There are plenty of fights grabbing headlines these days.

The Microsoft fight over Yahoo, the internal battles at Lehman, the fights in Congress over the fiscal recklessness of Fannie Mae and Freddie Mac, as well as the debates over the Federal Reserve's ad hoc orchestration of the JPMorgan and Bear Stearns shotgun wedding.

But another battle of a potentially larger sort has been looming that should not go unnoticed.

This one is the fight between the cable industry and the telecoms over who will dominate the pipelines into American homes, and whether competition suffices to help consumers' wallets.

This is a fight over a massive amount of money.

Revenue from consumer telecoms network services will hit $2tn globally by 2012, Instat, a market watcher, predicts. In-Stat says the strongest growth will be in the broadband and pay-TV sectors, though 60% of total revenue will be derived from consumer mobile services, the research firm notes in a report.

And this fight is a hot one, because it involves a potentially hyperactive federal government regulator making unfair moves against one of these players.

It's a fight that affects Comcast (CMCSA), Time Warner Cable (TWC), News Corp. (NWS) (parent of the Fox Business network), Cablevision Systems (CVC) and Charter Communications (CHTR). Walt Disney (DIS) and Viacom (VIA) would also be affected.

On the other side of the aisle sit the telecoms, AT&T (T), Verizon Communications (VZ), Sprint Nextel (S) and Alcatel-Lucent (ALU).

The telecoms have been steadily encroaching on the cable companies' turf in providing cable services to their telecom customers. AT&T and the cable industry are spending fast and furiously in their lobbying and public relations war not just at the federal level, but in states across the country as they try to grab cable licensing deals.

Why the Fight Matters to You

In 2001, only 30m households worldwide had access to broadband internet connections. By the end of last year that figure had grown about ten times.

The world's biggest telecoms and cable companies are rushing to add capacity to keep up with exploding demand fueled by consumers increasingly downloading bandwidth-chewing video content from YouTube, iTunes and other sites.

But the fight matters to you because competition lowers prices. The big news for most consumers isn't just access to broadband, but prices. If you can bundle your home phone, cable TV and broadband for less than the cost of even one of these services from your own cable TV company, you'd do it, right? You could save nearly half your bill if you do it right.

The Battle is Waged Locally

The cable guys know this, so does the telecom crowd. And that's why they are taking the battle to the streets. For instance, Time Warner Cable (TWC) and Verizon (VZ) are beginning a battle for TV viewers in New York City.

And despite being outspent in a lobbying war by the cable guys by about $2 mn in Tennessee, telecommunications giant AT&T finally won its legislative goal in bypassing local government cable franchise rules, even though AT&T apparently  did not get everything it wanted.

So Who's Really the Big Gun?

Thanks to its acquisitions, AT&T is now larger by market capitalization than the entire cable industry, notes Leo Hindery, a cable industry top executive. AT&T and Verizon now have market caps that are 2.4 to 4.4 times larger than any big cable player. Each serves 36% and 24%, respectively, of the country's homes and businesses.

Is the Government Interfering?

Despite the fact that the government has approved a wave of telecom mergers, Hindery says that the Federal Communications Commission has been wrecking competitive forces that may bring cable prices down by unfairly hamstringing the cable companies with discriminatory ownership caps that stop a cable company from covering more than 30% of a potential marketplace and in turn from sufficiently competing against the Bells.

Meanwhile, AT&T and Verizon are not handicapped by any federal ownership limitations.

Hindery is someone the cable and telecom market listens to. Before he became managing partner of InterMedia Partners, a New York media industry private equity fund, he was chairman and chief executive of the YES Network, which he founded as the television home of the New York Yankees.

Prior to that post, he ran Telecommunications (TCI) before it was merged into AT&T in 1999, and he became CEO of AT&T Broadband. Hindery also served briefly as interim CEO of Global Crossing, a company that belly-up due to a corporate accounting scandal.

Hindery was also presidential candidate Sen. John Edwards senior economic policy advisor for from December 2006 until February 2008 and is now an economic advisor to Democratic presidential nominee Barack Obama, the senator from Illinois.

Hindery fears this arbitrary federal cap on competition could cause less service and higher prices.

The US is Losing Out

Hindery notes that the US has dropped from its position as a global leader in per capita broadband use, now ranking 15th out of the 30 Organization for Economic Cooperation and Development countries, with less than half of  US households subscribing to broadband services.

Hindery says it's time for the federal government to stop this craziness and level the playing field between the cable and telecoms to unlock potential economic growth.

Hindery says that independent estimates show that universal broadband adoption would generate $500 bn in economic growth and more than 1.2 mn new high-wage jobs. Broadband technology, he says, makes all sorts of industries more productive, connecting people to information and services on a revolutionary scale.

Despite Government Help, Telecoms Need to Catch Up

Comcast and Cablevision have both shown growth in new voice lines, as well as digital, video and broadband lines.

The telcos though are hurting.

Verizon in its last quarter lost 1.7 mn access lines and 171,000 DSL lines, leading Bernstein Research analyst Craig Moffett to note that this was the first time a major U.S. telco reported a quarterly decline in DSL lines, although it did add 176,000 video subs for its FiOS service and 187,000 FiOS broadband lines, though growth was slower than in the first quarter.

Also new net customer subscribers for Verizon's FiOS broadband were a teensy 6% higher versus a year ago, even though Verizon expanded its territory by a third.

Meanwhile, AT&T lost 993,000 residential primary access lines in the quarter, while adding 170,000 U-verse video customers.

So who is really in the catbird seat?