European Commission’s Digital Networks Act to restructure European telecom regulations with indefinite duration spectrum licenses
The European Commission’s forthcoming Digital Networks Act (DNA) aims to restructure the regulatory framework for the telecommunications sector in Europe to stimulate investment. The act indicates the European Commission is avoiding a mandatory levy system or new enforceable duties specifically targeting major tech firms. Instead, the proposal advocates for a voluntary cooperation framework where the largest online providers would engage in discussions moderated by the Body of European Regulators for Electronic Communications (BEREC), which comprises national telecom regulators.
A key component of this revamp, outlined in a draft document reviewed by Reuters, includes the potential allocation of lucrative radio spectrum licenses to telecom providers for an indefinite duration. The proposed legislation, scheduled for presentation by EU tech chief Henna Virkkunen on January 20th, suggests that licenses without time limits could foster a more functional secondary market for spectrum trading and leasing.
To prevent spectrum hoarding, EU regulators have suggested implementing “use-it-or-share-it or lose-it” conditions and specific roll-out obligations, ensuring the resource remains actively utilized and accessible to efficient competitors. The document said: “Spectrum usage rights shall be in principle granted for an unlimited duration….Sufficiently long duration of rights of use of radio spectrum should increase investment predictability to contribute to faster network roll-out and better services, as well as stability to support radio spectrum trading and leasing.”
The draft Digital Networks Act also addresses market dominance by suggesting that companies identified as having significant market power in one specific market could also be designated as such in closely related markets. This designation would subject them to stringent obligations, including enhanced transparency, non-discrimination requirements, and potentially price controls, cost accounting, or accounting separation.
This cooperative approach aligns with the Commission’s prior stance on “network fees.” A July 2025 policy analysis concluded that mandating large online platforms to pay network fees was not a viable mechanism for financing 5G and broadband infrastructure deployment. Nonetheless, the reported DNA draft introduces measures that could significantly impact telecom operators and national regulators. These include addressing spectrum license durations, sales conditions, and a proposed pricing methodology intended to guide national regulators during spectrum auctions—a sensitive area for member states given the substantial revenues generated by these auctions. Furthermore, the text is expected to provide EU-level guidance on fiber infrastructure rollout. A noted element is flexibility regarding the 2030 objective for replacing legacy copper networks; governments may be granted deadline extensions if they can demonstrate a lack of readiness.
Advocates for stronger EU harmonization argue that a unified market is essential for creating viable pan-European investment models, particularly for high-capacity fixed networks and future mobile technologies. Industry groups have consistently called for longer, more predictable spectrum licensing and consistent award conditions across the EU, arguing that national divergences impede deployment and escalate costs.
Critics of increased centralization caution that the DNA could facilitate a transfer of powers away from national regulators and governments.
The Reuters reporting suggests some national regulators may perceive the Commission’s planned interventions in spectrum policy and rollout guidance as a “power grab,” as spectrum management has traditionally remained a core national competence within the existing EU framework. Civil society organizations have raised concerns that attempts to restructure telecom market rules might compromise net neutrality principles or encourage commercial agreements that influence traffic management practices.
The DNA proposal is set against the backdrop of recent major EU digital legislation, including the Digital Services Act (DSA) and Digital Markets Act (DMA). To avoid repeating US criticism that EU rules disproportionately target US-based tech companies, the DNA appears designed to place the largest platforms within a cooperative, rather than compulsory, regime, while focusing binding measures on the connectivity sector’s regulatory architecture.
For large online services, the voluntary framework presents questions regarding incentives and enforcement. While a “best practices” code moderated by regulators can facilitate technical dialogue on issues like network resilience and traffic management, it inherently lacks hard obligations or penalties for non-compliance. Upon official publication, the Commission’s proposal will enter the EU’s ordinary legislative procedure. Core points of contention—including the balance between EU coordination and national discretion on spectrum, and the scope of any obligations placed on large digital firms—will be negotiated by member states in the Council and the European Parliament in the coming months.
If the reported draft details are confirmed, the Digital Networks Act signifies a strategic pivot: moving away from compelling Big Tech to directly finance networks and towards reshaping the existing telecom rulebook, spectrum practices, and infrastructure targets to unlock investment. The legislative negotiations will determine whether this combination is sufficient to accelerate infrastructure deployment without reigniting net neutrality disputes or national sovereignty arguments.
A July 2025 joint statement by consumer and civil society groups urged the Commission to preserve robust net neutrality within the DNA and voiced concerns regarding proposals linked to the “fair share” debate, including ideas for dispute-resolution systems between telecom operators and online services. Hence, Europe’s commitment to the principle of net neutrality is reaffirmed, mandating equal treatment for all Internet traffic by operators, a stance maintained despite industry calls for a less restrictive regulatory environment.
References:
https://eutoday.net/digital-networks-act-draft/
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While the voluntary framework in the EC Digital Networks Act may encourage dialogue, the absence of enforceable obligations raises questions about whether it will truly address the investment imbalance between telecom operators and large online platforms.