Ahead of inevitable reform of Europe’s telecoms framework, the ‘pro-competition’ collective of challengers and regulators is providing a strong rebuttal to the arguments of former incumbents
Predictably, many large operators support an overhaul of the European framework, with challengers and regulators more keen to preserve the status quo
The EC’s Digital Networks Act (DNA) Call for Evidence has attracted significant attention, generating 326 separate responses from interested parties. Having analysed input from several key stakeholders, it is unsurprising to see Connect Europe, Orange and Telefónica aligned in their desire to see considerable deregulation, including the removal of ex-ante access obligations, as well as a new binding requirement on large tech firms to negotiate with telecoms operators for IP interconnection services (the advancement of the so-called ‘fair share’ debate). Meanwhile, the European Competitive Telecommunications Association (ecta) has stressed the importance of access regulation, urging the EC not to dismantle the current system in favour of “vague, untested alternatives”. Regulators (the Body of European Regulators for Electronic Communications (BEREC) and Germany’s Monopolies Commission) are similarly unenthusiastic that the EC might remove ex-ante regulation. While there is some agreement with Europe’s largest operators on simplification and on improving clarity around the Open Internet Regulation, neither BEREC nor the Monopolies Commission sees cause for mandated network usage fees. Both ecta and BEREC also highlighted the strong performance of the region’s telecoms sector (for example, in terms of levels of competition and investment), contradicting the line of argument presented by the EC over the past two and a half years.
Connect Europe urges the EC to go further in its plans for regulatory simplification
Connect Europe’s response suggests that the DNA should focus on competitiveness, regulatory simplification and single market harmonisation as its core principles. On simplification, it argues that although the EC’s vision for the simplification of some rules is necessary, a wider review of the regulatory framework is needed, specifically calling for the repeal of the universal service obligation (USO). On spectrum policy, it supports calls for longer or indefinite licences and flexible authorisation models while cautioning against the use of unified EU assignment procedures and timetables. On competitiveness and ensuring a level playing field, the trade body argues there is an imbalance in the internet value chain between operators and large content and application providers (CAPs), calling for them to be forced to negotiate some form of network fees. The response also recommends that the EC issue new guidance on the Open Internet Regulation (OIR) and suggests keeping this separate from the DNA. Lastly, it urges the EC to repeal the significant market power (SMP) framework within the European Electronic Communications Code (EECC) and the ePrivacy Directive 2009, arguing that these are too sector-specific and that they do not take new technologies into account effectively.
Orange aligns with peers on areas such as spectrum policy, while making specific comments on the regulation of satellite providers
Orange’s response calls for “deregulation by default” with a safety net in place to allow the EC to tackle “local fixed very high capacity network (VHCN) monopolies”. It opposes proposals for both a single European access product and a mandatory 2030 deadline for copper switch-off (despite already working towards that timeframe itself in France), considering that such “one-size-fits-all approaches disregard market specificities” and could hinder investment. Regarding spectrum, Orange supports greater harmonisation and coordination across the EU, as well as longer licence durations, with minimum 40-year terms, and automatic renewal of existing licences, when license obligations are met. In perhaps an unsurprising alignment with Connect Europe, France’s former incumbent believes the DNA should address the growing imbalance between operators and large CAPs, calling for an obligation on large CAPs to negotiate with operators for interconnection and IP data transport services, and the activation of a dispute mechanism in case negotiations fail. Interestingly, Orange also wants the EC to establish a level playing field for satellite constellations used for accessing the EU market with the terrestrial mobile networks, and to have the EC’s powers strengthened rather than new ones be given to BEREC.
Telefónica’s recommendations centre around reducing the regulatory burden on the telecoms sector
Similarly to Orange, Telefónica’s response claims that the current framework is no longer fit for purpose and warrants a “comprehensive overhaul”. It argues that the DNA must enable scale, promote resilience and align with EU industrial policy, going beyond the EECC to create a regime that supports fair competition and balanced relationships across the digital ecosystem. Telefónica’s position has been outlined in eight recommendations:
Access regulation: Repeal the SMP framework and Recommendation on Relevant Markets, only imposing ex-ante obligations where there is not effective competition;
Spectrum policy: Prioritise spectrum efficiency over revenue generation, with longer or indefinite licences, simplified renewals and/or cashless tender models;
Level playing field: Require CAPs and hyperscalers to negotiate IP interconnection/data delivery terms with operators, with a dispute resolution mechanism to ensure equitable outcomes;
Regulatory simplification: Deliver deeper simplification across all regulatory areas, including eliminating redundant obligations, streamlining permit procedures and distinguishing between consumer and business users in the DNA;
USO: Remove “unnecessary obligations” and instead use targeted public subsidies (e.g. vouchers) to support vulnerable end users;
End user protection: Move from sector-specific rules to a principles-based approach aligned with robust horizontal consumer protection laws;
Repeal of obsolete regulations: Repeal the ePrivacy Directive as well as price controls on roaming, termination rates and intra-EU calls; and
Security and cybersecurity: Avoid overlapping obligations and ensure a consistent implementation across Member States.
