Whether or not that’s true is certainly arguable. What is not arguable is that usage-based pricing is better for cable operators and for wireless carriers. Comcast Corp. (NASDAQ: CMCSA) last week said that it planned to drop its 250-gigabyte data plan and introduce a new pricing scheme that would allow its customers to consume 300 gigabytes of data at a base rate and pay $10 for each 50 gigabytes customers use above that limit. The usage-based plan could squeeze streaming video providers like Netflix Inc. (NASDAQ: NFLX) that have built their entire business models on essentially unlimited bandwidth. Streaming a 2-hour movie in HD consumes about 4 gigabytes.

It’s probably only a matter of time before other cable providers like Time Warner Cable Inc. (NYSE: TWC) and Cablevision Corp. (NYSE: CVC) adopt similar plans. Wireless carriers AT&T Inc. (NYSE: T) and Verizon Wireless, the joint venture between Verizon Communications Inc. (NYSE: VZ) and Vodafone Group plc (NASDAQ: VOD), appear set to announce shared data plans that will allow more than one device to share usage on a single data plan. The carriers already charge more for usage above the plan limit.

Genachowski appears to believe that usage-based plans will level the playing field between the cable operators and the wireless carriers. Time Warner Cable experimented with a usage-based plan in 2009, but decided not to adopt the plan because customers hated it. Customers will still hate the plans, but without FCC backing customers no longer have any heavyweight help.

Comcast and the other cable companies will argue that the 300-gigabyte limit affects a small number of very high usage customers. They will also argue that by adopting a usage-based plan the vast majority of customers will pay less. But the data plan will also include internet access from computers, smartphones, and tablets, as well as Wi-Fi access from the local coffee shop.

Comcast has not yet announced pricing for its usage-based plan, but the odds of prices actually dropping don’t seem particularly good. Especially because the company is throwing in another 50-gigabytes of usage.

Cable companies need to prevent customers from “cutting the cord” and choosing to use their wireless data plans to drive home entertainment. An Internet TV box that really works is their biggest nightmare.

But if the cable guys and the wireless carriers can grab enough wireless spectrum and do enough cross-licensing deals and keep the content creators happy, the cost to consumers will not fall. The cable and wireless industries will appear to be competitive, but they’ll really operate an oligopoly and some small carriers and cable companies will be allowed to stick around to make things look good by providing service to low density markets. If the FCC really wants competition in the wireless business, then the agency better stick up for consumers, not cable or wireless providers.

Paul Ausick

The U.S. allows China to buy treasuries directly without banker assistance. (Reuters)

MF Global paid Jon Corzine $8 million in the year before it collapsed. (Reuters)

The new BrandZ annual study of brand values puts Apple (NASDAQ: AAPL) in the top position, followed by McDonald’s (NYSE: MCD), Coca-Cola (NYSE: KO), IBM (NYSE: IBM), Microsoft (NASDAQ: MSFT) and Google (NASDAQ: GOOG). (Reuters)

Trading losses at JP Morgan (NYSE: JPM) help competitors make money. (Reuters)

Comcast (NASDAQ: CMCSA), Time Warner Cable (NYSE: TWC) and Cablevision (NYSE: CVC) will share Wi-Fi systems to give customers more access to wireless broadband. (WSJ)

Many traders blame Morgan Stanley for overpricing Facebook shares. (WSJ)

France and Germany remain in a battle over the future of austerity in the region. (WSJ)

Facebook’s largest hurdle with investors remains its mobile strategy. (WSJ)

The European Union gives Google little time to answer charges about its business practices, which include privacy matters. (WSJ)

Formula One Group will go public on the Singapore Stock Exchange to raise $2.5 billion. (WSJ)

Zynga (NASDAQ: ZNGA) shares are hurt by the drop in Facebook’s stock. (WSJ)

JP Morgan will kill is share buybacks because of trading losses. (NYT)

Eastman Kodak loses its patent case against Apple and Research In Motion (NASDAQ: RIMM). (NYT)

France will press its neighbors to create eurozone-wide bonds. (FT)

Douglas A. McIntyre

Verizon Wireless, a joint venture between Verizon Communications Inc. (NYSE: VZ) and Vodafone Group plc (NASDAQ: VOD), wanted the additional spectrum to accommodate future growth. That was no particular show-stopper as other wireless companies have been allowed to accumulate spectrum against prospective future needs. SpectrumCo, jointly owned by Comcast Corp. (NASDAQ: CMCSA) and Time Warner Inc. (NYSE: TWX) among others, and Verizon Wireless had also agreed to a cross-licensing deal where the two cable providers would be able to bundle Verizon Wireless’ service and the wireless carrier would be able to sell the cable companies’ content in a bundle.

