NEW YORK (TheStreet) -- The corporate fallout from President Obama's call to regulate the Internet as a utility is already hitting full stride.
AT&T (T) CEO Randall Stephenson on Wednesday said that until the federal government can sort out its rules to administer the Web, the country's second-largest telecommunications provider would slow down its plans to expand and upgrade its broadband services in 100 U.S. cities.
"We are now starting infrastructure projects that we don't have any clarity or line of sight, in terms of what rules those will be governed under," Stephenson said at a Wells Fargo investor conference held in New York. "That can have no effect other than to cause one to pause," he said.
And if other Internet providers join AT&T, the big losers could be telecom equipment makers including Cisco (CSCO) , Ciena (CIEN) , Finisar (FNSR) , Infinera (INFN) and Juniper (JNPR) , said Goldman Sachs in a report published Wednesday. Shares of Cisco and Ciena were slipping 0.5% in Wednesday trading while Infinera was 0.8% lower and Finisar was losing 1.7%.
Obama, in a statement issued by the White House on Monday, urged the Federal Communications Commission to write rules that treat all content on the Internet equally. He called upon the FCC to classify the Internet as a public utility commensurate with Title II of the 1934 Communications Act, which requires so-called "common carriers" to conduct business "in the public interest."
Obama said the commission's rules should mandate that "neither the cable company nor the phone company will be able to act as a gatekeeper, restricting what you can do or see online."