ecta is concerned the EC is not taking the views of BEREC and Member States on board, warning that it must not risk the bloc’s regulatory credibility
Ahead of the deadline, ecta published a joint statement with several other industry bodies representing altnets and access seekers, including the AOTA in France and BREKO and VATM in Germany, as well as MVNO Europe. The statement claims that the EC is pursuing a “downgrade” of the bloc’s sectoral framework that supports wholesale access, competition and technological progress, presenting four main lines of argument:
The EU is making progress with the rollout of fibre and 5G networks (although adoption is low), and the current situation “does not constitute a crisis” that would justify weakening the SMP-based regime;
The EC’s interesting in symmetric measures and intention to “relegate” SMP-based regulation is questionable and would represent a “blanket approach” that captures all operators regardless of their market power;
The Gigabit Infrastructure Act (GIA) would be an inadequate substitute for the EECC and could lead to reduced access to ducts and poles, harming competition; and
Replacing the EECC with an untested system of generalised symmetric rules would undermine the EU’s regulatory credibility, in turn damaging its reputation as a destination for investment as well as its international competitiveness.
ecta claims that responses to previous consultations, including those from BEREC and Member States (via the Council of the EU), have not been addressed, and it calls for the EC to: abandon plans to replace access regulation with symmetric measures via the GIA; preserve the ex-ante, SMP-based regulatory framework under the EECC without dilution or reinterpretation; and uphold the principles of legal clarity, proportionality and competition, which have served Europe and its citizens so well.
BEREC warns of the potential effects of deregulation and consolidation on investment, innovation and consumers
BEREC’s response addresses two parts of the Call for Evidence. Firstly, echoing ecta, BEREC states that ex-ante regulation has opened up “structurally monopolistic markets” to new players, enabling competition and investment in VHCNs, and delivering lower prices for telecoms services in Europe than in the US. It adds that a softening of competition policy, for example on in-country consolidation, could harm investment, innovation and consumer welfare, which would be detrimental to European competitiveness overall. Secondly, BEREC reflects on the policy objectives and options outlined by the EC:
Simplification: This term should not be confused with deregulation. While there is room for redundant and outdated provisions to be reconsidered or updated, sector-specific rules should remain in place, especially to protect end users;
Spectrum: Harmonisation of technical standards, equipment and spectrum availability helps deliver connectivity and exploit economies of scale, although spectrum management is predominantly a national matter;
Level playing field: The OIR remains effective and fit for purpose, and enables solutions such as network slicing – although BEREC would be open to providing greater certainty in this area;
Access regulation: Any premature withdrawal of ex-ante asymmetric regulation in markets that are not fully competitive yet could reverse positive market trends. BEREC is cautious on the removal of all markets from the relevant EC Recommendation and concerned by the concept of a pan-European wholesale access product; and
Governance: BEREC’s current two-tier structure is working and it is eager to build on this (with some proportionate changes while safeguarding independence) to assume new institutional responsibilities.
Germany’s Monopolies Commission supports efforts to simplify rules, but cautions against recommendations for network fees and deregulation
The Monopolies Commission’s response sets out its position that defining telecoms markets at the European level is not realistic or viable, arguing that end users continue to operate primarily in national and regional markets. The Commission argued that market consolidation in the sector would lead to higher prices and worsened service for consumers throughout its response. The Monopolies Commission’s response can be summarised as follows:
Level playing field: The scope of existing telecoms legislation should not be expanded to include cloud services, no form of network fees should be introduced as this would lead to increased bureaucracy and the EC should issue new guidance on the OIR to account for more specialised services;
Access regulation: Existing ex-ante regulation should not be replaced with single, EU-wide regulation due to key differences in national markets, the EC’s Recommendation on Relevant Markets should not be repealed but updated regularly and an EU-wide copper switch-off date should not be imposed;
Spectrum: The EC should go ahead with bloc-wide harmonisation in spectrum assignment procedures and auctions, but should ensure an efficient use of spectrum through the continued use of auctions. National regulators should also be required to demonstrate that wholesale access obligations are unnecessary if the number of spectrum usage rights is limited; and
Simplification: Simplification provisions are welcomed, particularly for the streamlining of spectrum authorisation regimes, but further measures should be introduced to remove procedural bureaucracy within regulators.
