With this post, we continue a series focused on the Digital Networks Act, in which we will present Telefónica’s perspective on how to ensure that the regulatory framework helps drive innovation and growth in the European Union telecommunications sector.
The Digital Networks Act is a key opportunity to strengthen Europe’s digital future
Europe has set ambitious goals for competitiveness, technological sovereignty and digital leadership. Achieving them requires not only investment in networks, but also a regulatory framework that reflects today’s digital reality.
The proposed Digital Networks Act (DNA) is therefore a unique opportunity to modernise telecom regulation and ensure Europe can compete globally in advanced technologies and next-generation connectivity. Telecommunications networks are the foundation of this digital ecosystem, making a strong telecom sector essential for Europe’s economic growth, resilience and technological autonomy.
Two areas deserve particular attention during the DNA negotiations: the Open Internet Regulation (OIR) and the ePrivacy framework.
Rules designed for the past are limiting Europe’s future
The digital ecosystem has changed dramatically over the last two decades. Yet both the Open Internet Regulation and the ePrivacy Directive largely reflect a regulatory approach designed for an earlier phase of digital services and the internet.
The result is an asymmetric framework that primarily applies to telecom operators, while many digital platforms and online service providers are not subject to equivalent obligations. This creates an uneven playing field and places telecom operators at a competitive disadvantage despite being the companies investing in Europe’s connectivity infrastructure.
The ePrivacy Directive illustrates this challenge. Designed for a 2002 communications environment that no longer exists, it now operates alongside the GDPR, which already establishes a robust and comprehensive framework for the protection of personal data across the economy. Maintaining a separate sector-specific regime for telecommunications creates duplication, fragmentation and legal uncertainty, while limiting telecom’s ability to offer innovative services.
The same applies to the Open Internet Regulation. While the objective of protecting users remains essential, the current framework does not adequately reflect technological developments such as 5G Standalone, network slicing and advanced digital services. As a result, innovation opportunities are constrained exactly when Europe needs them most.
Innovation and consumer protection can go hand in hand
Modernisation should not be seen as a reduction of consumer safeguards. On the contrary, it is an opportunity to create rules that are both protective and innovation-friendly.
For example, updating the privacy framework could help operators deploy more effective anti-fraud solutions and respond faster to evolving cyber threats. Consumers would benefit from stronger protection against scams while maintaining robust privacy safeguards.
Likewise, greater flexibility of the Open Internet Regulation would allow operators to offer innovative connectivity services tailored to different customer needs. Technologies such as network slicing can support advanced industrial processes, connected healthcare, immersive applications and other services requiring differentiated performance levels while allowing monetization of 5G investments.
These capabilities are already becoming central to digital transformation worldwide. Europe should ensure that its regulatory framework enables their deployment rather than creating uncertainty and strong restrictions around their use.
Europe needs legal certainty to support investment
Innovation requires confidence and legal certainty. However, the current framework often creates uncertainty due to differing interpretations and implementation across Member States and non-binding regulatory guidance that has been fully contradicted by later judicial decisions.
For European operators, this can mean designing services according to the most restrictive national interpretation – limiting the ability to scale innovative offerings across the Digital Single Market- or even prioritizing alternative opportunities with better and more certain business prospects. Such uncertainty increases compliance costs, reduces investment incentives and slows innovation.
A practical reform agenda
Telefónica believes the Digital Networks Act should seize this opportunity through targeted reforms.
1. Repeal of the ePrivacy Directive
The ePrivacy Directive should be repealed in its entirety, given that the GDPR already provides a horizontal framework applicable to all actors in the digital ecosystem. The principle of confidentiality of communications must continue to be guaranteed, but through technologically neutral rules that apply uniformly to all economic actors.
This approach would help eliminate regulatory asymmetries and enable all players in the digital ecosystem to innovate equally in digital services and business models, in line with the priorities identified by Telefónica for the DNA.
2. Modernisation of the Open Internet Regulation
The Open Internet Regulation (OIR) should evolve toward a more principles-based model that preserves users’ rights while simultaneously enabling technological innovation.
The reform should:
· Provide greater flexibility for reasonable traffic management.
· Strengthen legal certainty for the provision of innovative 5G services. In this regard, the European Commission could provide guidelines for the application of the Open Internet Regulation that include a whitelist of specialized services compatible with the Open Internet Regulation, thereby providing greater regulatory certainty to the market for the provision of specialized services based on network slicing.
· Clarify that business-to-business (B2B) services fall outside outside the scope of regulations originally designed for consumer protection.
Europe should not miss this opportunity
The Digital Networks Act can become a cornerstone of Europe’s competitiveness agenda. To achieve this objective, regulation must evolve alongside technology.
Modernising the Open Internet Regulation and derogate ePrivacy to rely on a coherent horizontal framework would reduce regulatory asymmetries, foster innovation, improve legal certainty and strengthen investment incentives. At the same time, consumers would continue to benefit from strong protections based on principles that apply consistently across the entire digital ecosystem.
A call for action
Europe needs modern rules for a modern digital economy. By updating the Open Internet Regulation and removing outdated sector-specific ePrivacy Directive, the Digital Networks Act can help unlock innovation, strengthen Europe’s telecom sector and support the continent’s competitiveness and technological sovereignty for the years ahead.
In our next post, we will examine the reconciliation mechanism put forward by the Digital Networks Act.
