The European Commission wants to transform telecom regulation in Europe. Is it too little, too late to solve Europe’s digital problems?

The Digital Networks Act (DNA) is the EU’s initiative to modernize telecom regulation by harmonizing rules, spurring infrastructure investment, and cutting red tape. It seeks to streamline spectrum licensing, network authorizations, and reporting across member states, while promoting sustainability and consumer protection. These are worthy aims—but past experience suggests the European Commission lacks the resolve, or the “DNA,” to turn vision into action. While Strand Consult supports the effort to bring telecom policy into the 21st century, the proposals arrive too little, too late to inspire investors, entrepreneurs, or citizens. Outside of standout digital performers like Denmark, Europe’s digital sector has long trailed the U.S., South Korea, Norway, and Switzerland by most competitive benchmarks.

Yet, don’t count the Commission out. All the same, the European Commission succeeds in setting standards—whether in security, data protection, or defense policy. A dozen nations aspire to join the EU, and dozens more emulate its policy. However, it is one thing to set the standard and another to follow it through. Consider the EU’s 5G Toolbox, agreed upon by all 27 member states, still lacks a clear implementation plan. As NATO countries rearm and require secure 5G for advanced weapons, many EU nations, including Spain and Germany, rely on Chinese technology, risking exclusion from NATO’s communication networks.

This note outlines the contours of the Digital Networks Act proceeding as a source of inspiration for the Commission to fulfill its ambitions. When it comes to financing of broadband infrastructure, Strand Consult conducts its own project on Business Models for Broadband Cost Recovery in which it compares and contrasts policy and outcomes in different region. Check out Strand Consult’s library of reports and research notes on the topic.

Overview of the proceeding

With its longtime commitment to transparency, Strand Consult recognizes and commends European Commission for its public proceeding on the Digital Networks Act (DNA). It featured an improved feedback submission engine which highlights and summarizes key statistics about who participates and a link to the respective submission, a boon to transparency in the policymaking process. The stated goal of the EC proceeding is to improve secure, fast, and reliable digital networks, both fixed and wireless, to support cloud-based infrastructure and AI deployment and builds on  the 2024 white paper “How to master Europe’s digital infrastructure needs” following the 2023 consultation to which Strand Consult participated. 

At the conclusion of the July 2025 proceeding, the EC reports that of the 326 submissions, about 70 percent came from industry; the remainder from advocacy organizations, academia, government, and other organizations as Strand Consult details in this note.

The call for feedback brought many filings from telecom and broadband providers, showing that the industry is not monolithic, even though 70 percent of broadband investment comes from the largest telecom companies. Other stakeholders include equipment providers, broadcast/media companies, European regulatory bodies, and internet exchanges.

This represents a meaningful stakeholder response and should help inform the EC’s policymaking process, albeit a restatement of earlier claims from the EC’s 2023 consultation. Thankfully the proceeding contained thoughtful, respectful comment, unlike earlier policy grandstanding by the Body of European Regulators for Electronics Communication (BEREC) which incited activists to generate over 1 million comments to create a pseudo plebiscite for net neutrality regulation. Strand Consult revealed that at least one-third of the comments came from outside Europe. 

While not an exhaustive analysis of the DNA consultation, Strand Consult attempted to find feedback with original, empirical evidence. Sadly, there were limited examples outside of a few academic papers and Strand Consult’s own analysis. The investigation revealed that many parties regurgitated each other’s arguments, even copy-pasting text directly, like CETA and Danish Entrepreneurs. As to be expected, this call to cost recovery activated the many advocacy organizations funded by Big Tech which unsurprisingly filed in unison with their usual unevidenced claims, which Strand Consult fact-checks.

The most meaningful reform would be to abandon the misguided focus on cross-border telecom consolidation. The real opportunity lies in domestic mergers, where streamlining redundant infrastructure and administration can unlock synergies and free up revenue for reinvestment. Yet this proceeding appears to overlook that critical lever—making it unlikely to achieve its core goal of boosting private-sector investment in broadband, fiber, and next-generation networks like 5G and 6G. While reducing compliance and reporting burdens is welcome, if the overarching regulatory model remains flawed, the fundamental barriers to investment will persist.

Strand Consult is pleased that the EC invited evidence on broadband cost recovery strategies. Yet this policy alone is insufficient to deliver the EU’s Digital Decade goals. As the proceeding is largely based on argumentation, Strand Consult observes some salient dynamics.

