EU’s Digital Networks Act faces industry criticism over limited reforms and blurred competition rules

The European Commission’s draft Digital Networks Act aims to overhaul telecom governance across the EU, but industry stakeholders and analysts warn it falls short of transformative change, risking regulatory stagnation amid fierce debate over investment incentives and market competition.

The European Commission’s draft Digital Networks Act seeks to recast how telecoms, satellites, cloud and related services are governed across the EU, concentrating powers at Brussels while promising a single rulebook intended to spur investment and cut red tape. According to the Commission’s proposal, obligations would apply directly across Member States rather than being transposed into national law, and a Single Passport Authorisation would allow providers to notify just one member state to operate across the bloc. (2)(7)

Industry reaction has been sharply critical about what many see as a timid reform rather than the transformative reboot some advocated. The GSMA warned the draft “would leave the connectivity industry continuing to struggle to secure the investment needed to underpin the continent’s growth, innovation and security,” calling the package “evolution where revolution was required.” (4)(5)

Independent analysts echoed that assessment. “The European Commission’s Digital Networks Act is a surgical intervention rather than the ‘game-changing’ revolution promised in the [Thierry] Breton era,” said Luke Kehoe, Industry Analyst at Ookla, noting the draft shifts spectrum governance and satellite authorisation powers to EU level yet falls short on other measures operators sought. (1)(2)

A major flashpoint is how the DNA handles hyperscalers and content platforms. Telecom operators pushed for binding “fair share” arrangements that would make large traffic generators pay for the network costs they impose; the draft instead proposes an EU-led framework for ecosystem cooperation and a voluntary conciliation procedure coordinated by BEREC, a move critics say defers rather than settles the dispute. “So-called ‘large traffic generators’ face no binding fees,” Kehoe observed. (1)(3)(7)

Some commentators argue the voluntary route will reframe commercial incentives rather than regulatory confrontations. “The more interesting shift is commercial. With regulatory solutions off the table, telcos will need to rethink how they capture value – moving beyond connectivity alone,” said Simon Dumbleton, CTO for World Wide Technology (via55), pointing to potential partnerships, bundled services and new billing models as likely responses. (1)(4)

Consumer and competition advocates sounded separate alarms. BEUC welcomed the codification of consumer rights but warned simplification must not erode protections or weaken national regulators’ ability to police markets, while CCIA Europe and others cautioned the draft risks reintroducing regulatory complexity and even resurrecting network-fee debates through its dispute mechanisms. (3)(2)

The DNA also presses ahead with measures to harmonise spectrum and space rules. The proposal for EU-level satellite authorisation and a European Table of Allocation of Satellite Frequencies aims to reduce fragmentation and support European LEO ambitions, and it would allow longer or indefinite licence terms with regular reviews alongside new spectrum-sharing obligations. Kehoe praised the satellite and spectrum elements as the boldest parts of the draft but warned Member States will feel a serious loss of autonomy. (1)(7)

Questions remain over whether BEREC is the correct body to oversee expanded duties. Critics have previously accused BEREC of limited transparency and of privileging certain stakeholder groups; Strand Consult’s founder John Strand told Mobile Europe that giving it larger responsibilities should be contingent on demonstrable reform, arguing “we need a new organisation, to reimagine, recreate and rebrand BEREC to make it fit for purpose.” (1)(2)

The legislative road ahead will be tortuous. The draft now moves to the European Parliament and the Council, where member states, consumer groups, hyperscalers and telecom interests will seek amendments on sovereignty, competition, investment incentives and enforcement. Industry leaders and trade associations insist the final text must better balance harmonisation with incentives for private investment if Europe is to regain momentum in digital infrastructure. (5)(3)

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Source: Noah Wire Services