As Europe races into the AI era, its policymakers are laying new pipes for the continent’s digital future. The European Commission’s proposed Digital Networks Act (DNA) promises to rewire the EU’s telecom landscape, with big implications for artificial intelligence infrastructure, connectivity equity, and the startup ecosystem.

Exposed as part of a broader push to make Europe “fit for the Digital Age,” the draft law aims to modernize how networks are built and regulated, from 5G towers in rural villages to fiber links between data centers.

I have to say it’s a bold vision of a more connected, innovative Europe, but one that must navigate a thicket of competing interests and unanswered questions.

A connectivity overhaul in context

For years, EU leaders have urged the creation of a true single market for digital services. The DNA is a centerpiece of that strategy, aligning with Europe’s Digital Decade goals for universal high-speed internet by 2030.

How can we translate this? Well, I think Brussels wants to turn the patchwork of 27 national telecom systems into one seamless network. The Act’s core objective is to “harmonise the EU connectivity sector by addressing delays, inconsistencies, and fragmentation”, removing barriers to cross-border operations and stimulating investment in very high-capacity networks.

This mirrors the logic behind earlier EU tech regulations; just as the Digital Markets Act tackled Big Tech gatekeepers, the Digital Networks Act targets the digital plumbing beneath them.

*This reform doesn’t come out of the blue. *

A Commission white paper in 2024 warned that without cutting-edge digital infrastructure, Europe’s digital economy would stall. It painted vivid scenarios: doctors unable to perform remote surgery, smart farms and self-driving cars hamstrung by slow connections.

Secure and sustainable networks are one of the “cardinal points” of the EU’s 2030 digital agenda.

The DNA is Brussels’ attempt to meet those needs by boosting investment, standardizing rules, and making sure that every corner of Europe can plug into the opportunities of the digital age.

Telecom investment, with strings attached

At its core, the Act hands telecom operators some long-sought gifts. One headline measure would grant carriers unlimited radio-spectrum licenses, ending the era of auctions that force telcos to periodically renew their rights.

For Europe’s big mobile providers, this change offers certainty: they can invest in 5G and future 6G networks without fearing their spectrum will expire.

Regulators argue this will “increase investment predictability” and accelerate network roll-out.

In theory, more cell towers could now reach remote areas, and companies might more freely trade or lease unused frequencies to new players.

But there’s a catch.

The DNA couples permanent licenses with “use-it-or-share-it” obligations to prevent hoarding. If an incumbent isn’t using its spectrum in, say, a rural region, it could be forced to share it or lose it, allowing a competitor or community network to serve that area.

It’s a nod to connectivity equity: Europe doesn’t want scarce wireless spectrum lying fallow while some communities remain underserved.

Broadband for all is the mantra, and long license tenures will come with accountability to deliver on coverage.

Another provision tightens the oversight of dominant firms. Under current plans, if a telecom operator holds significant market power (SMP) in one market (for example, fixed broadband), regulators could extend that designation to a closely related market (like mobile services).

In practice, this means big incumbents might face extra obligations, from transparency to price controls, across their range of services. The idea is to prevent giants from leveraging their dominance in one domain to squelch competition in another.

That could open space for smaller internet providers or innovative ISPs to compete, a boon for consumer choice and startup entrants.

Not everyone is cheering these moves.

A cohort of six member states, including France, Germany and Italy, has pushed back, urging Brussels not to centralize control over frequencies and mergers.

Spectrum auctions have long been jealously guarded as national turf (they can fill state coffers, after all), and capitals are wary of one-size-fits-all rules emanating from the EU.

These governments also worry that encouraging pan-European telecom mergers (another idea floated in the reform) could reduce competition at home. In their joint memo, they caution that while a level playing field between telecoms and tech firms is a laudable goal, *“this does not necessarily imply the same regulations should apply”*to both sectors.

It’s a reminder that the DNA, for all its single-market ideals, must reckon with political realities: Europe’s telecom revolution won’t happen without consensus among very different national markets.

Net neutrality and the ‘Fair Share’ fight

Perhaps the most contentious debate surrounding the Digital Networks Act has been over who pays for the next-generation networks. Telecom giants have spent years lobbying for a “fair share” contribution from Big Tech, arguing that bandwidth-hungry services like Netflix, YouTube, and cloud platforms should chip in to finance the infrastructure that carries their content.

The draft Act steers clear of any direct “network usage fee” on content providers. Instead, it reaffirms Europe’s commitment to net neutrality, the principle that all internet traffic must be treated equally by providers.

Any cooperation with Big Tech will rely on voluntary “best practice” discussions moderated by EU regulators, not on legally mandated payments.

This decision followed intense pushback from many sides. Over the summer, consumer groups and tech industry alliances publicly warned against reviving the “fair share” idea under any guise, noting it had been “clearly rejected in previous consultations” for threatening consumers, competition and innovation.

