EU Backs The Right Of Telecom Companies To Block Competing Services And Applications

The EU Parliament has reached a broad agreement over a telecom reform package, which has the goal of lowering consumer prices, but also may negatively affect data-heavy applications, like Skype. The action is also opposed by telecom giants such as Deutsche Telekom (NYSE: DT) and Telefonica (NYSE: TEF).

According to VentureBeat, the bill, which has not yet been adopted, “would create a new telecommunication regulator in Europe and enable smaller national regulators to separate dominant phone companies from their networks if needed.” But it also may put companies, like Google (NSDQ: GOOG), Yahoo (NSDQ: YHOO) and Skype, into the hot seat. That’s because the bill also specifies “conditions limiting access to and use of services and applications,” and gives operators permission to block services and applications, or restrict the use of them, at their discretion. “All they have to do is tell the subscriber in the small print of the contract,” VentureBeat reports.

What happens after that is unclear, but there’s indications that it could lead telecom companies to offer tiered services or ask content providers — that reduce voice revenue and/or cause a lot data bandwidth usage — to subsidize costs. Of course, what could happen isn’t necessarily what will happen, and if people show that net neutrality is an important part of the service and vote with their dollars companies will provide it.

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