Digital Networks Act, digital network fees & extending telco rules to digital services: what to expect in 2025?

One of the key agenda points for the upcoming Polish Presidency of the Council of the European Union (starting on the January 1, 2025) will be the Digital Networks Act (DNA). The Polish objective is to have an orientation debate and progress report.

Ursula von der Leyen tasked soon-to-be (if nothing goes wrong on November 12 EP hearings) Commissioner for Technological sovereignty, security, and democracy Henna Virkkunen with renewing the Digital Networks Act:

I want you to take forward the Commission’s work to improve access to secure, fast, and reliable connectivity, as part of a broader strategy for connected collaborative computing. To this end, you should work on a new Digital Networks Act to help boost secure high-speed broadband, both fixed and wireless. You should incentivise and encourage investments in digital infrastructure, taking into account responses to the Commission’s White Paper of February 2024.

The debate between the European telecom and digital services sectors is as diverse as the EU itself, with both sides presenting strong arguments. The outcomes of the consultation on the White Paper for EU's digital infrastructure needs will not make the task of finding a balanced approach easier for EU policymakers either, where 54% of responses being critical, 30% supportive, and 14% mixed or neutral.

What do Europeans have to say about the proposals for digital services & telco?

We covered the topic back in October, raising questions on the necessity and the impact on consumers of both extending telecommunication rules to the digital services sector, as well as reintroducing the concept of ‘fair share’ via new arbitration rules & network usage fees, where content service providers (CAPs) would have to pay for internet service providers (ISPs) as a consequence. 

The European telecom representatives such as Connect Europe remain supportive of the ideas proposed in the White paper, including easier competition rules to help telecoms merge (and scale), regulatory changes to extend their rules to digital services actors, and, essentially, introduce network fees on CAPs: 

Make Europe more competitive in connectivity by achieving scale, promoting industry collaboration and achieving a real Digital Single Market for businesses and consumers.

Promote fairness and correct current asymmetries in the internet value-chain through a dispute resolution mechanism addressing failures in commercial negotiations for data transport as well as by applying the same rules for comparable services.

The messages from the industry are unwillingly mixed - while European telecoms would not mind getting extra investments to facilitate both 5G rollout and other infrastructure needs, claiming they are underfunded and struggling, Euractiv has recently leaked “Deutsche Telekom’s” minutes from their investor meeting, which showcase the real situation is somewhat different:

​​The European debate on Digital Networks Act and the future of European connectivity sometimes even takes truistic forms which are difficult to disagree with. Connect Europe, together with IPOS have recently announced survey results that show:

Hard to disagree with.

While the survey results take a jab at tech companies, stating that Europeans trust telcos more than tech companies, other results showcase the importance of maintaining a competitive and consumer-oriented (price-oriented, too!) model for European connectivity:

We will not question the survey's methodology, even though the responses to the question of 'who should be responsible for keeping telecom services affordable' do not add up to 100%. Nevertheless, the survey shows that the majority - 55% of respondents believe it is the duty of telecom companies themselves, while 45% think it is the government's responsibility too.

Information Labs have recently issued a report examining the proposal from economic, engineering, regulatory, and other perspectives. The report urges EU policymakers to avoid actions that could create irreversible impacts on the European digital economy, such as implementing a 'two-speed internet' or challenging the competitive model for European telecoms that has so far provided good prices and high-quality services for European consumers:

Let's brace ourselves for more engaging opinions and surveys in the coming months.

On our end, we hope the European policymakers can strike a balance between helping European telecoms thrive, while making sure the measures don't backfire on consumers and the European digital economy.