Moody's says FCC internet privacy proposal could harm broad internet providers

An AT&T Logo is pictured on the side of a building in Pasadena, California, January 26, 2015. REUTERS/Mario Anzuoni

(Reuters) - Ratings agency Moody's Investors Services said Tuesday a proposal by U.S. communications regulators to impose privacy restrictions on broadband providers like Verizon Communications Inc VZ.N, AT&T Inc T.N, Comcast Corp CMCSA.O and Charter Communications Inc CHTR.O is "credit negative."

Tom Wheeler, chairman of the U.S. Federal Communications Commission, last week proposed barring providers from collecting user data without getting consent as part of a privacy proposal for internet use.

Moody’s said internet providers could be “severely handicapped” in their “ability to compete with digital advertisers such as Facebook and Google.”

Under the FCC proposal, Google, Facebook, Twitter and other websites would be able to continue to “collect the same type of data from consumers who access their websites” without user consent, Moody’s said.

“We believe this to be a long-term risk to the current

TV advertising business model, as well as all broadband providers whom also have ad sales exposure,” Moody’s said.

Reporting by David Shepardson; Editing by Chizu Nomiyama