The Federal Communications Commission (FCC) may change rules regulating phone companies' internet services, affecting the ability of independent internet providers to offer high-speed service.

Under the proposed change, phone companies no longer would be subject to common carrier regulations on their internet lines, including rules that require them to lease capacity to competitors. In essence, this would hurt smaller mom and pop internet service providers (ISP), while offering an incentive to larger phone companies to augment their broadband networks.

"Right now, cable modem providers operate free of most regulation. As you know, this not the case for most telcos who must provide their services subject to legacy regulations. This disparity continues to distort the marketplace," says FCC Chairman Kevin Martin.

The change stems from a Supreme Court decision in June upholding the FCC's authority to regulate cable internet services. The FCC applied a standard giving cable companies exclusive access over their broadband internet lines and the ability to exclude competitors.