Smaller rival wireless providers like MetroPCS Communications Inc. (NYSE: PCS), Sprint Nextel Corp. (NYSE: S), Deutsche Telekom AG’s (OTC: DTEGY.PK) T-Mobile USA division, and Leap Wireless International Inc. (NASDAQ: LEAP) complained about the hoarding of spectrum. As a result, the Federal Communications Commission (FCC) is considering requiring Verizon Wireless to divest some of its current spectrum before the deal is approved. A report at Bloomberg News cites “people familiar with the matter” for the information.

The FCC and the US Department of Justice, which must also approve the deal, want to maintain competition in the wireless and cable markets to protect consumer choice and prevent monopolistic pricing. But depending on how much spectrum Verizon Wireless must shed, there may be only one potential buyer — big rival AT&T Inc. (NYSE: T), which has stayed out of the fray so far, probably because it has equally big plans now that its $39 billion deal for T-Mobile has been killed.

The cross-licensing deals are also being investigated by the DoJ to determine if they threaten competition. The threat to competition and monopolistic pricing for consumers may be greater here than in the actual spectrum purchase. The nationwide reach of wireless networks and consumer demand for mobile resources opens up a whole new profit potential for Comcast and Time Warner. At the same time Verizon gets to offer programming that makes the company’s network a more attractive option, particularly if it can undercut competitive pricing.

The nuts and bolts of this acquisition and its fallout are nearly impossibly arcane. But the government’s decision will touch nearly everyone in the US. And that’s why the deal is so important.

Paul Ausick

We get more evidence of the switchover today from Charter Communications Inc. (NASDAQ: CHTR), which reported results this morning including miss on an already awful estimated EPS loss of -$0.57. Charter’s EPS loss came in at -$0.95. The company added a scant 20,000 customers for video in the first quarter compared with 141,000 new customers for Internet service.

As we noted last week in our look at earnings from Comcast Corp. (NASDAQ: CMCSA), bundling of services and content is becoming the new way of doing business in the space once dominated by cable providers. For example, Time Warner Cable Inc. (NYSE: TWC) and Comcast both have long-term deals with Walt Disney Co. (NYSE: DIS) to offer WatchESPN, the online and mobile version of Disney’s ESPN network. The cable providers are hoping that the offer of free mobile content will stem the flow of unsubscribers.

Verizon Communications Inc. (NYSE: V) and AT&T Inc. (NYSE: T) also offer high-speed digital content and are working on deals to offer new bundles to customers. Verizon’s attempt to acquire more wireless spectrum in its $3.6 billion deal for SpectrumCo gives the company’s wireless carrier, Verizon Wireless, the opportunity to bundle programming from Comcast and Time Warner Cable along with access to mobile broadband.

The cable providers, in turn, are able to offer a bundle to their customers that now includes Verizon’s high-speed mobile broadband. It should be no surprise that smaller carriers like MetroPCS Communications Inc. (NYSE: PCS), Leap Wireless International Inc. (NASDAQ: LEAP), and Frontier Communications Corp. (NASDAQ: FTR) are struggling.

Research firm Convergence Consulting recently released studies on broadcast and cable TV and bundling. Between 2000 and 2009, cable TV subscriber additions averaged 2 million a year. In 2010 additions totaled 272,000 and in 2011 additions totaled just 112,000. The firm estimates that 2.65 million cable subscribers “cut the cord” between 2008 and 2011, choosing instead to rely on “over-the-top” services from Netflix Inc. (NASDAQ: NFLX) and others. By the end of this year, the firm estimates there will be 3.58 million cord cutters.

Convergence Consulting estimates that the audience for free online/mobile viewing has plateaued at 19% of all TV viewing. But that seems low, especially in light of the cross-licensing deals between the wireless carriers and the content providers like Disney and the cable networks.

