The Council Conclusions’ Evidence-based Approach Can Boost Europe’s Digital Infrastructure Competitiveness

Over the past few years, the European Commission has been closely examining the state of Europe’s connectivity sector. Starting with an exploratory consultation in 2023, followed by the White Paper on “How to master Europe’s digital infrastructure needs?earlier this year, the Commission continued to gather insights and propose methods to strengthen Europe’s connectivity and digital ecosystem.

A key point of contention has been the idea of introducing network usage fees, where Very Large Online Platforms (VLOPs) or Content and Application Providers (CAPs) would pay telecom operators for the traffic their services generate. Despite being justified as a way to help telecom providers cover the costs of infrastructure upgrades, the tech industry strongly opposed this proposal from the outset. Such a system would distort the market and ultimately result in higher costs for consumers and businesses. While the White Paper correctly moved away from the network usage fees proposal, other issues remained that would lead to similar negative outcomes for European internet users and EU competitiveness.

Two main concerns stood out:

  • The potential for indirect network usage fees via regulation of the IP interconnection market through dispute resolution mechanisms that could lead to indirect charges for consumers and businesses using traditionally free applications; and

  • A “convergence” proposal to bring cloud services under the same regulatory framework for last-mile telecom services.

Both proposals, lacking thorough impact assessments, risked undermining a well-functioning ecosystem. Such a regulatory expansion could lead to unnecessary complexity and regulatory burdens and overlaps, that could hinder Europe’s digital growth. Stakeholders, including small telecom operators, tech companies, consumers, and national regulators, made it clear that these proposals would have jeopardized the affordability, availability, and competitiveness of Europe’s digital services rather than improving.

What about the Council Conclusions?

The Council Conclusions, set for formal adoption on 6 December, set a path toward a balanced and pragmatic approach to any regulatory intervention within the current legislative framework. The Conclusions address key concerns raised throughout the broader debate on Europe’s digital infrastructure and reflect a shift towards evidence-based, collaborative, and forward-looking policy development.

First, the Conclusions emphasize the importance of impact assessments. Before introducing any regulatory measures, the Council calls for a thorough evaluation of their potential effects. This is a critical step in ensuring that future policies won’t disrupt well-functioning markets or unintentionally harm innovation.

The Council also pushes back on the concept of convergence between telecom and cloud services, challenging the notion that these sectors should be regulated under the same legislative framework. By questioning the “same service, same rules” principle, reiterated by the Draghi Report, the Council underlines the importance of avoiding any unintended consequence on adjacent sectors and recognizes the unique dynamics of different sectors in the digital infrastructure realm. In this regard, the conclusions call for more detailed definitions and a nuanced analysis of the concepts of cloudification and virtualization of networks

On the IP interconnection market, Member States recognize the expertise of national regulatory authorities in resolving disputes and reject the need for new interventions that could inadvertently generate a system resembling network usage fees. This pragmatic stance ensures that the well-established and functional mechanisms supporting internet traffic remain robust and reliable as they have been for decades with minimal regulatory interference.

Finally, in line with Europe’s broader goals, the conclusions stress the importance of prioritizing critical areas like green digitalization and the security of critical infrastructure. These issues, including the security of subsea cables, align with Europe’s broader ambitions for sustainability and resilience. By highlighting these priorities, the Council draws attention toward areas that will strengthen Europe’s long-term competitiveness and its ability to meet the Digital Decade targets and of which 91proÊÓÆµ is a full supporter.

The Council’s approach is a win for everyone who relies on Europe’s digital infrastructure. Whether it’s for everyday internet access, business operations, or the future of digital services, these decisions will have long-term implications. As 91proÊÓÆµ, we’ve long advocated for policies that encourage competition, innovation, and sustainability while ensuring that Europe remains a global leader in digital connectivity. We are pleased to see that the Council is taking a practical, evidence-based approach - one that prioritizes the interests of consumers and a diverse set of businesses.

Looking at the new EU mandate

There is still much to be done, but the Council’s conclusions set a solid foundation for the future. Policymakers must remain clear-eyed and focus on reducing regulatory and administrative barriers, supporting sustainable technology, and ensuring digital infrastructure security. Together, through strong public-private collaboration, industry and government can foster a more connected, secure, and resilient digital Europe that benefits everyone.

Tags: Telecom