Trade groups claim EU’s Digital Networks Act risks “favoring the interests of outdated telecom monopolies”

European Trade groups have hit out at the EU’s proposed Digital Networks Act (DNA) amid concerns the legislation could favor “outdated telecom monopolies”.

The European Commission (EC) set out its proposals for the legislation this week, which aims to modernize, simplify, and harmonize regional rules on connectivity networks.

The Act introduces mandatory national transition plans to phase out copper networks and transition to advanced networks between 2030 and 2035.

Meanwhile, the hope is that by cutting red tape, it will encourage operators to invest in rolling out advanced fiber and mobile networks, and that this will in turn attract investment in AI and the cloud.

"High-performance resilient digital infrastructure is essential in strengthening Europe’s leadership in innovation, competitiveness and digital sovereignty," sad Henna Virkkunen, executive vice-president for tech sovereignty, security and democracy.

"Advanced and accessible connectivity will allow start-ups to harness the potential of AI, enable doctors to care for patients remotely, quickly and safely. Our goal is a digital environment where new technologies are readily available, affordable, and grounded in fair trustworthy rules that benefit people."

Key rules under the Digital Networks Act

Under the proposals, companies will only have to register in one EU country to provide services across the union. There will be incentives for pan-European satellite communication services through an EU-level, as opposed to national level.

The Act will also make national spectrum authorization more consistent by giving operators longer spectrum licenses and by making licenses renewable by default.

This, lawmakers said, will ensure that all available spectrum is being used by imposing a "use it or share it" rule on operators.

Similarly, this will also see the introduction of a voluntary cooperation mechanism between connectivity providers and other players, such as content application and cloud providers.

Opposition is mounting

The proposals have drawn fire from the Computer & Communications Industry Association (CCIA Europe). The Act's voluntary cooperation and dispute management scheme, it said, are unnecessary, as online service providers and telecom operators already cooperate.

The new mechanism would leave the door open for legislative amendments or rulings by national regulatory authorities that could turn it into a binding IP dispute-resolution system, the trade group warned.

That would effectively resurrect widely-rejected network fees, allowing dominant telecoms operators to extract unjustified revenues from popular online services.

“This is not a ‘voluntary conciliation’ procedure, but one that will create new disputes. It risks harming every part of Europe’s connectivity ecosystem," said CCIA Europe’s senior policy manager, connectivity and competition, Maria Teresa Stecher.

“The DNA could have been a real opportunity to simplify EU rules and boost competitiveness. Instead, the Commission now risks doing the opposite – favoring the interests of outdated telecom monopolies over European consumers, innovative online services, and better connectivity. This is not simplification, it is a step backwards.”

The GSM Association (GSMA), a lobby group for the mobile communications industry, echoed the CCIA's concerns over the conciliation process, airing a few additional concerns of its own.

Chief among these are concerns that this will add a new layer of complexity for providers and that aspects of the legislation stem from the "largely outdated" ePrivacy Directive.

"A key priority for the Commission over the past 12 months has been ‘simplification’," it said.

"But we now face the prospect of even more sector-specific rules, additional administrative bodies and reporting obligations, and the retention of unnecessary, redundant or duplicative elements including consumer protection and rules stemming from a largely outdated ePrivacy Directive. This is not simplification, it is complexification."

The proposal will now be presented to the European Parliament and Council for approval.

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