The other thing that could raise that plateau is another technological wonder from Cupertino. Rumors of an “insanely great” Internet TV box from Apple Inc. (NASDAQ: AAPL) have been rampant for months, if not years. There are already several options available for these ‘over-the-top’ boxes, but if Apple were to come up with a killer piece of hardware, the ground could shift in a hurry.

Of course the TV and movie industries have learned from the music industry that Apple drives a hard bargain, and they can’t let themselves give up currently large broadcast revenues in exchange for much smaller online sales. What Apple should hope for is that a game-changing device with one or two significant content partners will convince consumers to force the rest of the media moguls to toe the line.

The transition from wired high-speed broadband connections to wireless connections is just starting. There are lots of different companies involved and the one or two with the deepest pockets or that are able to discern what the future holds will prosper. As for the rest, who knows?

Paul Ausick

Comcast posted EPS of $0.45 versus an estimate of $0.42. Revenue grew nearly 23% year-over-year to $14.89 billion, again higher than the consensus estimate of $14.43 billion.

The cable companies are losing subscribers to Verizon Wireless, a joint venture between Verizon Communications Inc. (NYSE: VZ) and Vodafone plc (NASDAQ: VOD) and AT&T Inc. (NYSE: T) both of which offer high speed wireline broadband service in addition to voice and mobile services. And the competition is about to get even keener.

Verizon Wireless’ $3.6 billion bid for additional wireless spectrum from SpectrumCo LLC, a joint venture of Comcast, Time Warner Cable, and privately-held Bright House Networks and Cox Communications Inc., is about to change the landscape. The additional spectrum is what the other wireless carriers and the Federal Communications Commission are examining with a fine-toothed comb, but the cross-licensing agreements that give Verizon and Comcast and Time Warner Cable the ability to sell each other’s products are, perhaps, the bigger deal.

Although the FCC has not yet ruled on Verizon’s acquisition, the companies are acting like the deal is done. A Verizon-Comcast cross-licensing deal in San Francisco adds digital TV to its standard triple-play offer. AT&T, which offers its wireline U-verse high-speed service in San Francisco, has no comparable offer.

Similar deals between Comcast and Verizon are already in place in Portland, Oregon, and Seattle and Spokane, Washington. Verizon and Time Warner have launched a similar bundle in Raleigh, North Caroline, Kansas City, and Columbus and Cincinnati, Ohio. Subscribers can bundle cable services with Verizon Wireless mobile phone service and get the same deal from either the cable company or Verizon.

Cable-like companies such as Netflix Inc. (NASDAQ: NFLX), Dish Network Corp. (NASDAQ: DISH), and DirecTV (NASDAQ: DTV) will also find the going getting tougher. Netflix is at the mercy of content providers like Comcast and Time Warner, which are likely to drive Netflix’s costs higher while lowering their own. Verizon could throttle network speeds for Netflix streaming videos, and although the carrier would eventually be stopped, it might be too late for Netflix. The satellite companies, likewise, could find themselves paying more for content.

As for AT&T’s U-verse and Verizon’s FiOS, neither is as valuable nor has as well-defined a growth path as wireless services. Comcast’s Xfinity broadband service will disappear eventually and be subsumed by the Verizon wireless network.

People want mobility and that means wireless services. At first, the deals between Comcast and Verizon and Time Warner and Verizon will be appealing because the companies will be offering free or low-priced smartphones as well as the convenience of a single provider for all of a customer’s communications needs. But as smaller competitors like MetroPCS Communications Inc. (NYSE: PCS), Leap Wireless International Inc. (NASDAQ: LEAP), and even T-Mobile USA, the US arm of Deutsche Telekom AG (OTC: DTEGY) fall by the wayside, large markets will have at most two choices, Verizon or AT&T, and small markets will not get even that.

The new cross-licensing services launched too late to have any impact on first quarter results, but the deals should make some kind of showing on second quarter results. The smart money says that the deals will be winners.

Comcast’s shares are down -2.7% this morning at $29.76 in a 52-week range of $19.19-$30.88.

For those interested in the Verizon-SpectrumCo deal, the FCC web site has all the relevant documents under Docket Number WT 12-4. To date 539 comments have been filed and thousands of pages of documents.

