Europe's telecoms heavyweights call for lighter 'net neutrality' rules

By Julia Fioretti

BRUSSELS (Reuters) - The European Union should not force telecoms operators to treat all the traffic on their networks equally as it crafts rules on "net neutrality", several industry bodies said on Monday.

The reaction comes a week after Latvia, which holds the rotating European presidency, tabled a compromise text on net neutrality, the principle that all internet traffic should be treated equally, under which telecoms operators would face strict rules on when they can intervene to manage traffic.

Four industry bodies representing the likes of Vodafone (VOD.L), Alcatel-Lucent (ALUA.PA), Orange (ORAN.PA) and Liberty Global (LBTYA.O) called on the EU to allow them manage internet traffic to meet the different needs of all consumers.

"It is not technologically efficient or beneficial for consumers if all traffic is treated equally. Nor has this ever been the case," the letter, seen by Reuters and signed by ETNO, Cable Europe, the GSMA and Make The NetWork, says.

Under the Latvian proposal, internet service providers would be obliged to treat all traffic equally, except when their networks face "exceptional ... congestion", or they are ordered to block some content by a court, or they need to intervene to ensure the security of the network.

Providers would also be free to offer specialized services, typically at higher speed and guaranteed quality, as long as broader internet access is not impaired.

Telecoms firms say the ability to offer specialized services is key to innovation in the digital sector, such as in the areas of connected cars and e-health, and that strict rules would only stifle that.

But supporters of net neutrality counter that if left unregulated, specialized services could crowd out other content and degrade the quality of the Internet.

U.S. President Barack Obama has come out in favor of strict net neutrality rules in the United States and said operators should be banned from offering paid "fast lane" deals with content companies, for example Netflix (NFLX.O).

The EU has been debating net neutrality for more than a year as part of reforms to its telecoms sector.

EU lawmakers voted on strict net neutrality rules in April last year and any eventual compromise text agreed among EU governments would have to be squared with the parliament's position.

(Editing by David Holmes)