The European Commission has set out plans to reshape Europe’s telecommunications framework through its proposed Digital Networks Act, an initiative designed to stimulate investment in next-generation connectivity while addressing structural weaknesses in the region’s fragmented market.
Presented as part of a wider digital competitiveness strategy, the legislation aims to modernise rules governing fixed and mobile networks across the bloc. Policymakers argue that Europe’s telecom sector remains too divided along national lines, limiting scale and discouraging long-term capital deployment in fibre and 5G infrastructure. By streamlining regulation and easing certain consolidation rules, the proposal seeks to create stronger operators capable of funding the networks required for an increasingly data-intensive economy.
A Push for Scale in a Fragmented Market
European telecom executives have long argued that heavy regulatory burdens and strict competition rules have constrained profitability and slowed infrastructure upgrades. Compared with the United States and parts of East Asia, Europe operates with a higher number of network operators across multiple jurisdictions, often competing within relatively small domestic markets.
The Digital Networks Act attempts to address this by simplifying cross-border operations and reassessing how wholesale access obligations are applied. Supporters believe that allowing operators to achieve greater scale could accelerate fibre roll-out and improve 5G coverage, particularly in rural areas where investment returns are less immediate.
The proposal reflects growing concern in Brussels that digital infrastructure underpins not only consumer connectivity but also industrial policy. Cloud services, artificial intelligence deployment and advanced manufacturing increasingly rely on resilient, high-capacity networks. Without substantial upgrades, Europe risks falling behind in foundational digital capability.
The Fair Share Debate
Yet the reform has prompted renewed controversy over the so-called “fair share” debate. Several large telecom groups have argued that major technology platforms, whose services generate significant data traffic, should contribute more directly to network funding. The Commission has previously consulted on this issue, drawing sharp opposition from digital rights groups and some member states.
Critics of the new Act warn that altering the regulatory balance could weaken net neutrality protections or entrench dominant telecom incumbents. They argue that Europe’s digital ecosystem depends on open access and competitive markets, not merely larger operators. Civil society organisations have also cautioned against policy shifts that could indirectly raise costs for consumers or smaller online services.
Infrastructure at the Centre of AI Policy
The timing of the proposal is significant. Europe is simultaneously advancing artificial intelligence regulation and exploring industrial strategies for AI deployment. High-performance data centres and edge computing facilities depend on robust network backbones. In that context, digital infrastructure is increasingly viewed as strategic.
The challenge for Brussels is to encourage investment without diluting competition principles that have shaped the single market for decades. The Digital Networks Act places infrastructure firmly at the centre of Europe’s technology policy. Whether it succeeds in unlocking capital while preserving openness will determine how effectively the continent builds the digital foundations of its next phase of growth.
