EU Parliament Votes to Guard ‘Net Neutrality,’ End Roaming Fees

The European Parliament voted in favor of “net neutrality” rules, which restrict how phone companies manage their networks, in a move meant to prevent blocking or degrading of certain websites and traffic.

The rules also include a plan for eliminating roaming charges -- the fees mobile-device users pay when making calls or using data outside their home country -- by the end of next year within the European Union. EU members will continue to review the regulation and the Commission expects a final agreement by end of the year.

“This is what the EU is all about -- getting rid of barriers to make life easier and less expensive,” European Commission Vice President Neelie Kroes said today in a statement.

Industry groups representing phone companies, including Orange SA (ORA) and Telecom Italia SpA (TIT), oppose the so-called Open Internet proposals, saying they’ll hinder the development of new services, such as Internet-based TV and video, where more intensive network management is necessary.

The proposals would also hurt the potential for agreements similar to the one Netflix Inc. reached with U.S. cable company Comcast Corp. in February. Netflix agreed to pay millions of dollars annually for connections that ensure better speed and reliability for its video-streaming service.

“If the restrictive changes to the Open Internet provisions are confirmed in the final text, the access of European citizens and businesses to innovative and high-quality services will be negatively affected,” Luigi Gambardella, executive chairman of phone-industry group ETNO, said in a statement. “This would turn into a dangerous situation, in which the European digital economy will suffer.”

Internet Opposition

Yet Internet companies, including Netflix, are lobbying for similar rules in the U.S. Last month, Chief Executive Officer Reed Hastings argued in a blog entry for rules to prevent Internet-service providers from charging extra to deliver content to customers over their networks.

“Without strong net neutrality, big ISPs can demand potentially escalating fees for the interconnection required to deliver high quality service,” Hastings said. “The big ISPs can make these demands -- driving up costs and prices for everyone else -- because of their market position.”

To contact the reporter on this story: Amy Thomson in London at athomson6@bloomberg.net

To contact the editors responsible for this story: Kenneth Wong at kwong11@bloomberg.net Ville Heiskanen, Anthony Aarons

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