The European telecommunications industry had high expectations for the planned Digital Networks Act. Large digital platforms such as Netflix, Google, and Meta were to contribute more to the costs of expanding the European network infrastructure, as their data-intensive services account for a significant portion of data traffic. However, based on the information currently available, it appears that this goal will not be implemented in the form originally discussed.
According to a report by the international news agency Reuters, the European Commission is apparently not planning a regulatory framework with binding levies or fines running into billions. Instead, the Digital Networks Act is to focus on voluntary cooperation, dialogue formats, and non-binding guidelines. The presentation of the regulatory framework is announced for January 20. If this approach is confirmed, the Digital Networks Act would differ significantly from other European digital laws.
In comparison, the Digital Markets Act and the Digital Services Act pursue a much stricter regulatory approach. Based on these regulations, the European Commission has already imposed heavy fines on large technology companies. Among those affected were Apple, Google, and Meta. The sanctions were in the high three-digit million range and were intended to curb market abuse and anti-competitive practices. As things stand, no comparable enforcement is planned for the Digital Networks Act.
Political tensions in transatlantic relations are considered a possible reason for the more cautious wording of the law. Under former US President Donald Trump in particular, the US government repeatedly criticized European digital laws as being unilaterally directed against American companies. A dialogue-oriented approach could aim to reduce these tensions. Whether this will lead to actual cooperation among the companies concerned or limit the effectiveness of the law cannot be verified at this time.
According to the European Commission, the overarching goal of the Digital Networks Act is to strengthen Europe’s competitiveness and stimulate investment in telecommunications infrastructure. The law is to be presented by the EU Commissioner for Digital Affairs, Henna Virkkunen. The specific details are then to be worked out jointly with the member states and the European Parliament. Changes and refinements are therefore possible in the further legislative process.
A key component of the regulations concerns the allocation of radio frequencies. In the future, the European Commission will have greater influence over the terms of spectrum licenses used for mobile networks, wireless communications, and broadcasting. The aim is to achieve greater harmonization of allocation conditions and pricing models within the 27 EU member states. Frequency auctions will remain an important source of revenue for national budgets.
In addition, the Digital Networks Act provides new guidelines for fiber optic expansion. National regulatory authorities are to align themselves more closely with European requirements. At the same time, member states are to be given the option of postponing the shutdown of existing copper networks beyond 2030 if the expansion of the fiber optic infrastructure is not yet sufficiently advanced.
Conclusion
Based on current information, the Digital Networks Act takes a significantly more moderate approach than previous European digital laws. Instead of binding financial obligations for large platform operators, the EU appears to be focusing on voluntary cooperation and political coordination. Whether this approach will be sufficient to secure long-term investment in European network infrastructure cannot be conclusively assessed at this time.
