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For 3.7+ (where iterable objects are supported), I suggest:
1. Document the problem as a limitation of handlers like AbstractBasicAuthHandler, and consider raising an exception instead of trying to upload a file or iterable a second time.
2. Clarify the behaviour for different types of the "urllib.request" data parameter. I understand "file-like objects" means objects with a "read" attribute, and the "read" method is called in preference to iteration or treating the parameter as a "bytes" object.
Despite the bug title, I don’t think the library should mess with the file position. Certainly not when making a single request. But it should already be possible for the caller to supply a custom iterable object that resets the file position:
class FileReiterator:
 def __iter__(self):
 self.file.seek(0)
 while True:
 chunk = self.file.read(self.chunksize)
 yield chunk
 if len(chunk) < self.chunksize:
 break