EU Digital Networks Act Sparks Industry Battle Over Spectrum, Copper Phase-Out, and Network Fees

The European Commission has unveiled its long-awaited Digital Networks Act (DNA), a sweeping proposal designed to harmonize telecoms regulation across the EU and create a single market for connectivity. The legislation, published this week, seeks to address Europe's lagging position in network investment compared to regions like the US and China. However, the ink is barely dry, and the proposal is already drawing fierce criticism from industry bodies who argue it either oversteps or fails to adequately address the sector's fundamental challenges.

The core ambition of the DNA is to stimulate investment in modern networks by reducing administrative burdens and creating a more unified regulatory landscape. To achieve this, the Commission proposes several key measures. First, it aims to establish an EU-level spectrum authorization framework, shifting control from national regulators to a centralized EU body. This is intended to streamline the process for operators seeking licenses across multiple member states, reducing fragmentation and complexity.

Second, the legislation mandates a Europe-wide phase-out of copper networks in favor of fiber optics, with a proposed deadline between 2030 and 2035. This move is designed to accelerate the transition to high-speed broadband infrastructure, though it will require significant investment from operators and could face resistance in regions where copper remains economically viable.

Third, the DNA introduces a single authorization for satellite services, facilitating the rollout of direct-to-device satellite phone communications. This is seen as a critical step for expanding connectivity in remote areas and supporting emerging technologies like satellite-based IoT and emergency services.

By modernizing the regulatory framework, the Commission argues that companies will be able to redirect resources from compliance to investment. Additionally, the proposal includes a voluntary cooperation mechanism between connectivity providers and other players, such as content, application, and cloud providers, to "facilitate dialogue on technical and commercial arrangements."

This last point has sparked immediate backlash from the Computer & Communications Industry Association (CCIA), which represents major American tech firms including Amazon, Google, Meta, Cloudflare, eBay, Pinterest, and Apple. The CCIA alleges that the voluntary mechanism is a "backdoor policy" designed to allow telcos to charge network access fees—a controversial idea that was previously shelved after a 2023 consultation.

The CCIA warns that the proposed conciliation procedure "could turn into a binding IP dispute-resolution system, effectively resurrecting the widely rejected network fees." Such a system, they argue, would enable telcos to extract unjustified revenues from popular online services, ultimately harming consumers and undermining net neutrality principles.

On the other side of the debate, the GSMA, which represents mobile network operators, contends that the DNA proposals are insufficient to address the lack of investment holding back European telecoms. In a statement, the GSMA noted that "aside from far-reaching proposals on radio spectrum policy, it is now clear that many of the reforms originally promised have unfortunately been left on the table, and that the DNA proposal represents regulatory evolution where revolution is required."

The GSMA points out that Europe is nearly seven years into the 5G era, yet deployment continues to trail behind the US and China. This lag, according to the GSMA, stems from an unfavorable investment environment caused by regulatory complexity. "While Europe's mobile operators continue to invest heavily in critical digital infrastructure, they do so with ever-diminishing returns... at present, they are not able to invest enough to ensure Europe's digital capabilities catch up and keep pace with other major territories," the association stated.

The DNA proposal now enters the legislative process, moving through the European Parliament and Council for approval. If adopted, it will replace the 2018 EU Electronic Communications Code. The Commission's goal, as stated by EVP for Tech Sovereignty, Security and Democracy Henna Virkkunen, is "a digital environment where new technologies are readily available, affordable, and grounded in fair trustworthy rules that benefit people."

The debate over the DNA highlights the fundamental tension in European telecoms policy: balancing the need for investment in next-generation infrastructure with the interests of consumers, content providers, and operators. The outcome of this legislative battle will have profound implications for Europe's digital future, shaping how connectivity is funded, regulated, and delivered across the continent.

For further details on the proposed legislation, you can review the European Commission's official page on the Digital Networks Act (note: this is a placeholder link; the actual URL would be provided upon publication). The GSMA's statement on the DNA offers the operators' perspective, while the CCIA's analysis outlines the tech industry's concerns.