Better no new legislation than the current proposal? Rapporteur for the Digital Networks Act Michał Kobosko disagrees, calling connectivity “the backbone of the European economy”. With the world changing rapidly, Europe needs to keep pace. “We have to deliver,” he tells EU Perspectives.
Discussions around the Digital Networks Act (DNA) in the European Parliament are still in the early stages but come September work will intensify. However already controversial elements are dominating the headlines. As he faces a mountain of work, Michał Kobosko (Renew/POL) spoke to EU Perspectives about the European Commission’s proposals, criticisms regarding the ambition of the DNA, and how negotiations are likely to play out.
Where are we at with the DNA discussions?
We’re still in the pretty early stage of our work in the Parliament. However, the discussions we are participating in are already very serious because there are so many different elements to be discussed and some of them are pretty controversial.
Let me start with saying that we’re very grateful and I have a lot of respect for the Commission’s work on the proposal that we have on the table, because there are a lot of very specific ideas which are more than worth discussing… and perhaps also adapting in a way.
There are also a lot of expectations to have the DNA even more ambitious. Many people that I had a chance to talk to expressed criticism towards the DNA proposals. There are some issues which were present in the white paper of 2024 that are not visible in the DNA proposal. So we need to work hard to make sure that we are really pushing European connectivity forward.
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What needs to change with Europe’s connectivity? Do we already have big problems?
The system works pretty well today, but that’s not going to last. Living in such dynamic times as we do right now, so many changes are happening from one day to the next. We need to make sure that the backbone of the European economy—and not only the digital economy, but the economy as a whole—is there in the proper way.
I would say it’s not my main job to make companies attractive to investors. However, I want to make sure that our companies are attractive to us Europeans, our citizens, the clients, consumers, our businesses.
— Michał Kobosko
There are three pillars that we are looking at and one of them is obviously simplification. We have been discussing this since before the start of this term, but now we realise more than ever that without real simplification of rules for our European players, we will get nowhere. European players really need the levels of their obligations to be reduced. That’s the expectation and we are taking this very seriously.
Secondly, harmonisation of rules where it’s possible and where it’s needed. We need to make sure that we are harmonising the market in a way that’s separate from discussing the consolidation of the market.
With the DNA we are not having a direct discussion regarding mergers and acquisitions in Europe. We’ll be waiting and looking forward to seeing the renewed EU merger guidelines later this year. But of course it’s strongly interlinked. Whether with the DNA we are creating the proper conditions for the market consolidation, we will see.
How important is consolidation for investment and how can policy drive that?
Our players are complaining that they do not have sufficient capital to invest. That there are no incentives for them, so we as policy makers need to ensure that we are helping our own players to grow, to develop, to invest more.
It will take months in the European Parliament. Not that we are lazy, not that we are just sitting and doing nothing. I would say the vice versa.
— Michał Kobosko
You very often hear complaints that European telco players are not interesting stocks for investors compared to global telco players. We do understand that. Yet, I would say it’s not my main job to make companies attractive to investors.
However, I want to make sure that our companies are attractive to us Europeans, our citizens, the clients, consumers, our businesses. And this is what our work is about. So we are not there yet.
And what is the likely timeframe?
It will take months in the European Parliament. Not that we are lazy, not that we are just sitting and doing nothing. I would say the vice versa.
We’re doing a lot and we are talking to lots of stakeholders, particularly on the issues which are highly controversial in the proposal. But we are moving forward and I’m optimistic about the final outcome.
One CEO of a big telco in Europe was quoted saying it is better to have no DNA than the current DNA. That’s not our vision. That’s not our point. We have to deliver. That’s our job.
Looking ahead to the trialogue stage, how difficult do you expect the negotiations to be? Where do you think are the big stumbling blocks?
They’re going to be very tough. I’m afraid that’s just the reality we are facing. As I said, we’re at the early stage of work in Parliament so we will need to find a compromise among the political groups.
But when we listen to the national governments or national regulators, I would say that their appetite to change the status quo is really limited. What we hear is “why should we change a system that works pretty well?”
The answer is that it works well today, but it won’t work tomorrow because the world is changing and developing so quickly.
To the second question, what are the big issues? Let’s start with spectrum policy. Obviously because traditionally telcos were cash cows for national governments, the latter are entirely happy with the existing system where the operators pay them billions of euros.
There are different options for a change and there will be opposition. Personally, as much as I support longer licences, I already have some doubts about indefinite licenses. As a liberal I would love to see some space open for new market entrants. In today’s reality with almost automatic renewals, that’s seen in the EP as controversial.
We do need to reduce reliance on foreign tech, specifically American. So we need to make sure that our satellite services are being managed and licensed in a proper way.
— Michał Kobosko
There are also other controversies regarding the governance or the proposed ideas for copper switch off. Obviously here the situation differs from member state to member state. So lots to discuss.
An issue I would say is a bit less emotional is the discussion about satellite services because there’s broad understanding that this goes beyond the borders and we do need to reduce reliance on foreign tech, specifically American. So we need to make sure that our satellite services are being managed and licensed in a proper way.
Again, this will be tough negotiations. But once again, I’m pretty optimistic.
Finally, how is the DNA going to play a part in enhancing European competitiveness overall?
Well, there’s a very clear and direct connection with GDP growth. When you look at the DNA proposal—some 350 pages or so and additional 600 pages of the impact assessment—the figure we find is EU GDP increase by 2035 of €300–€400 billion. That’s massive.
But if we want to reach this goal, we have to be ambitious. I push back whenever I hear that the DNA is only about the telco industry. It’s not true. It’s also about AI development, cloud computing, quantum computing and so on. Connectivity is a prerequisite for any of those.
