Vodafone Heads to Spain to Protest EU Network Traffic Rules

By Amy Thomson

Vodafone Group Plc (VOD) will use a technology conference in Spain today to criticize proposed rules for handling Web traffic on networks in Europe that the company says will hurt its business and discourage innovation.
Chief Executive Officer Vittorio Colao will join a roundtable discussion in Santander as European leaders meet in Brussels and will decide rules that would prevent carriers from blocking websites or degrading network quality.
Carriers are resisting more restrictions from the European Union as other companies flood networks with content. Netflix Inc. is expanding its
video-streaming service in Europe, adding Germany, France and four other countries this month.
The rules “are too restrictive and would severely impact the functioning of the mobile Internet across Europe,” said Markus Reinisch, Vodafone’s director of policy. “This would be really bad for consumers as well as the industry.”
Last year, the European Commission presented a package of reforms that were meant to unify the continent’s networks -- abolishing roaming charges, making spectrum auctions more uniform and establishing so-called net neutrality guidelines.
The European Parliament, made up of representatives from the member countries, then presented its own amendments to the proposal in April. That’s where the phone company says the laws became unreasonable.

Photographer: Simon Dawson/Bloomberg

Vittorio Colao, Chief Executive Officer of Vodafone Group Plc.

The version being debated by Parliament would hurt carriers’ ability to guarantee that video streams seamlessly over their networks or to create new services that require specialized network management, such as driverless cars, Reinisch said. Business customers wouldn’t be able to request that the carriers manage traffic in a certain way and the operators may be unable to implement parental controls, he said.
Vodafone rose .1 pence to 206.85 pence in London trading at 8:25 a.m. The stock has declined 30 percent this year.

Stricter Rules

Internet companies have generally been in favor of stricter rules protecting the free flow of traffic on the Web. Google Inc., Facebook Inc. (FB) and more than 100 other Internet companies sent a letter to the U.S. Federal Communications Commission in May urging the agency to protect the industry against service providers who discriminate against traffic.
Neelie Kroes, the commissioner who oversaw development of the initial proposals, said that net neutrality legislation is inevitable, and it’s in the industry’s best interest to help create a Europe-wide set of rules. Kroes will leave her post after Nov. 1 as a new EU government takes office.
“My advice to telcos is to be constructive,” Kroes said in an e-mailed statement. “The European Commission is not the enemy of telecoms operators. European telecoms regulation has a long history of helping to grow the overall telecoms market. That is worth reflecting on.”
The European Council will hold a digital summit on Oct. 23. By then, the group made up of the heads of state of EU member nations will have considered the different proposals and come up with its own. The three versions will then be reconciled before the council adopts it into law.