New Internet rules set up industry's next battle

Sun Mar 1, 2015 10:47am EST
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By Leila Abboud and Julia Fioretti

BARCELONA/BRUSSELS (Reuters) - New rules that aim to protect the openness of the Internet will allow telecom and cable groups to prioritize and earn potentially vast income from some types of data, setting up likely clashes with regulators in the future.

Telecom companies such as AT&T and Vodafone have convinced U.S. and European regulators, finalizing so-called "net neutrality" rules, to allow them to dedicate network capacity to services such as providing connectivity to driverless cars and facilitating the exchange of medical data between patients and health professionals.

Whether this proves to be a loophole or a necessary protection will only be known later.

The industry will be able to develop such "specialized services" as long as they do not hurt the delivery of the normal Internet to homes and businesses. The firms expect such services could generate billions in revenue one day as everyday tasks are increasingly connected to the web.

Telecom and cable companies argue being able to charge for different services and speeds would help fund network upgrades and develop new industrial uses for the web, such as smart electricity meters.

Silicon Valley and net neutrality activists counter that such treatment would lead to a two-speed system where telecom and cable groups could prioritize their own content and squeeze out start-ups who cannot pay.

Antonios Drossos, a net neutrality advocate at consultancy Rewheel Ltd in Finland, said the U.S. FCC and European regulators would handle the issue of what was permitted under "specialized services" on a case-by-case basis.

"It comes down to whether you trust the network operators. Do you believe they want to do health care and connected cars, or are they just looking for a loophole around the net neutrality?"   Continued...

A man types on a computer keyboard in Warsaw in this February 28, 2013 illustration file picture.  REUTERS/Kacper Pempel/Files