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AT&T, Comcast plan 'all out war' on Obama's Internet policy: report

Will Comcast 'walk away' from TimeWarner deal?

The big telecom carriers "and their proxies in the current and new Congress, the media, industry associations, and think tanks, as well as the Republican FCC Commissioners, will launch an all out war" on President Obama's attempt to prod the Federal Communications Commission into guaranteeing "Net neutrality" (no charging higher rates for faster service to favored programmers), and to regulate Internet service as a utility, writes Paul de Sa, Ph.D., in a report to clients of Bernstein Research today.

(For its part, Comcast says it agrees with the President's goals -- but not with his proposal to regulate broadband Internet the way it does telephones and other telecom services under Section II of the Communications Act. "This is not game playing or sophistry," Comcast adds. Read the company's statement here. More on who supports, who opposes"Net neutrality" here.)

They will fight hard -- despite the fact that Obama doesn't want the FCC to set cable or Internet rates, hasn't set guidelines for connection deals between Internet providers, or set targets for other stern government actions that consumer-activists want and corporations dread: indeed the new initative will most likely slow down the FCC's shuffle toward a "net neutrality" policy, de Sa adds.

Comcast shares are down a couple bucks on the news. But the industry isn't defenseless: the companies have many friends in Washington, especially among the resurgent Republicans; and they are likely to throw rocks at Obama in the form of "interminable hearings," FCC budget cuts, law proposals tied to the federal budget and other key legislation, according to the reports.

So de Sa thinks worries Obama will end Big Telecom's Internet dominance are exaggerated. But he also agrees the confusion all this creates is likely to make things "worse before they get better." And the President has further complicated Comcast's planned purchase of TimeWarner Cable, making it easier for Comcast "to walk away from the deal" if they'r getting tired of all the drama. We'll know more, da Sa concludes, when the FCC finishes taking comments on net neutrality rules, around Thanksgiving.