Big vs. Little Telco

One key fissure in the European broadband debate lies between large and small telecom providers. Europe is home to approximately 10–15 top-tier network operators and national champions, alongside an estimated 30,000 small and medium-sized broadband providers.

The push for “fair share” contributions from Big Tech has been led primarily by ETNO/Connect Europe, and the GSMA, which largely represent the interests of the largest telecom operators. In contrast, only about 3,300 of the 30,000 smaller providers belong to a common trade body—most prominently, EuroISPA.

This fragmentation reflects the classic dynamics of collective action theory: the larger and more diffuse the group, the harder it is to organize. As a result, the most coordinated and well-funded lobbying comes from Big Tech (via CCIA and other trade associations), followed by large telecom trade association (ETNO and GSMA), with small providers remaining less coordinated and represented.

As a result, many small providers actively oppose the “fair share” campaign. They believe they will never be included in any final negotiation and see opposition to “Big Telco” as both a principled and strategic marketing stance. Alternatively, some small providers align with Big Tech because of geographic proximity, as is seen in Ireland, Netherlands, and Luxembourg where Big Tech has major operations.

Big Tech often leverages small ISPs to further its own interests in regulatory and market debates by creating the appearance of a broad, grassroots coalition opposing policies pushed by large telecom operators. By aligning with small ISPs, which have strong local customer relationships, Big Tech amplifies dissent against its disfavored policies, framing the debate as consumer-friendly and diverse rather than a conflict between corporate giants. This alliance allows Big Tech to offload lobbying costs, extend its influence through trusted local providers, and dilute responsibility by presenting opposition as an industry-wide concern rather than just its own self-interest. Ultimately, this strategy helps Big Tech shape favorable regulations and promote its public image as a pro-consumer actor, while minimizing direct scrutiny and expenses associated with advocacy efforts. Strand Consult describes these tactics in its report “Follow the money: Big Tech Activism Around the Globe”,  a report about transnational activism.

This dynamic has implications for evaluating the claims of self-appointed consumer advocacy organizations such as BEUC and others. With 450 million consumers in the EU, there is no single body that can credibly claim to represent the full diversity of European consumer preferences. Just look at European political parties; there are 10 Euro-parties and some 275 individual parties across the member states. These can be further divided in some 8 categories from left to right with a divergence of views. There can hardly be one view among consumers.

The cost recovery movement in the USA has decidedly different dynamics. In the USA, the small broadband providers lead the effort for cost recovery joined by a diverse group of distinct consumer organizations.

Advocacy Organizations

A Joint Statement hosted by the Bureau Européen des Unions de Consommateurs (BEUC)—the European Consumer Organisation, which is itself EU-funded—claims to represent the voice of civil society in opposing the EU’s emerging “fair share” cost recovery proposals for broadband. However, this claim of representation is questionable. Of the 85 signatories to the statement, over 50 are businesses or trade associations, including major lobbies like the Motion Picture Association, representing a $300 billion global industry, and its affiliates, such as Hollywood studios Warner Bros. Discovery, Disney, Paramount, Sony, Universal, and AMC. These studios also fund signatories on the list.

Only 23 signatories on the BEUC statement are registered non-profits, many of which receive funding from Big Tech companies (e.g., Google, Meta, Amazon) and U.S.-based foundations associated with left-leaning advocacy, such as the Ford Foundation, Open Society Foundations, MacArthur Foundation, and Rockefeller Foundation. These foundations hold significant investments in U.S. Big Tech securities and support global grantmaking aligned with these interests, mirroring the funding model of advocacy groups that pushed for the 2015 net neutrality rules.

For example, epicenter.works, an Austrian non-profit, is funded by the Open Society Foundations, Mozilla Foundation, and Luminate (part of the U.S.-based Omidyar Network, linked to eBay). Luminate also supports the Atlantic Council’s tech initiatives, another signatory. The Internet Society, often perceived as a front for U.S. internet interests, receives funding from the Ford Foundation and .ORG domain revenues. Similarly, Article 19 received a $670,000 grant from the U.S. Agency for International Development (USAID) in 2022.

In 2023, USAID disbursed approximately $44 billion for international projects. While many of its initiatives are laudable—such as those addressing malaria, HIV/AIDS, tuberculosis, and maternal and child health—others, like transgender promotion programs, have been criticized as partisan. Additionally, some projects had unintended consequences, such as agricultural funding in Afghanistan inadvertently supporting the Taliban’s opium trade. These examples raise questions about why U.S. taxpayers should fund European advocacy efforts, particularly those that align with Big Tech priorities. While such funding may serve American soft power, it does not necessarily reflect the diverse views of U.S. voters, who hold varied opinions on Big Tech’s influence.

