This blogpost is authored by Bruno Liebhaberg, CERRE Executive Chairman.
At the Cyprus Presidency event on “Digital Networks Act — Future-proofing the EU’s digital connectivity”, organised by the Cyprus Presidency of the Council of the European Union and the General Secretariat of the Council, I shared a number of reflections on the opportunities and challenges raised by the DNA proposal. The points below outline some of the key considerations that, in my view, should guide the future development and implementation of the DNA.
A sound basis
- In its DNA proposal, the Commission rightly treats digital connectivity as foundational infrastructure for Europe’s competitiveness, picking up the thread of the Letta, Draghi, and Niinistö reports. I salute, among the DNA objectives, the addition of competitiveness and resilience/preparedness, which were not in the European Electronic Communications Code currently in force.
- One of the clearest findings of CERRE’s 2024 report on the preparation of the DNA is that very different market outcomes coexist under the same European framework, reflecting divergent national implementation. In particular, the implementation of access regulation has varied widely across Member States. Against that backdrop, the choice of a Regulation over a Directive is welcome.
About the Single Market objectives
- Telecom markets are still national in an economic sense. Regulation alone cannot create a single market, but it should, in principle, remove legal obstacles that fragment competitive conditions. However, while specific tools provided for in the DNA — such as the Single Passport authorisation, pan-EU numbering and a standardised wholesale access product — are sensible, they are likely to reduce only modestly cross-border expansion barriers. A measured expectation is that they will help at the margin, provided they do not add disproportionate compliance costs for firms already operating in multiple Member States. We should be realistic: previous single-market instruments (such as roaming, intra-EU call caps) delivered some consumer benefits but did not fundamentally change the industry structure.
- Now, regarding the benefits of the internal market and of consolidation in telecoms, I think that a nuanced approach is appropriate: economies of scale and scope are obvious for satellite and, to some extent, for spectrum; but the situation is different for fixed-based or networks which are local. Moreover, the main internal markets issues are not related to pure telecom networks rules, but to peripheral rules such as those on consumer protection or data retention, which do not depend upon national telecom regulators.
About security concerns and economic regulation
- The forced removal of certain non-EU equipment in the name of security pursues objectives that respond to a precautionary logic (i.e., a low probability but a potentially highly injurious impact). This differs from the proportionality-based logic of economic regulation. For me, because they are related to public interest objectives, which are external to economic regulation, the removal costs should not be silently shifted onto operators as unbudgeted obligations. Where security and/or strategic autonomy justify specific choices, compensation through a transparent funding model, aligned across Member States, would be desirable.
About the governance of the DNA
- The DNA proposal gives quite a bit of powers to the Commission (for instance, through delegated and implementing acts and the extension of the Commission’s veto powers over NRA decisions). This may be problematic as this Commission asserts itself as “geo-political” while regulation should normally be insulated from politics. In my view, there should therefore be here an institutional trade-off: greater centralisation should be matched by effective appeal rights and legitimate NRA discretion where local conditions genuinely differ.
About competition and competitiveness
- The strategy should not be to reduce competition (and increase the monopoly rent as this is the case in the US) but to increase competitiveness. This includes giving shape to a broader notion of competition. Today, competition on quality and innovation deserves as much attention as competition on price. Price-only competition has contributed to the financial fragility now observed across a significant part of the sector.
- Furthermore, the debate around competitiveness and innovation should be shifted from coverage metrics to utilisation and productivity enhancement. Telecom networks are a general-purpose technology with large positive externalities for the wider economy. But the policy debate and targets in Europe have so far been dominated by coverage metrics, while take-up of advanced services remains comparatively weak, and the differentiated productivity impact of different downstream usages has received too little attention. For competitiveness, what matters is not the universal deployment of high-capacity networks per se, but differentiated deployment matched to both demand and achievable returns for telco companies — so that adoption and the development of advanced use cases can translate into measurable impact on overall productivity.
What conditions of success for the DNA?
- The DNA’s success will depend on whether Europe can hold to three disciplines at once :
- predictability for investments (especially on spectrum),
- consistency in implementation across Member States, and
- an efficient and effective balancing of the existing trade-offs between competition, innovation, security and sustainability.
Read the CERRE 2024 Report “Ideas for the Future of European Telecommunications Regulations”: https://cerre.eu/publications/ideas-for-the-future-of-european-telecommunications-regulations/
Watch the full recording of the event, organised by the Cyprus Presidency of the Council of the European Union and the General Secretariat of the Council: https://www.consilium.europa.eu/en/events-gsc/digital-networks-act-18-may-2026/
