By Ryan Knutson and Thomas Gryta 

The last time the Federal Communications Commission tried to impose rules on net neutrality, Verizon Communications Inc. decided to sue the government alone.

This time, it is likely to have company.

Big telecom firms are mobilizing for a fight now that FCC Chairman Tom Wheeler has indicated he will propose to regulate the Internet as a public utility--including data traveling over wireless networks, which the industry has fought to keep separate.

The regulator's comments, at a giant industry conference in Las Vegas late Wednesday, threaten the industry's multiyear strategy of shifting from heavily regulated businesses like phone calls to data services that enjoy a lighter touch.

Industry trade groups that represent wireless carriers, telecom companies and cable providers would likely lead the charge.

"Of all the options on the table at the FCC, it is the most extreme and most dangerous legal path forward," said Helgi Walker, the lawyer who beat the FCC twice in legal challenges brought by Comcast Corp. and Verizon. "There is no need to go there."

Mr. Wheeler said he would present the new rules to the commission Feb. 5 and call a vote on Feb. 26.

Reclassifying broadband as a public utility--or in regulatory parlance, as a telecommunications service under Title II of the 1934 Telecommunications Act--is something public interest groups have been advocating for years, as broadband service has become as important to most Americans as telephone lines were in the last century.

Strong net-neutrality rules would require the companies that control Internet lines to treat content equally. Carriers say they have no interest in blocking content, but want to have the option to develop services that would let companies like health-care services pay for priority delivery. They also worry Title II would give the FCC the power to regulate prices or require them to let rivals resell Internet access using wires they built.

More subtly, carriers like Verizon and AT&T have invested billions of dollars in converting their copper networks into data networks that aren't as heavily regulated. Verizon spent billions building out its fiber-based FiOS Internet service, and AT&T launched U-Verse Internet service. Both companies began replacing the legacy equipment at the core of their networks with newer technology that was subject to less regulatory oversight.

Ivan Seidenberg, Verizon's chief executive until 2011, said at an industry conference a little over a year ago that those investments were driven in large part because of regulations. There "was a gap in the rules at the time," Mr. Seidenberg said. "It turned out pretty well."

While the FCC isn't expected to enforce some of the most onerous regulations, like price controls when it comes to data networks, carriers worry future commissioners might be less forgiving.

The FCC signaled it would consider Title II regulation last summer, but was spurred forward in November, when President Barack Obama took the unusual step of publicly calling for the Internet to be regulated as a utility.

By early December, telecom and cable companies were receiving signals that Title II was inevitable. Mr. Wheeler's comments at the CES conference Wednesday were taken as confirmation.

"The issue here is how we make sure that consumers and innovators have open access to networks," Mr. Wheeler said. "There is a way to do Title II right, that says there are many parts of Title II that are inappropriate, and would thwart investment, but that a model has been set in the wireless business," Mr. Wheeler said.

The industry will have its work cut out for it in court if the FCC decides to go that route. In previous challenges, the industry has won because the courts questioned the FCC's regulatory basis for imposing rules on Internet traffic.

Reclassifying the Internet under Title II would address that issue, and analysts at Guggenheim Securities said the FCC wins the majority of challenges to its rules.

Write to Ryan Knutson at ryan.knutson@wsj.com and Thomas Gryta at Thomas.Gryta@wsj.com

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