The Digital Network Act: what (not) to expect

There is a lot a speculation in the market about the Digital Networks Act (DNA) the European Commission will be presenting before Christmas this year. Reportedly, the Commission is still weighing the options. Next to what we’ve read, here’s what we heard from the Commission during conferences and one-to-one conversations:

• Key elements: general authorisation, spectrum assignment, access regulation, remedies and copper-switch-off.
• The Commission notes that resilience is becoming an issue of vital importance that is not addressed in the Electronic Communications Code (EECC).
• The proposal for the DNA will be complemented by the review of the EECC and the evaluation of the Body of European Regulators for Electronic Communications (BEREC).
• The EECC is not prepared for cloud connectivity, as set out in the Call for Evidence: “In a context where the digital connectivity landscape is changing rapidly with convergence of telecom, satellite, cloud and edge technology, driven by virtualisation and AI, the EU will only be able to achieve those objectives through a more harmonised legal environment across the EU that avoids inconsistent national administrative practices or implementation conditions that limit the opportunities of the single market”. The Commission openly said that this is the preferred way forward.
• The Commission sees little improvement in terms of copper switch-off. The Commission wants to simplify the process and: “to accelerate copper switch-off by providing a toolbox for fibre coverage and national copper switch-off plans, and by setting an EU-wide copper switch-off date as default, along with a derogation mechanism to protect end-users with no adequate alternatives.” The Commission sees this as a very important topic.
• In terms of access, the Commission notes that there are opposing sites in terms of ex ante and post regulations. The Commission wants to stimulate the use of symmetric access which has seen little take-up since its introduction in the EECC. Duct access is seen by the Commission as an important topic that is well covered in the Gigabit Infrastructure Act that will not be affected by the EECC review and the DNA. Duct access is primarily considered as a symmetrical tool. Unsurprisingly, the Commission seems to favour option 1 in the Call of Evidence: ‘to apply ex-ante regulation (i.e. access conditions at national level) after the assessment of the application of symmetric measures (e.g. Gigabit Infrastructure Act or other forms of already existing symmetric access) only as a safeguard, following a market review based on the existing three criteria test and a geographic market definition, and subject to the review of the Commission, BEREC and other NRAs, with the Commission retaining veto powers.’ BEREC is taking the diverging opinion that duct access should be an asymmetric tool as part of the DNA to be included in the Relevant Market Recommendation: “Removing or weakening one of the two intervention pillars, for instance by prioritising symmetric over asymmetric measures, could lead to inefficient market structures.’’
• The Commission may decide to abolish the Relevant Market Recommendation after all. The current Recommendation stems from 2020 and includes “wholesale local access provided at fixed location” and “wholesale dedicated capacity.” When reducing to zero the designated markets in which national regulators can intervene, they will need to apply the three-criteria-test to the full extent in order to apply remedies in the relevant market. BEREC takes the view that “The EC should bear in mind that the removal of the Recommendation on relevant markets, based on deregulation trends in certain Member States, would create significant challenges for NRAs in other countries where one or more of the national markets still need regulation on the basis of the specific national circumstances.
• The Commission is considering merging the Open Internet Regulation with the DNA.
• With regard to spectrum, the Commission wants to introduce a general authorisation regime and more harmonisation of national access conditions. With only 2% take-up of 5G standalone connectivity, Europe is running behind the US (24%) and China (75%). An option is to include satellite connectivity. The Roaming Regulation will not be affected.
• About the so-called high-risk vendors, the Commission initially considered to address the topic in the DNA. The Commission is seen to have changed its position and is reported to present an ICT supply chain security toolbox, in parallel with the 2020 5G security toolbox for mobile networks.

The Commission is in the process of drafting the Impact Assessment accompanying the proposal for the DNA, with close involvement of European Commissioner and Executive Vice-President Henna Virkkunen. You may prepare for an interesting read during the Christmas break.