Some of the world's biggest telecommunications firms are this week poised to win a round in their global slugfest with Silicon Valley—at least in Europe.

The European Union's executive arm is expected this week to propose subjecting online services like Microsoft Corp.'s Skype and Facebook Inc.'s WhatsApp to some of the same rules that have long regulated the telecoms business, according to tech and telecom lobbyists briefed recently by EU officials.

Skype, for example, may have to offer emergency-calling services for European customers who use its online-voice service to dial traditional phone numbers. In cases where it assigns users telephone numbers—allowing for the receipt of calls from traditional phones—it could also be required to let those users take their numbers with them if they decide to move to a different provider.

Chat-service WhatsApp, meanwhile, could be subject to new oversight from national telecom regulators on topics like network security.

The draft proposals are still in flux. But what is clear is that the EU is proposing to move in a direction telecom executives have been pushing for years. The executives say they want a "level playing field" with tech companies amid all the new, mostly free, online communications services that they perceive to have undermined telecoms' traditional voice and text services.

They have long wanted the EU to repeal some of the industry-specific regulations they face, particularly on user privacy. Failing that, they have pushed to extend some of the same telecom rules to internet-based services.

"It would be better to remove rules for us," said one telecom executive who has been briefed on the proposals. "But this is real progress."

A European Commission spokeswoman said the proposed rules, which also seek to spur improvement in the continent's high-speed-internet networks and cellular-airwave-allocation process, are part of the EU's strategy to "encourage investments in next-generation networks, set the right conditions for modern digital networks and provide a level playing field for all market players."

The proposals still face potentially years of debate and changes before adoption. But they represent a rare boost to telecommunications companies in their skirmishes with Silicon Valley's powerful lobbying machinery.

While telecom executives increasingly acknowledge that services like Snapchat and WhatsApp help them sell more-expensive data plans, in many parts of the world they have also been on the defensive about how those so-called "over-the-top" services have eaten into their traditional offerings.

The two sides have also clashed over regulatory issues including net neutrality in the U.S., connecting the developing world, and the question of who will profit from the detailed information both sets of companies have on the online and offline habits of their customers.

The battle lines are particularly clear in Europe, where carriers were slower than those in the U.S. in switching to make money from selling data rather than voice and texts. Telecom giants, like Spain's Telefonica SA and Germany's Deutsche Telekom AG, have long chafed that their services face industry-specific taxes and restrictions that similar offerings from big tech firms don't.

Big tech companies reject that notion. They argue that while they sometimes offer comparable services, their businesses contrast starkly—and need different rules.

"This isn't a level playing field—it's a layered playing field, and the rules need to reflect that," said an executive at a U.S.-based tech firm.

Tech firms say oversight from the EU's national telecom regulators could raise costs and lead to jurisdictional disputes, discouraging them from launching new services.

"You could see these cheaper calling options and video options disappearing from the markets," said James Waterworth, vice president for Europe at the U.S.-based Computer & Communications Industry Association, a lobby group that represents Microsoft, Facebook and Alphabet Inc.'s Google.

The new proposals are in part the fruit of telecommunications industry lobbying over several years on issues that go beyond relationships with tech firms.

Telecom lobbyists say they are optimistic the EU will propose rules that would make it easier for big telecom firms to charge more for access to new networks, something lobbyists for incumbent telecom firms say will give them incentives to invest in faster internet connections.

"We have high hopes and expectations that it will create the right incentives to invest," said Steven Tas, chairman of the European Telecommunications Network Operators' Association.

European telecom firms aren't getting everything they are seeking. The EU, which had already passed legislation to eliminate telecoms' lucrative roaming fees in the bloc, retreated last week on a rule that would have limited such free roaming to 90 days a year, after widespread outcry from consumer groups.

Another hot button is whether so-called lawful access rules, which require telecommunications firms to allow police to install wiretaps, should be expanded to tech firms. It isn't clear if the EU's proposals would include such a change, but the possibility raises the specter of renewed fighting over whether tech firms should be forced to build in back doors to encrypted services, both telecom and tech lobbyists say.

"There's a lot of money that operators invest in data access for authorities," said one telecommunications executive. "It should be same services, same obligations."

Write to Sam Schechner at sam.schechner@wsj.com and Stu Woo at Stu.Woo@wsj.com

 

(END) Dow Jones Newswires

September 11, 2016 21:15 ET (01:15 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.
Telefonica (NYSE:TEF)
Historical Stock Chart
From Aug 2024 to Sep 2024 Click Here for more Telefonica Charts.
Telefonica (NYSE:TEF)
Historical Stock Chart
From Sep 2023 to Sep 2024 Click Here for more Telefonica Charts.