The European Union is at a decisive juncture in its programme of economic and technological reforms, at a time when its ambitions regarding gigabit connectivity, 5G/6G, resilience and technological sovereignty require a stable regulatory framework conducive to long-term investment. Against this backdrop, the EU’s forthcoming Digital Networks Act (DNA) represents a key opportunity to modernise telecoms regulation in Europe. However, for this reform to have a real impact on investment and competitiveness, it is essential that the proposed improvements – particularly regarding spectrum – remain effective over time. In the absence of such progress, the other measures in the DNA will have a limited impact on electronic communications operators and on society as a whole.
- Policy Brief: Digital Networks ActENG Policy Brief – Digital Network_V4PDF | 5 MB
Telefónica presents the policy brief “Digital Networks Act: a reset for European competitiveness beyond telecommunications”, a document which analyses the DNA proposal, identifies its main opportunities and challenges, and sets out the company’s priorities and proposals in strategic areas for the sector.
Positive aspects of the proposal
Telefónica welcomes some of the proposed objectives set out by the European Commission in the Digital Single Market (DSM) strategy, in particular those relating to the reform of the radio spectrum, given that the proposal introduces elements that could improve legal certainty and encourage long-term investment.
Among these, we highlight the proposal for spectrum licences to be of indefinite duration, the automatic renewal of licences by default, and greater European coordination regarding the allocation and fees for the reservation of radio spectrum, as well as spectrum reservation prices. However, the current proposal still has areas for improvement that are essential if the DNA is to fully achieve its objectives.
Five priorities for more effective and forward-looking regulation
1. A stable and investment-friendly regulatory framework
The radio spectrum is an essential resource for the development of next-generation mobile networks and for driving the development of advanced digital services. Therefore, in order to encourage investment, it is essential to ensure a stable, predictable and long-term framework, guaranteeing its effective implementation over time.
Telefónica therefore proposes that the new provisions on spectrum included in the DNA be applied immediately to licences expiring before 2035, thereby avoiding transitional periods that would prevent the new framework from being applied to the majority of licences expiring in Europe in the coming years and averting the risk of spectrum auctions being conducted solely for the purpose of raising revenue. Furthermore, should the authorities consider that exceptions to the automatic renewal of licences may be made, we ask that these be strictly limited to exceptional and duly justified circumstances. Without these improvements, from a practical point of view, progress on the proposed spectrum policy will be insufficient and will negatively affect the overall impact of the DNA.
2. Access regulation and the transition from copper to fibre
Regulation of access to fixed networks must provide the competent authorities with the tools to tailor their analysis and the imposition of obligations to the competitive situation regarding network infrastructure in each market.
Thus, the new framework should completely move away from the ex ante regulatory regime in markets such as Spain, where there is significant infrastructure competition, whilst at the same time providing tools to impose obligations in cases where there is no competition in the market, precisely to guarantee access to networks through competitive wholesale offers. The aim of all this is to ensure that end-users have a variety of offers and multiple options. We also consider that the new measure proposed by the Commission, based on the imposition of a harmonised wholesale product at EU level, does nothing to improve the framework and should therefore not be incorporated into it.
With regard to the migration from the copper network to fibre optics, Telefónica in Spain has been a pioneer in the phasing out of the copper network, completing this process in 2025 in a gradual and planned manner, prioritising the continuity of service provision to both end customers and wholesale customers. Telefónica therefore believes that the migration from copper to fibre must be driven by market dynamics themselves. In this regard, the copper phase-out must be contingent upon the actual availability of fibre, whilst ensuring throughout the process that the conditions for wholesale access to the networks are not distorted. For this reason, at Telefónica, we advocate against setting a copper phase-out date at European level, as a forced phase-out of the copper network that is out of step with market realities could weaken wholesale and retail competition, particularly in markets such as Germany, where fibre roll-out remains limited and effective competition has yet to be achieved.
Furthermore, Telefónica considers it essential to move away from price control policies and, in particular, cost-oriented policies in wholesale markets, as these discourage investment in new infrastructure and represent an obligation from the past that is no longer justified.
The remaining priorities of the DNA are important for improving the regulatory environment, but their effectiveness will depend largely on the structural issues being properly resolved, in particular spectrum and access regulation.
3. Modernising the rules on the open internet and privacy
The European regulatory framework must evolve in step with technological innovation. The current open internet rules and privacy regulations for the communications sector were designed for a digital ecosystem and technological context very different from today’s, and are hindering the development of new digital services.
Telefónica proposes modernising open internet regulation to enable the commercialisation of advanced 5G use cases, by relaxing the conditions that foster innovation, always for the benefit of businesses and end-users. It also considers it necessary to repeal the ePrivacy Directive, due to its overlap with the General Data Protection Regulation (GDPR), and to move towards horizontal frameworks adapted to the current digital ecosystem.
4. Addressing imbalances in the digital value chain
The exponential growth in data traffic has shaped the current architecture of the Internet and driven capacity increases in the fixed and mobile networks of electronic communications operators. Asymmetries in bargaining power between telecoms operators and major digital traffic generators have led to an imbalance between these two types of players in the value chain. In the DNA proposal, the Commission has put forward mechanisms based on voluntary participation and a conciliation mechanism.
Telefónica considers that this approach is insufficient to correct structural imbalances. It therefore advocates for binding negotiation and dispute resolution mechanisms that ensure fair and reasonable terms are reached between the parties and contribute to greater symmetry amongst stakeholders within the European digital ecosystem.
5. Simplifying security and resilience obligations
The security of digital infrastructure is a strategic priority for Telefónica and for Europe as a whole. However, the Commission’s proposal on resilience clearly overlaps with other regulations.
Telefónica advocates better alignment of the DNA with existing horizontal frameworks, such as NIS2 and the Critical Infrastructure Resilience Directive (CER), thereby avoiding duplication of sector-specific obligations that could create unnecessary regulatory burdens.
More coherent regulation would make it possible to strengthen security without adversely affecting the sector’s operational efficiency or investment capacity.
Regulation geared towards the coming decade
The Digital Networks Act represents a unique opportunity to strengthen Europe’s digital competitiveness. However, its success will depend on its ability to adapt to the new era, in particular through an ambitious and workable reform of spectrum policy and the repeal of sector-specific privacy obligations.
Telefónica will continue to contribute to the debate to ensure that the regulatory framework drives investment, innovation and European digital leadership, all for the benefit of European citizens.
