The urgency and necessity of the new Digital Networks Act

Given the geopolitical relevance of home-grown digital capabilities, both in terms of connectivity infrastructure and services, and the need to revitalise European competitiveness, the Digital Networks Act (DNA) should be a legislative priority in the new EU 2024-2029 cycle. The European Commission´s White Paper is a crucial first step, but Europe must recognise the urgency and relevance of this legislative proposal.

The urgency and necessity of the new Digital Networks Act
Juan Montero

Juan Montero Rodil

Reading time: 4 min

Following the debate at the Informal Telecoms Council on Friday 12 April, it is necessary to expresses support and commitment to the objectives outlined at the end of the Council, while stressing the importance of giving a clear sense of urgency and executive focus to an action plan that will make it possible to close the gap in the short-term future of Europe’s digital connectivity compared to the main regions of the world.

European society cannot afford for the Council of 21 May to be just another exercise in analysing the situation and expressing general wishes. In order to respond to the needs of the EU and of each of its Member States, the Council of 21 May must give an executive and concrete impetus to a Digital Network Act that really gives Europe the opportunity to be a world-class player in terms of the connectivity infrastructures that our industry, supported by an appropriate regulatory framework, must put at the service of European citizens, businesses and governments.

An accurate diagnosis in the White Paper

Telefónica welcomed the European Commission’s White Paper for its accurate vision of the present and future of the sector, reflecting the clear need for a forward-looking approach.

In the White Paper, the Commission has made a precise diagnosis of the present and future situation in Europe in terms of the availability and security of its digital connectivity infrastructures. To this end, it has undertaken an enormous effort of analysis and open stakeholder participation that lasted for several months in 2023. The European Commission´s analysis examines the challenges Europe currently faces in the deployment of future connectivity networks and presents possible scenarios for attracting investment, fostering innovation, increasing security and achieving a true Digital Single Market.

The outcome of the White Paper is both a major challenge and a major concern in terms of economic security and strategic autonomy. The White Paper is a crucial step towards a more secure and prosperous European digital future.

The telecoms sector as a lever for European Single Market

In the same vein as the White Paper, the report presented by Enrico Letta, former Prime Minister of Italy and President of the Jacques Delors Institute, addresses a crucial debate on the future of the Single Market and the measures needed to revitalise its promise on the occasion of its 31st anniversary.

Enrico Letta highlights in his report the urgent need to unite markets, simplify regulation and allow European companies to reach the right scale.

In this context, it is essential to establish a sound regulatory framework that fosters innovation and competitiveness in the digital communications sector. In pursuit of this objective, a well-focused Digital Networks Act becomes even more relevant to make the European telecommunications sector a lever for progress towards the achievement of the European single market.

A new essential instrument to face the challenges of the sector: DNA

The telecommunications sector is facing major challenges in terms of market structures and regulatory paradigms. The new regulatory instrument proposed by the European Commission, the Digital Networks Act (DNA), if it addresses the current imbalances in depth, will be essential to address the problems of scale in the sector, the need for a new regulatory paradigm and a level playing field that allows new business models to emerge. This instrument is not only necessary, but urgent.

Telefónica would like to stress the urgency with which this new legislation must be addressed. Delaying this process and opting for inaction will have detrimental effects not only on the telecommunications sector, but also on the competitiveness of all European economic sectors and on their security and defence capabilities. These effects are already visible today in the European economic environment. The Digital Network Act (DNA), with a well-targeted and bold approach, is essential to address these problems and foster innovative business models that will boost economic growth and European competitiveness.

The Digital Networks Act must serve as the means to achieve the necessary solutions that the sector and the European digital society needs. Among these solutions, the law should allow operators the necessary freedom to reach the appropriate scale that the size and characteristics of each national market require to enable the necessary profitability in each Member State, so that they can then consider the opportunity to extend their reach to other European member states. In other words, where necessary, accept first in-market consolidation and then cross-border consolidation within the Single Market. It should also review spectrum policies to encourage the deployment of new networks, it should adopt a deregulatory approach taking as its starting point the competitiveness of telecommunications markets and, in those circumstances, the non-necessity of applying ex-ante regulation, and it should ensure a level playing field between all companies present in the different segments of the digital value chain.

Given the geopolitical relevance of digital leadership and the urgency of revitalising European competitiveness, the Digital Networks Act (DNA) should be a legislative priority of the new EU 2024-2029 cycle.


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