Ministers signal support for continued ex-ante regulation of the sector but question whether telecoms and cloud providers should face the same rules
The Council has provided political guidance on meeting Europe’s digital infrastructure needs
On 6 December 2024, the Council of the EU – currently under the stewardship of a Hungarian presidency – approved conclusions on the EC’s digital infrastructure White Paper. This has been keenly debated by the Member States’ telecoms ministers, although they seemingly harbour a smaller appetite for reforming the sectoral framework than has been proposed by the EC and championed in the recent Draghi and Letta reports. According to Zoltán Kovács (Hungarian Minister of State for International Communication and Relations), the conclusions provide “clear political guidance on what Europe needs in terms of digital infrastructure” to improve its competitiveness and address current and future challenges. The Council states that it has sought to take stock of the progress made at the European level and to convey a comprehensive set of messages on fostering innovation, ensuring security and resilience, promoting fair competition and driving infrastructure investment. Noting the evaluation of the (poor) state of the EU’s telecoms sector outlined in the White Paper as well as by Letta and Draghi, the Council invites the EC to conduct a detailed analysis of any future policy proposals bearing in mind the overarching principles of competitiveness, competition and consumer welfare.
Support for ex-ante regulation of telecoms, while not necessarily aligning rules with those in place in the cloud computing sector
The conclusions cover a range of key issues for the bloc, acknowledging the significant private investment needed to deliver on the Digital Decade targets, highlighting the importance of high-quality connectivity to the EU economy and its citizens, and suggesting the EC considers further measures to promote the security, resilience and integrity of critical submarine cables. In terms of regulation specifically, the Council emphasises that the scope for ex-ante control on certain access markets needs to be maintained, stresses that regulation of the telecoms industry should proportionately address both supply- and demand-side factors, and points to the proper functioning of the IP interconnection market (potentially signalling a lack of support for pursuing the introduction of network usage fees). The Council also recognises that connectivity and computing are converging, and that players from different segments of the value chain would benefit from a level playing field; however, it pushes back against the notion of ‘same service, same rules’, stating that convergence does not necessarily imply that equivalent regulation should apply across the piece. In addition, the text briefly touches on consolidation, which it says could help generate economies of scale and present new opportunities for operators, but underlines that any potential deal must be weighted against the expected impact on competition. The Council is therefore notably more cautious about advocating in-market consolidation than Draghi or Letta, while also being somewhat unenthusiastic about the EC’s vision for creating pan-European operators, which the Council considers has been proposed without considering the effect on competition in individual Member States and on operators that are unable to operate across borders.
Industry groups representing tech firms and altnets have welcomed the conclusions
While some stakeholders, including Connect Europe (formerly ETNO) and the GSMA, have remained silent so far on the EU telecoms ministers’ conclusions, others have voiced their support. DOT Europe – which counts Apple, Amazon, Google, Meta and Microsoft among its membership – considers it encouraging to see the Council “stand its ground” and reject calls for regulatory intervention where evidence is lacking (i.e. in the IP interconnection market). Similarly, the European Competitive Telecommunications Association (ECTA) – representing altnets across the bloc – has welcomed the conclusions. ECTA is particularly buoyed by the Council’s support for preserving ex-ante regulation while cutting red tape, rather than for politically-motivated deregulation “without robust technical justification”. It is “confident” that the EC will take the conclusions into account in its forthcoming actions. Alongside a review of the European Electronic Communications Code (EECC), one of the EC’s next steps will be drafting a new Digital Networks Act to reduce bureaucracy around, and spur investment in, the rollout of high-speed broadband. This will be led by Henna Virkkunen (EVP for Tech Sovereignty, Security and Democracy), who has taken over responsibility for telecoms from former Commissioner Thierry Breton.
