updated 4/18/2006 11:13:59 AM ET 2006-04-18T15:13:59

Media and technology companies warned Tuesday that new European Union broadcasting rules could restrict the growth of emerging media formats such as video broadcasts through the Internet and mobile phones.

An alliance of companies, including ITV PLC, Yahoo Inc., Vodafone Group PLC, Intel Corporation, and Cisco Systems Ltd., warned a European Commission proposal to impose rules for traditional broadcasters on new media providers could have "unintended consequences" and hurt investment.

The draft legislation proposed in December aims to level the playing field by applying the same rules to everyone.

However, Intellect, a London-based business lobby representing technology companies, said Tuesday that it would be difficult enforce strict rules designed for television broadcasters on video transmitted over the Internet or on third-generation mobile phones.

The EU proposal could ultimately mean less investment for an area that has enormous growth potential — leading to fewer firms, less innovation and higher prices, the group said in a statement.

"Many services unconnected to scheduled broadcast television will be unintentionally caught," it said.

"Citizen media such as blogs, video-casts and the like are one of the most exciting developments enabled by new technology.  This phenomenon has the potential to create new businesses ... but this proposed regulation severely risks stunting its growth," it said.

EU officials were not immediately available Tuesday to respond to the criticism, but the EU executive has insisted that it has no plans to regulate the Internet.

The European Internet Services Providers Association is also concerned about the "lack of clarity" in the EU draft law and is unsure what kind of technologies would be governed by the stricter rules, the association's Secretary General Richard Nash said.

"The U.K. government has taken a pro-active line stimulating the debate.  In other countries, there's less awareness of it," he said.

The law will need the backing of the European Parliament and 25 European Union governments before it can enter into force.  The Parliament is likely to vote on it later this year.

Copyright 2006 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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