The EC’s attempt at a policy reset is full of promise, but it will be up to the next Commission to deliver it
A forward-looking, investment-friendly framework
On 21 February 2024, the EC unveiled its much anticipated digital infrastructure white paper, which analyses the challenges Europe currently faces in the rollout of future telecoms networks and presents 12 possible scenarios to attract investment, foster innovation, increase security and achieve a true digital single market. Through this initiative, the EC has launched a consultation (open until 30 June) to collect views of stakeholders. The white paper is the first stage in the journey towards a ‘Digital Networks Act’, a draft of which is expected by the end of the current Commission’s mandate in October, but will be left to the next cohort of policymakers to determine how and what to take forward. It also follows the announcement of a political agreement on the Gigabit Infrastructure Act (GIA) and the EC’s adoption of the Gigabit Recommendation to form a wider ‘connectivity package’.
Measures that will appeal to former incumbent operators
The white paper – which was leaked extensively – summarises well the frequently heard challenges facing the telecoms sector, including concerns about a significant investment gap, poor financial performance and vendor restrictions driven by geopolitics. To meet future digital infrastructure needs, the EC has outlined three key priorities (in which its 12 potential proposals sit):
Creating the “3C Network” of connected collaborative computing to drive the EU’s technological capacity;
Completing the digital single market, which could involve rethinking the application and objectives of the bloc’s current regulatory framework; and
Secure and resilient digital infrastructure for Europe that protects the value of research and investment activities.
Notable in the second pillar is the possibility that the EC considers, in view of a full fibre environment, recommending no markets for presumptive ex-ante regulation. Former incumbents will likely cheer the prospect of measures to loosen wholesale access obligations (as well as any move that accelerates copper switch-off), building on the contents of the controversial Gigabit Recommendation.
Significant effort will be required to finally deliver a single market for telecoms
Industry has been broadly welcoming of the EC’s play, with ETNO calling the white paper a “step in the right direction” and urging bold and ambitious policy action. Delivering an integrated single market remains an acute challenge and something that has failed to materialise despite the focus and efforts of Commissioners past and present. It would be optimistic to believe that the EC will be able to overcome this long-standing hurdle without some new and potentially radical intervention – which at first glance the white paper doesn’t provide. Also, anyone that expected the EC would pledge definitive support for in-market consolidation may feel disappointed. The EC discusses the opportunities for cross-border consolidation and “different forms of cooperation upstream”, although this may be of little comfort to those looking to merge to address domestic challenges – in particular profitability.
It’s not all good news for big tech
The term ‘large traffic generator’ that featured in the exploratory consultation on ‘fair share’ from February 2023 seems to have now disappeared from its vocabulary. The EC even states that end users are the ones that generate internet traffic, suggesting that the recent fixation with the notion may have subsided. Nevertheless, the EC hasn’t entirely ruled out the scope for policy interventions in future should commercial disputes arise over the delivery of internet traffic. It has promised (again) its intention to level the playing field between the telecoms and cloud industries. While the idea of direct payments to operators to finance network rollouts may have fallen by the wayside, certain actors could still find themselves captured by a broadening of the current rulebook.
