Regulation has become telecom’s central issue, said Bernstein Research analyst Craig Moffett. ...

Regulation has become telecom’s central issue, said Bernstein Research analyst Craig Moffett. He cited recent developments including the FCC’s wireless competition report, a forthcoming proposal from some key lawmakers to rewrite the 1996 Telecom Act and a commission proceeding re-examining media cross-ownership rules. Letters from Congress urging the FCC to stand down in its quest to regulate broadband under Title II were followed by a strong rebound rally in cable shares last week, Moffett said. Investors presumably think the rules coming from the “re-regulatory fervor” in Washington will be benign, he said. But asking Congress to step in is a high-risk gambit, Moffett said: The FCC is moving forward with reclassification, even if now on more uncertain ground. A new Telecom Act would take more than a few years to craft, and it’s “no slam dunk that what (eventually) comes out will be any better than Title II from the FCC,” he said. The question for investors is more than just whether there will be a change in the rules, Moffett said: “It is whether we are witnessing a fundamental change in ideology.” He said, “After all, the rules themselves are simply the manifestation of far more sweeping policy goals."