A leak of the EU’s proposed Digital Networks Act (DNA) reveals the bloc looks to have dropped the so-called "fair share" clause that would have forced large traffic-generating platforms like Netflix and Google to contribute to network infrastructure costs for European providers.

The draft version of the act, published by Table.Briefings, fail to mention the controversial proposal, which has already drawn ire from several big-name tech firms from across the Atlantic.

Network operators argue that content providers are “free riding” on their network, and that this is a market failure that needs to be addressed with policy. These operators want to charge large companies a fee that they say is needed for the expansion and improvement of network infrastructure. However, there is no market failure.

Continental network operators have long argued that they find themselves beholden to U.S. tech and that the firms responsible for the largest amounts of traffic should pay to help maintain those networks, what with increased constraints from more intense workloads like video streaming.

A 2023 post on Spanish operator Telefonica’s website effectively outlines the position: “Telecom operators are stuck in [a] one-sided market model, getting payments for the use of the networks only from end customers and not from content providers. This affects the sustainability of the networks and reduces telcos’ investment capacity. At the same time, since networks are the backbone of Europe’s digital transformation, this also delays the consecution of the EU’s Digital Decade goals.”

But eagle-eyed readers of the 297-page DNA draft can find little to no mention of the fair share concept.

Industry analyst Dean Bubley was among those who first spotted its absence, writing on LinkedIn: “The ridiculous and ironically misnamed ‘fair share’ internet traffic tax seems to have been sidelined, although I'm sure there's some wiggle room in the detail for another decade of the same nonsense wearing a different hat.”

The absence of fair cost provisions may have been all but confirmed last summer when a White House fact sheet outlining the U.S.’s trade deal with the EU included: “The U.S and the European Union intend to address unjustified digital trade barriers. In that respect, the EU confirms that it will not adopt or maintain network usage fees.”

Add to that a questionnaire distributed by consulting giants EY and WIK Consult on behalf of the European Commission that featured questions on potentially reworking Article 26 of the European Electronic Communications Code (EECC) to cover IP interconnection disputes, providing operators with a mandatory dispute settlement framework where telecom operators could negotiate payments with high-traffic vendors.

The apparent removal of the fair share provision will likely be a blow to continental carriers who will now have to face the prospect of covering the capex for network expansions themselves.

Such a blow comes as network upgrade spending has been somewhat sluggish in recent years, having a decade of capex growth culminating in 2022 with $76 billion invested before rapidly declining as 5G rollouts near completion. Though that hasn’t stopped considerations around future investments in AI and 6G from causing some operators to reconsider their network stack.

Commenting on the draft legislation, internet policy anaylst Konstantinos Komaitis wrote: “Although the DNA avoids explicit references to ‘fair share’ or mandatory network contributions from content and application providers (CAPs), it embeds the underlying logic by treating traffic asymmetry as an economic imbalance; framing CAPs as cost drivers rather than demand-side value creators; encouraging commercial settlements linked to traffic volumes and capacity upgrades.”

Copper conundrums

Another key titbit from the draft DNA leak was the news that the EU plans to allow member states to push back their copper switch-off targets.

Originally slated for 2030, under the DNA proposals, member states would have until 2035 to switch off their copper lines. Nations would be free to create their own phase-out timelines, so long as they meet the conditions of having at least 95% of fiber coverage and the availability of affordable retail connectivity services by the now extended date.

“After [2035] the conditions will not play a role anymore, and member states will be required to mandate the switch-off in all the remaining copper switch-off areas with some exceptions,” the draft regulation reads.

The EU has sought to position its desired shift toward full-fiber rollout and subsequent continental copper decommissioning as a means to help telecom providers make cost savings, contending fiber networks are less prone to damage or signal interference, reducing maintenance and downtime.

But efforts have been few and far between. Nations like Portugal (97%) and Sweden (95%) have made sizable strides in phasing out copper from their national networks in favor of fiber, according to figures from the FTTH Council Europe. On the flip side, Greece (5%), Czechia (5%), and Germany (5%) are not as far along in their switch-off efforts and would have likely missed the initial 2030 targets.

Adding to the desire to move away from copper comes the fact that the material could well become scarce, with S&P Global warning of a supply deficit of 10 million metric tons by 2040.