The BEUC statement, which presents no actual evidence which the proceeding requested, appears less a grassroots civil society initiative than a coalition of vested interests defending the status quo. Strand Consult describes these tactics in its report “Follow the money: Big Tech Activism Around the Globe”,  a report about transnational activism.

The joint statement claims that cost recovery would violate net neutrality—when in fact, it is a logical policy complement. The EU currently regulates only one side of the broadband market: the relationship between ISPs and end users, through the Open Internet Regulation. That law, by design, does not cover the commercial relationships between ISPs and content providers, a market that remains largely unregulated. Yet the signatories seek to stretch the interpretation of net neutrality in a way that places the rising costs of traffic—particularly from data-heavy services like advertising and ad tech—squarely on consumers, rather than seeking a proportional contribution from the relevant participants.

The joint statement makes a series of unsubstantiated claims: that cost recovery would raise prices, limit access, reduce innovation, and harm SMEs, MVNOs, and cultural sectors. However, evidence from countries that have implemented elements of cost recovery suggests the opposite.

For example, South Korea—recognized by as a global broadband leader in access, affordability, and skills—maintains competitive consumer prices (as EU itself documents) despite network cost-sharing mechanisms. Korea is also the world’s 7th largest content economy and one of the few nations to have successfully developed homegrown digital platforms that compete with Big Tech, including Naver, Kakao, Coupang, Wavve, TVING, and Watcha. These Korean parties have paid network usage fees and have grown.

Korea’s internet policy reflects the ultimate neutrality that everyone pays to access the network, from the individual household to the global corporation. There is no free ride for the biggest users, which is the de facto European position. For more documentation on South Korea, see Strand Consult’s fact check research note and library on South Korea.

In contrast, the EU’s fixation on a rigid interpretation of net neutrality has failed to produce  results, despite years of policy promises that it would stimulate European digital innovation. Instead, the current regulatory imbalance continues to protect the traffic-intensive business models of a handful of global firms—at the expense of infrastructure investment, innovation, and long-term consumer benefit. Indeed many European nations relaxed net neutrality provisions during Covid because they harmed consumers from getting access to the critical services they needed including health and education.

It is notable that many of the small ISPs signing the joint statement are based in Ireland—a country that hosts numerous Big Tech offices serving the EU market. This setup enables Big Tech firms to declare their EU profits in Ireland and benefit from its relatively low corporate tax rates. Ireland has leveraged this tax revenue to fund its €2.7 billion National Broadband Plan, which aims to connect approximately 544,000 premises, or about a quarter of the country. For instance, in 2021, Google Ireland Ltd reported €2.8 billion in pre-tax profit and paid €622 million in tax. Meanwhile, the European Commission ruled that Apple received illegal tax benefits and demanded €13 billion in back taxes, a decision currently under appeal. Ireland’s approach shows how tax revenue from Big Tech can be redirected to support broadband infrastructure—effectively achieving through taxation what a market-based cost recovery policy would naturally accomplish in a competitive environment.

In any event, Big Tech’s egregious abuse of Europe’s Open Internet Law shows the end game all along. As Strand Consult explains in its analysis of the dispute between Meta and Deutsche Telekom, net neutrality has been used as a ruse by Big Tech to avoid financial contributions to network costs. At the height of the COVID-19 pandemic, Meta breached its paid peering contract after 10 years, refusing to pay but expected the same capacity for delivery. Instead, it shifted to lower-quality transit routes, flooding the network with algorithm-driven ads and content that users did not request, crowding out other traffic. Meta is aware that this tactic makes it appear as if the broadband provider is slowing traffic unless the provider adds capacity at its own expense—capacity deployed solely to support Meta’s traffic. Deutsche Telekom is then forced to either absorb these costs or pass them on to all customers, regardless of whether they use Meta’s services.

Deutsche Telekom, to its credit, chose not to degrade Meta’s traffic or punish its customers. Instead, it sued Meta and won its claim. However, the case is expected to be tied up in court for years with an uncertain outcome. This situation underscores the urgent need for the European Commission to intervene, clarify the true purpose of the Open Internet law, and put an end to Big Tech’s ongoing abuse.

Academic Submissions

The proceeding requests evidence, so Strand Consult reviews the academic findings with scientific and empirical investigations.