Even a U.S.–EU trade agreement in late 2025 extracted a pledge from Brussels “not [to] adopt or maintain network usage fees”, highlighting the geopolitical stakes of singling out mostly American tech firms.

On the other hand, startups and digital rights advocates breathed a sigh of relief at the Commission’s stance. Allied for Startups, a coalition of European entrepreneurs, argued that net neutrality is essential for startup growth, preventing a two-tier internet that would “favour dominant players” and raise barriers for newcomers.

In their view, a “traffic tax” isn’t just about Google or Amazon’s bottom line, it would set a harmful precedent that could box out the little guys who rely on affordable, equal-access bandwidth to innovate.

By keeping the DNA free of explicit network fees, Europe is signaling that the open internet won’t be collateral damage in the drive for better infrastructure.

Networks for an AI-driven Europe

Beyond telecom boardrooms and Silicon Valley balance sheets, the Digital Networks Act is ultimately about the kind of digital society Europe wants to build.

A major motivation is preparing for a future where artificial intelligence, cloud computing, and IoT devices are ubiquitous, and will demand unprecedented bandwidth and low latency.

The Commission’s own analysis stresses that only with the “highest performance” networks will transformative technologies like AI, autonomous vehicles, remote health care, and smart grids reach their potential.

In simple terms: if data is the new oil, Europe needs better pipes to pump it.

The Digital Networks Act sits alongside Europe’s broader tech push by focusing on the infrastructure AI needs to scale. Beyond regulating AI, the EU is investing in next-generation networks, from fiber to 5G and 6G, through initiatives such as the Smart Networks and Services Joint Undertaking.

Faster rollout of these networks would underpin everything from AI-driven industry to cloud services, all of which depend on high-capacity, cross-border connectivity.

The Act also addresses connectivity equity. While Europe’s digital goals assume universal gigabit access and widespread 5G, large parts of the continent still lag behind.

The proposal combines simpler deployment rules with tougher coverage obligations, while allowing flexibility where older networks cannot yet be switched off. The aim is to expand access without letting rigid deadlines slow progress.

Whether this works will depend on execution. Investment still favors dense urban markets, and rural coverage remains a challenge. If the Act can meaningfully lift fiber and 5G reach across Europe, it could help ensure the AI economy extends beyond major tech hubs to the rest of the continent.

Startups and the Innovation ecosystem

From the perspective of Europe’s startups and innovators, the DNA is a double-edged sword that tilts promisingly toward opportunity. On one side, the Act’s push to harmonize telecom rules could tear down barriers that have long frustrated young companies.

Today, a cloud services startup or an IoT device maker in Europe must navigate a maze of national regulations when scaling up, from differing network standards to separate certification hoops in each country.

By creating a more unified framework (for instance, common rules on spectrum and infrastructure access), the DNA could make it easier for a startup in Portugal to expand its services to Poland or Finland without running into 27 different regulatory roadblocks.

Startups rely on an open and predictable internet, and on this front the Commission’s approach offers some reassurance. By preserving net neutrality and rejecting new network tolls, the Act allows young companies to reach users on equal terms, without the risk that deeper-pocketed rivals can buy preferential treatment.

For small fintech or AI startups, avoiding additional network costs matters, and under the current proposal they won’t be asked to shoulder them.

At the same time, founders are reading the fine print carefully. Proposals around a “level playing field” raise concerns that telecom-style regulation could spill over onto digital services, including smaller platforms.

The balance remains fragile: regulate too little and dominant players squeeze out challengers; regulate too broadly and compliance costs can smother the next generation of European tech companies.

A careful path forward

As an ambitious blueprint for Europe’s digital infrastructure, the Digital Networks Act embodies a careful balancing act. It must entice telecom operators to spend the billions needed to upgrade networks for an AI-driven future, yet not at the expense of the open internet or new challengers.

It seeks to unify Europe’s connectivity market while respecting that one size may not fit all in a Union of 27. In the coming months, EU lawmakers and member states will debate and tweak the proposal, and the stakes are high.

The outcome will shape not just who foots the bill for Europe’s next-gen networks, but also who can innovate on those networks in the years ahead.

There will be bumps on this road, resistance from powerful telecom lobbies, wrangling between capitals and Brussels, and possibly even transatlantic frictions.

In the end, the Digital Networks Act is about Europe’s place in the digital world. A continent that pioneered GSM mobile standards and championed data privacy now wants to set the standard for equitable, innovation-friendly networks.

Striking a balance between investment and fairness, between scale and competition, won’t be easy. But it’s essential. If the EU succeeds, the reward could be a resilient digital backbone capable of supporting AI breakthroughs and economic growth across all its regions, without leaving its core values behind.

If it stumbles, Europe risks buffering on the sidelines while others surge ahead.

The coming debate will reveal whether Europe can indeed reshape its digital DNA for the better, or if old divides will slow down this grand connectivity project.

Either way, the world will be watching the EU’s next move in this high-stakes telecom reboot.