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AT&T, Comcast May Fend Off Web Rules Under Republicans

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FCC Chairman Julius Genachowski
FCC Chairman Julius Genachowski's honeymoon with Congress may be over when Republicans control the House. Photographer: Andrew Harrer/Bloomberg

Nov. 3 (Bloomberg) -- AT&T Inc., Verizon Communications Inc. and cable companies led by Comcast Corp. may find it easier to block Internet-service regulations with Republicans in charge of the U.S. House, analysts said.

Republicans have warned that Federal Communications Commission Chairman Julius Genachowski’s proposed net-neutrality rules could stifle investment. The regulations would forbid providers of high-speed Internet service, or broadband, from interfering with subscribers’ Web traffic.

“Most everything -- particularly net neutrality -- gets harder” for Genachowski with Republicans dominating the House that convenes next year, Jeffrey Silva, a Washington-based analyst with Medley Global Advisors LLC, said in an e-mail.

FCC spokeswoman Jen Howard declined to comment.

Republicans retook the House of Representatives yesterday with a net gain of at least 60 seats, their biggest increase since 1938. They also scored a net gain of at least six seats in the Senate, though Democrats retained control of that chamber.

The FCC’s Democratic majority is unchanged by the elections, and Genachowski should move ahead to pass “strong net-neutrality rules,” Joel Kelsey, a policy analyst with the Washington-based advocacy group Free Press, said in an interview.

“Chairman Genachowski’s honeymoon with Congress is over,” Andrew D. Lipman, a Washington-based partner with the law firm Bingham McCutchen LLP, said in an interview. The Democratic FCC chairman could face “more hearings, more scrutiny” from the new Congress, Lipman said.

‘Explain Why’

Representative Joe Barton of Texas, the top Republican on the House Energy and Commerce Committee, is likely to become chairman of the panel, Lipman said.

Barton said in an e-mail that one of his first actions “will be to require the Obama administration Federal Communications Commission to explain why it thinks the Internet needs federal government regulation for the first time.”

The FCC is unlikely to give up on net-neutrality regulations because such rules were at the top of candidate Obama’s technology policy list, Paul Gallant, a Washington-based analyst with MF Global Holding Ltd., said in an interview.

Verizon will work with Congress and the administration for “sound, consumer-friendly policies that enable continued broadband expansion and investment,” Washington-based spokesman David Fish said in an e-mail. AT&T spokesman Michael Balmoris had no comment. Brian Dietz, a spokesman for the National Cable & Telecommunications Association, a Washington-based trade group for cable companies, declined to comment.

AT&T rose 12 cents to $29.06 at 4 p.m. in New York Stock Exchange composite trading, and Verizon gained 19 cents to $32.99. Comcast lost 1 cent to $20.67 in Nasdaq Stock Market trading.

To contact the reporter on this story: Todd Shields in Washington at tshields3@bloomberg.net

To contact the editor responsible for this story: Larry Liebert at lliebert@bloomberg.net.

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