An independent paper from Dr. Asma Chiha et at Ghent University provides actual data from the broadband market in Belgium. While the authors support a cost recovery mechanism with content provider, they suggest that some telecom operators’ estimation of costs are overstated in urban areas but under-stated in rural one. This might suggest that reform should incorporate the needs of smaller and rural broadband providers.

A novel paper using game theory from Tamás Burkur at the Corvinus University of Budapest concludes that splitting the broadband network costs equally between broadband and content providers is most fair and transparent allocation, a finding supported by the work of American mathematician game theorist Lloyd Shapely.

In general the academic papers are supportive of the EC’s effort to modernize telecom policy with specific reference to transition to optical infrastructure  (Hasin at Technical University of Košice), promotion of network virtualisation (Pogorel, Telecom Paris Grad School of Engineering), and harmonizing current asymmetric regulation between over the top technologies (OTTs) and telecom providers and centralizing oversight (De Minico and De Tullio as Federico II University of Naples). The Institute of Electrical and Electronics Engineers (IEEE) European Public Policy Committee calls for a public repository where the involved stakeholders declare their willingness to share a portion of their infrastructure or to promote the shared construction of new physical infrastructure can help expedite the process.

When it comes to AI, in 2018 the EU said that we should be the leaders in AI. In 2023, EU made AI legislation that resulted in a number of restrictions when it comes to the use of AI solutions.  In 2025, Europe’s presence in the AI landscape is quite limited, conversely, here in 2025 they have repeated the message they came with in 2018, precisely that we must be a leader in AI: Commission sets course for Europe’s AI leadership with an ambitious AI Continent Action Plan

In summary the historical facts shows that EC have adept at developing and implementing regulation that slows down technological development and hampers investment. It is next to impossible to identify the new and significant technological enterprises which have emerged from EC regulation. Instead, we can see the decline of critical sectors like telecommunications and related hardware as the result of mis-guided telecom regulation.

The European Commission wants to Transform the Telecom regulation in Europe, the question is about it is too little, too late to solve the big problems Europe according to EU´s own studies have?

The DNA’s Connection to Defense: Modern Weapons Require Next Generation Communications

Across NATO, countries are rapidly modernizing their defense systems. Gigantic sums will be invested in new, advanced equipment. While the shopping list is long, these defense solutions share one essential requirement: access to secure, modern communications.

In the telecommunications industry, there has long been discussion about new revenue streams—particularly through 5G and private 5G networks. Yet there has been far less focus on what communication capabilities defense systems will require in the future.

The war in Ukraine and shifting geopolitical realities have significantly altered this picture. Today, there is a fundamentally different understanding of how and why defense investments must be made, particularly given the war on the EU’s doorstep involving Russia, China, and North Korea.

For those in telecommunications, it’s worth asking how these developments relate to our industry—and how NATO’s evolving defense posture may affect telecom operators both within and beyond the alliance. Strand Consult’s new report, How to Ensure Next-Generation Weapons Have Access to Modern Communication Solutions in NATO, explores these questions in depth.

As the EU begins to modernize its telecommunications regulations, it must also develop a roadmap to ensure NATO has secure communication infrastructure within the EU. The implementation of the EU’s 5G Toolbox—adopted by all Member States—has been inadequate in several countries, notably Germany and Spain.

A recent case in Spain illustrates the challenge: the Spanish government reportedly awarded Huawei a contract to manage wiretap systems for intelligence agencies. This decision runs counter to the strategic goals set in Brussels and exemplifies the difficulties in achieving EU-wide coherence on critical telecom decisions.

Conclusion

At Strand Consult, we are concerned that the EU’s ongoing regulatory reforms will once again fail to address the fundamental challenges. Years ago, the EU identified a €100 billion investment gap in telecommunications. By 2025, this gap has reportedly doubled to €200 billion.

The EU’s record on AI is similarly illustrative. In 2018, the EU announced its ambition to lead in AI. However, by 2023, it had passed legislation that imposed significant constraints on AI development. In 2025, despite limited presence in the global AI landscape, the EU reiterated its ambition to lead, this time with an “AI Continent Action Plan.”

These historical examples suggest that the European Commission excels at producing regulations that slow technological development and deter investment. There are few—if any—notable technology firms that owe their success to EU regulatory frameworks. In contrast, we see a steady decline in key sectors like telecommunications and hardware, driven by regulatory missteps.

The European Commission has now pledged to transform telecom regulation in Europe. It may be too little, too late to address the deep-rooted challenges the EU itself has acknowledged and in part, created.