Paul Ausick

Apple Inc. (NASDAQ: AAPL) Raised to Outperform at Scotia; Maintained Buy with $775 target at Canaccord Genuity.

Bank of Ireland (NYSE: IRE) Cut to Neutral at Credit Suisse.

Buffalo Wild Wings (NASDAQ: BWLD) Raised to Buy at Deutsche Bank.

Cymer Inc. (NASDAQ: CYMI) Raised to Outperform at Credit Suisse.

Domino’s Pizza (NYSE: DPZ) Raised to Neutral at BofA/ML.

Ethan Allen Interiors Inc. (NYSE: ETH) Raised to Buy at Stifel Nicolaus.

Fifth Third Bancorp (NASDAQ: FITB) Raised to Buy at Deutsche Bank.

Intuitive Surgical, Inc. (NASDAQ: ISRG) Started as Outperform at Raymond James; Named as Bull of the Day at Zacks.

J. C. Penney Company, Inc. (NYSE: JCP) Raised to Market Perform at BMO.

Leggett & Platt, Inc. (NYSE: LEG) named Bear of the Day at Zacks.

McDonald’s Corporation (NYSE: MCD) Cut to Hold at Argus.

Regions Financial (NYSE: RF) Raised to Buy at Rochdale Securities.

Symantec Corporation (NASDAQ: SYMC) Cut to Sector Perform at RBC.

Time Warner Cable (NYSE: TWC) Started as Buy at Citigroup.

United Technologies (NYSE: UTX) Raised to Buy at Argus.

Wal-Mart Stores, Inc. (NYSE: WMT) Cut to Hold at Argus.

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JON C. OGG

Time Warner Cable (NYSE: TWC) may end its deal with Current TV because of low ratings. (Reuters)

The Securities and Exchange Commission is examining stock exchanges for failing to disclose changes in their rules. (Reuters)

Worries about the eurozone increase because of a troubled debt auction by Spain. (Reuters)

New York State examines insurers for forcing products on homeowners. (WSJ)

As Russia joins the World Trade Organization, U.S. businesses have done little to exploit its markets. (WSJ)

Google’s (NASDAQ: GOOG) YouTube and Viacom (NASDAQ: VIA) set a movie rental deal. (WSJ)

The European Central Bank expresses concerns about inflation in the region. (WSJ)

Dynegy Holdings (NYSE: DYN) is close to a deal with bondholders that would take the value of equity to zero. (WSJ)

Carl Icahn attacks the board of drug maker Amylin (NASDAQ: AMLN) for rejecting a takeover offer from Bristol-Myers (NYSE: BMY). (WSJ)

The market for pooled junk bonds rises quickly. (WSJ)

JP Morgan’s (NYSE: JPM) CEO Jamie Dimon made $23 million last year, which is tops among bank chief executives. (WSJ)

A study by the IMS Institute for Healthcare Informatics shows that Americans have cut use of doctors and prescription medications. (NYT)

An increase in U.S. crude stocks pushes oil prices down. (FT)

Morgan Stanley (NYSE: MS) meets with Moody’s in an attempt to stop a ratings cut. (FT)

Yahoo! (NASDAQ: YHOO) cuts 2,000 jobs as part of a restructuring. (Bloomberg)

Douglas A. McIntyre

Under the plan, a pay-TV subscriber could stream purchased programming directly to a mobile device. Verizon’s CEO, Lowell McAdam, even used the frightening phrase (to cable operators at least), “a la carte” programming. Cable networks have long insisted that they cannot allow subscribers to choose only those networks they wish to view, but must choose from packages offered by the operators. The Wall Street Journal cites McAdam as saying that a number of content providers “have come to us and have said, ‘We are willing to do an à la carte approach here.’”

It’s important to note here that content providers are not cable service operators. The content providers — TV and movie studios — would be delighted to have another revenue stream. Cable operators believe a la carte programming would cannibalize their business and lead to their demise.

For mobile carriers like Verizon Wireless, the more data streamed to mobile devices, the larger their revenue streams. Just a couple of hours of video streamed to a high-definition mobile device like the new iPad from Apple Inc. (NASDAQ: AAPL) can eat up an entire $30/month 2-Gbyte data plan.

