Has EU telecom policy become outdated?

Many argue, especially the large European telecom operators, that the EU telecom policy is widely seen as outdated.  There is a strong disagreement with Brussels about what “outdated” means.

The critics of the EU telecom policy state that this policy has been with us since early 2000 and was formulated for a different internet era. Much of the framework traces back to the early 2000s-2010s broadband era (e.g. the 2002 framework, updated in 2009 and 2018).  Critics say it does not reflect these most important recent developments: Cloud Computing; AI-driven networks; Streaming-heavy traffic (Netflix, etc); Satellite and cross-border services.

Rules designed for traditional telecom operators are said to not fully fit today’s digital ecosystem.

Telecom regulation is still partially national, especially for licensing and spectrum. This creates barriers for pan-European services and newer technologies. Companies argue this prevents scale, making Europe less competitive than the US or China. Highlights of the US and Chinese telecom policy are mentioned at the end of this article.

Industry groups say the current framework limits consolidation. The present framework reduces incentives to invest in 5G and fibre. One report argues that EU rules “no longer match the realities of today’s infrastructure”.

Europe has many small telecom operators compared to fewer, larger ones elsewhere.

My telecom executive friends in Europe complain about increasing bureaucracy in reforms. Deutsche Telekom’s CEO recently said, “EU reforms add more requirements but do not solve core problems”.

Some older laws (like the ePrivacy Directive) are still active and criticised as outdated. Privacy consent systems (cookie banners) are often cited as ineffective in practice.

Research shows telecom regulation barely addresses AI risks in networks. Also, big tech companies like Google and Netflix generate most traffic but are not regulated like telecom operators.  This obviously creates a mismatch between who uses the network versus those who fund it.

The EU however is not sitting on its laurels of having had an avant-garde policy in the early 2000s and is actively updating its telecom policy.  Some of the recent reforms include Gigabit Infrastructure Act (2024) to speed broadband rollout. The proposed Digital Networks Act (DNA) is still being debated to modernise rules. The EU speaks of an evolving telecom policy and not an outdated one.

The EU will prioritise regulated competition with social objectives- Philip Micallef

EU places great emphasis on competition and consumer protection by preventing monopolies, keeping prices low, and enforcing net neutrality.  Smaller telecom firms warn that deregulation could lead to ‘re-monopolisation’.

My conclusion is that parts of the EU telecom policy are outdated especially around fragmentation, investment incentives and new technologies but I would add EU telecom policy is in transition with major reforms in the pipeline. 

The EU telecom policy has at its core a harmonised, competition-driven single market with strong consumer and universal service obligations. US telecom policy on the other hand is market-oriented, deregulatory by default with oscillating federal oversight. The China telecom policy is state-led, security centric and industrial policy driven.

The US puts innovation and private investment first. The US model is pro-market and reactive with less predictability than the EU. 

I had the privilege of setting up and leading the Bermuda Regulatory Authority and the model chosen was a middle-path one between EU-style regulation and US-style market reliance.

Each jurisdiction has its own telecom policy, but the least common denominator of each policy aims at ensuring universal access, promoting competition, protecting consumers, encouraging innovation and managing spectrum.

The EU is working hard to update its telecom policy but will still prioritise regulated competition with social objectives even at the cost of heavier compliance burdens.  The US reduces compliance burdens to a minimum to the detriment of regulatory uncertainty. China on the other hand advocates state ownership and tight security laws.

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Philip Micallef is a former executive chairman of the Malta Communications Authority and a former chief executive of the Bermuda Regulatory Authority.