After regulating digital platforms (DSA, DMA), the data economy (Data Act) and artificial intelligence (AI Act), the European Commission is tackling the world of telecoms. The idea? Complete the market digital network of 450 million citizens. The future regulation on digital networks should be completed before summer 2025, after more than a year of legislative process.
To lay the foundations for a broad consultation between the various stakeholders, Margrethe Vestager, European Commissioner for Competition, is due to present a white paper on the subject on February 21, ahead of the Mobile World Congress.
The 35-page preliminary document, which Context was able to consult, reviews the main subjects:
- Relaxation of merger rules to accelerate the consolidation movement in telecoms
- Contribution of tech players to very high-speed networks (“fair share”)
Network cloudification is reshuffling the cards
The Commission takes into account in particular the “softwareization” and “cloudification” of telecoms infrastructures. The virtualization of the lower layers of networks allows operators to free themselves from the underlying hardware adhesion. The ongoing cloudification of 5G networks should also allow telecom operators to benefit from the same economies of scale as cloud providers.
Brussels is, in fact, observing a convergence between:
- Networks
- Electronic communications services
- Cloud infrastructures.
Yesterday’s separation between these three typologies of actors ” will tomorrow be replaced by a complex convergent ecosystem. »
Logically, the authors of the white paper ask themselves “ the question of whether the players in this convergent ecosystem should not be subject to equivalent applicable rules ” and if ” end users, and in particular consumers, should not benefit from equivalent rights. »
They drive the point home by stating that “ Recent technological changes create an opportunity to align electronic communications and cloud services operations with the development of pan-European core network operators. »
Financial and environmental contribution
The opportunity to ask tech players to put their hands in their wallets? While investment needs in connectivity are estimated at more than 200 billion euros in the coming years, Brussels doubts the ability of operators to find the necessary financing.
According to Euractiv, the Commission would adopt the so-called “senders-pay” principle according to which the largest providers of web traffic, such as Netflix, TikTok, Meta or Google, would contribute financially to the maintenance of telecommunications networks in proportion to the traffic generated.
In the same way, all players in the ecosystem should contribute equitably to efforts to reduce the carbon footprint of digital technology. Streaming platforms could in particular inform their subscribers about their environmental impact depending on whether they choose a particular level of video resolution.
A market that is too fragmented
The white paper also returns to the great fragmentation of the European telecoms market. Unlike other regions of the world, starting with the United States, around five mobile operators and more than a hundred fixed operators in the EU coexist. And only a few European operators, such as Deutsche Telekom, Vodafone, Orange, Iliad and Telefonica, are present in several markets.
Faced with this market breakdown, leading to lower levels of profitability, the question arises: the question of whether cross-border consolidation or different forms of upstream cooperation could allow operators to acquire sufficient size, without compromising downstream competition. »
Another handicap highlighted: the excessively high cost of acquiring frequencies with the implementation of auctions in each member state. For better spectrum governance, the Commission consider better coordinating the auction schedule and authorization procedures.