The European regulatory framework accumulates rules that no longer respond to current needs, even duplicating obligations through overlapping regulations:
- The ePrivacy Directive, which only applies to telcos, should be repealed, maintaining only the GDPR, a horizontal framework that equally applies to all sectors.
- The regulation on roaming, termination rates, and intra-EU calls should be reviewed, eliminating price controls, which are completely unjustified in the current market. Similarly, Universal Service Obligations (USO) should be converted into measures to support vulnerable users through direct public subsidies via vouchers or coupons.
- Finally, simplification should include reducing reporting obligations and streamlining authorizations and permits. It is also crucial to differentiate between consumers and businesses in the application of end-user rules.
Cybersecurity for a Sustainable Digital Infrastructure
Cybersecurity requires a solid sector with the capacity to invest to address the challenges it faces. To achieve this, it is essential to simplify regulation and improve coordination between and with authorities, adopting a single point of contact and a common format for notifications.
Additionally, any new obligation, including those affecting equipment and supply chain providers, must be proportionate and based on risk and cost/benefit analysis. Only in this way will security be strengthened without limiting innovation or investment.
Including Telecommunications in the EU Taxonomy
The exclusion of telecommunications networks and services from the European taxonomy is unjustified and may limit access to sustainable financing. With the upcoming implementation of the European Green Bond Standard (EUGBS), this absence would hinder investor support for the modernization of key infrastructures towards greater energy efficiency.
Therefore, we encourage the European Commission to recognize the deployment and management of electronic communications networks (ECNs) as a taxonomy-eligible activity in the next review of the Climate Delegated Act in 2025. Including telecommunications in the taxonomy will accelerate Europe’s digital and green transition.
Only a comprehensive and ambitious reform of the current regulatory framework will build a competitive, sustainable, and resilient digital ecosystem capable of strengthening European technological sovereignty and generating tangible benefits for citizens. Thus, the Digital Networks Act represents a historic opportunity to position Europe at the digital forefront.