McAdam also said that mobile carriers are looking at making content providers pay for the streamed data, although that’s probably a non-starter. He thinks it is more likely that data plans will become cheaper and mobile users will be willing to pay the price.

Paul Ausick

Thus far, the Federal Communications Commission (FCC) has received comments from MetroPCS Communications Inc. (NYSE: PCS), DirecTV Inc. (NASDAQ: DTV), Sprint, and T-Mobile USA, the US mobile carrier of Deutsche Telekom AG (OTC: DTEGY).

Besides access to an additional 259 million customers in the US, the proposed acquistion includes cross-selling agreements between the buyer and the sellers. The competitors have been asking the FCC to require fuller disclosure of these agreements because they are an integral part of the deal for the spectrum licenses. All are worried about Verizon’s ability to wield unbeatable market power in virtually every market.

Through these agreements, the cable companies, on the one hand, and Verizon Wireless, on the other, will become agents to sell one another’s products and, over time, the cable companies will have the option of selling Verizon Wireless’ service on a wholesale basis. Additionally, the cable companies and Verizon Wireless have formed an innovation technology joint venture for the development of technology to better integrate wireline and wireless products and services.

The cross-selling agreements are a nice bonus for the cable operators, who now will be able to bundle wireless service with their existing phone, broadband, and cable TV services. The sale has the the added benefit of getting the cable guys out of the low-margin, high-cost wireless business.

For Verizon Wireless, the purchase gives them a larger population to cast their net over and an opportunity to bundle the cable operators’ services into a package of their own. But the added spectrum is what the deal’s all about for Verizon Wireless. The new capacity will be a significant aid to the build-out of the company’s 4G LTE network.

Comcast will realize about $2.3 billion from the sale and Time Warner Cable will get about $1.1 billion. That’s about double their investments in the original spectrum license purchases in 2006.

Paul Ausick

Verizon Wireless, the joint venture between Verizon Communications Inc. (NYSE: VZ) and Vodafone Group plc (NASDAQ: VOD), did not just sit on its hands while AT&T tried to push through the T-Mobile deal. The company paid $3.6 billion for unused spectrum owned by SpectrumCo, a consortium of Comcast Corp. (NASDAQ: CMCSA), Time Warner Cable Inc. (NYSE: TWC), and Bright House Networks.

Other potential AT&T acquisitions include MetroPCS Communications Inc. (NYSE: PCS), Leap Wireless International Inc. (NASDAQ: LEAP), and even Sprint Nextel Corp. (NYSE: S). But none would be as good as a deal for Dish.

AT&T’s main problem is that it would have to pay a premium price for Dish — perhaps as much as $50/share, or about 70% above today’s share price. That would value Dish at around $22 billion, a steep price given that AT&T just paid out $4 billion to T-Mobile in break-up fees. Even Ma Bell can’t afford to pay that kind of money too often for nothing in return, and it’s a sure bet that Dish would want a substantial break-up fee as part of any deal.

A report at Bloomberg News notes that Verizon Wireless owns 56 percent more 4G spectrum than AT&T in the top 10 markets and 46 percent more in the top 100. Verizon Wireless also claims 107.7 million subscribers compared with AT&T’s 100.7 million. Had AT&T been able to acquire T-Mobile, it would have increased its spectrum by 62%, leveling the playing field.

Dish recently acquired wireless spectrum from two bankrupt satellite television companies for about $2.8 billion in a deal that is still awaiting FCC approval. Verizon’s deal with SpectrumCo also needs regulatory approval, and so far there is no indication that either approval is in trouble.

But what does AT&T want with a satellite TV business? Of course it could hive it off once the deal is done, but it might make more sense to go after MetroPCS or Leap, both of which are simply wireless carriers. Or AT&T might be able to get Dish to sell just the spectrum. That would not be the best deal for Dish shareholders, but the company’s management would certainly be able to retire following such a transaction.

Dish shares are trading up more than 2% today at $29.34 in a 52-week range of $20.85-$32.56. Shares of AT&T are up almost 1% at $30.30 in a 52-week range of $27.20-$31.94.

One issue to consider… Dish would have every right in the world to demand another massive deal break-up fee in case the telecom giant could not convince regulators that this is good for consumers.

Paul Ausick