EU telecom regulators adopt strict net neutrality rules, industry dismayed

* EU adopted net neutrality rules last year

* EU regulators drew up guidelines to enforce them

* Telecoms firms limited in how they treat different types of data

By Julia Fioretti

BRUSSELS, Aug 30 (Reuters) - European Union telecoms regulators adopted strict rules on Tuesday limiting how telecoms firms like Vodafone and Orange (LSE: 0OQV.L - news) can prioritise some types of Internet traffic, dealing a blow to an industry hoping to boost revenues.

The guidelines on net neutrality - the principle that all Internet traffic should be treated equally - were welcomed by Internet activists. The new rules will ensure the web remains an open platform and will not become a two-speed highway, benefiting only companies with deep pockets that can pay for prioritised delivery, they said.

The European Union adopted its first ever net neutrality rules last year and Tuesday's guidelines will be used by regulators to enforce the law.

Telecoms companies will only be able to offer so-called specialised services - such as connectivity for driverless cars and Internet-connected devices - over dedicated network capacity if it is "objectively necessary" and only if it does not negatively affect the Internet.

The telecoms industry is seeking to increase revenues by offering specialised services that need a guaranteed level of quality, to offset declining turnover from its traditional telephony business. Companies had pushed hard for leeway allowing them to prioritise some types of data over others.

Services such as high-quality voice calling on mobile networks, live television delivered over the Internet and remote surgery, or telesurgery, are likely to be allowed as specialised services, according to the guidelines.

Regulators will assess whether a service needs to be delivered separately from the rest of the Internet on a case-by-case basis.

The telecoms industry said it was essential to avoid "restrictive interpretations" of Europe's net neutrality law.

"Let's make sure the implementation of net neutrality rules does not hamper new applications and services," said Lise Fuhr, director general of ETNO, a telecoms lobbying group representing operators including Deutsche Telekom (LSE: 0MPH.L - news) , Telefonica (LSE: 826858.L - news) and Telecom Italia (Other OTC: TIAJF - news) .

The regulators also limited the extent to which telecoms operators may exempt some applications, for example Facebook (NasdaqGS: FB - news) , from a customer's data usage, a practice known as zero-rating.

Operators will only be able to offer some applications completely free until the customer has hit their data cap.

So, customers would not be able to continue using Facebook or, say, Spotify, for free once they have used up all the data in their subscription.

"Europe is now a global standard setter in the defence of the open, competitive and neutral Internet", said Joe McNamee, executive director of European Digital Rights, an association of civil and human rights organisations. (Reporting by Julia Fioretti; Editing by Susan Fenton)