Netflix, Inc., Google Inc Relieved After Net Neutrality Law By EU

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Google Inc (NASDAQ:GOOG) and Netflix, Inc. (NASDAQ:NFLX) are now relieved from paying more to EU telecom operators for using their services. In a new law is enacted by the European Union, telecom operators are restrained from charging more from data-intensive service providers such as Google and Netflix for using their network.

“Amendments brought in by an alliance of Socialists, Greens and Liberals closed down loopholes that would allow the creation of a two-tier internet,” said Jim Killock, executive director of the Open Rights Group.

Google, Netflix relieved

The verdict means that internet service providers (ISPs) must view all web traffic as equal, instead of selling high bandwidth to larger organizations. Those in favor of the net neutrality laws celebrated the victory, arguing that the verdict would ensure a level playing field for new internet companies to compete better with bigger rivals.

Killock said that the verdict implies that the net neutrality, for the first time, has been properly defined and protected by the law. It also means that all varieties of internet traffic should be treated as equal.

The latest reforms also include provisions to do away with the roaming charges in the region by 2015. It is expected that the reforms will be approved before European elections, which are scheduled for May. The new rules, though already viewed as law, require approval from all 28 member states before they come into effect.

Telecom companies to appeal further

The ruling has been opposed by telecom companies, including Vodafone, who claim that the ruling will put them at a comparative disadvantage when compared to their U.S. counterparts.

In U.S., net neutrality regulations are not as stringent as in Europe. Netflix and other similar services are forced to pay more for the ISPs to give better service to customers. This trend has led many to believe that eventually the extra cost will be shifted towards subscribers.

In the U.S., AT&T earlier rejected demands from Netflix, Inc. (NASDAQ:NFLX) asking the telecom company to bear all the investments required to build an infrastructure facilitating subscribers to access fast download speeds. Although Netflix eventually agreed to share the cost, it also asked the U.S. government to work on better net neutrality laws.

The telecom industry, however, certainly plans to continue the political and legal battle.

via: Digital Spy

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