(Adds FCC spokesman's comment, further details)
By Leila Abboud
BARCELONA, March 2 (Reuters) - Europe's two biggest telecomoperators have called on regulators to be flexible and pragmaticin finalising rules to protect the openness of the Internet, toallow them to give priority to certain kinds of data traffic ontheir networks.
The chief executives of Vodafone and DeutscheTelekom said on Monday at the Mobile World Congressin Barcelona that network operators needed to give specialtreatment to data for new services like connected cars and smartelectricity meters to ensure that they functioned properly.
Industry expects such specialised services could eventuallygenerate billions in additional revenue as everyday tasks areincreasingly connected to the web.
In both the United States and Europe regulators are formingpolicies on how to protect "net neutrality", the concept thatall traffic on the Internet must be treated equally regardlessof content or source.
The issue often pits providers of bandwidth-hungry internetservices such as Netflix, Spotify and Google's YouTube against the telecoms and cable companies. Meanwhile,governments want to ensure that network owners do not becomegate keepers thwarting start-ups or new services by imposingspecial charges for high volume traffic.
"We favour net neutrality, but we need to be allowed to havequality classes to enable new services in the Internet ofThings," said Deutsche Telekom's chief executive, Tim Hoettges.
Under new rules passed last week by the U.S. FederalCommunications Commission, setting aside capacity for such"specialised services" - providing connectivity to a smart meterfor example - will be permitted as long as they do notdisadvantage normal internet services for homes and businesses.
However, the details are not all public since the FCC hasnot yet published the full text of its net neutrality rules.
In Europe negotiations are continuing between the EuropeanParliament and member states over final net neutrality rules,which could be concluded by late spring. The Parliament versioncontains specific measures aimed to prevent abuses of theexception for specialised services, but it is expected to bewatered down, experts have said.
Asked about the FCC's moves, Vodafone's chiefexecutive, Vittorio Colao, said: "We looked at it and there isenough room in the position for it to be acceptable or anon-acceptable one ... We need to understand the implications."
He said that in conversations with Tom Wheeler, the head ofthe FCC, he had been assured that the U.S. policy would haveroom for telecoms providers to develop new services aroundconnected objects.
"I have asked explicitly to the chairman of the FCC, 'so, are specialised services, fast lanes and quality of serviceforbidden or not ?'. The answer is no, they are not forbidden.We understand that they will be there. Are they explicitlyauthorised? No they are not."
"Americans are great pragmatists so they will do what isright. In the end they will not think about principles."
A spokesman for the FCC later said that paid-for prioritisation and so-called fast lanes will be banned under theU.S. rules. That means that network owners cannot accept paymentto favour some traffic on the final line into homes andbusinesses.
On Monday the FCC Commissioner met with European regulatorsto explain U.S. policies on net neutrality and radio spectrum.He was equpped with a stack of cards emblazoned with the mainpoints of the U.S. Open Internet rules, which seemed designed torebut some common industry criticisms.
"OVER THE TOP"
Separate from the net neutrality debate, Deutsche Telekomboss Hoettges also renewed a call for companies like Google and Facebook to be regulated since they offercommunications services such as web-based texting and chats,much as telecoms operators do.
"There is a convergence between over-the-top web companiesand classic telcos," he said. "We need one level regulatoryenvironment for us all."
Colao added that web-based communications services likeMicrosoft's Skype or Facebook's WhatsApp also needed toobey national laws under which governments can demand voice ortext data in the course of criminal or terrorism investigations.
"There is a legitimate interest by governments to protectcitizens, our public squares, and our homes. This requires someaccess to digital data ... but the rules must be public andclear, and the level of access should be monitored."
"It's not legit for over-the-top players to reply that theydo not respect the laws of your jurisdiction," he added. (Additional reporting by Harro Ten Wolde; Editing by GregMahlich)
Vodafone (VOD)
