The wireless communication world is about to receive a new entrant, as the country's third-largest cable company will start a cellular network in three areas today. The company? Cox Communications.

Before you think that this wireless network will be available across the U.S., Cox's wireless offerings will be available in Orange County, California; Omaha, Nebraska; and Hampton Roads, Virginia. These three locales are where Cox is the local cable company, and they hold roughly 1.5 million residents.

Telecom/broadband play CenturyLink Inc. (CTL), formerly known as CenturyTel, appears to be well-positioned for a promising 2011 and beyond, and is worth a review.

Louisiana-based CenturyLink is a rural telephone carrier that operates in small/mid-sized cities in 23 states. Its acquisition of Embarq increased its telephone access lines to about 6.9 million.

CenturyLink also has 2.3 million broadband subscribers and is involved in a partnership to provide wholesale satellite service to about 600,000 customers.

CTL's 2010 revenue breakdown: 44% voice, 26% network access, 24% data, 10% fiber transport/other.

Slow growth/dividend play Verizon Communications (VZ), first discussed here on February 12, 2009, at a price of $29.86, is registering more growth than expected, and I obviously still like the shares here.

Moreover, Verizon's chart appears to be forming a cup-with-a-handle -- a bullish formation.

Verizon will likely post 2% to 2.5% revenue gain in 2011, after flattish revenue in 2010, with data services being the key revenue increase driver. Cell phone subscriber additions should lead the sector, but competition may hurt overall subscription prices. Further, if unlimited service for a flat fee becomes the sector norm, that would further dent wireless revenue. As of June 2010, Verizon had 93 million wireless subscribers, with another 8 million devices connected to its network. A rock-solid $1.95 annual dividend – good for a 6% yield at the current stock price of about $32.50 -- adds to the positive mix.

Wednesday morning, Standard & Poor's announced that it may cut AT&T's (T) credit rating because the company could have trouble reducing its debt load within a "reasonable timeframe."

The ratings house placed the communications firm on CreditWatch negative with implications, which includes the company's "A" rating and its "A-1" short-term and commercial paper ratings. S&P stated, that it expects "a potential downgrade of the corporate credit rating, if any, would be limited to one notch." This news has had very little impact on the stock, as shares of the titan of telecom were trading near break-even by late morning.

This was one of those days that left many confused, even if the real red or black status of the day was not clear until toward the end of the day. Construction spending rose in the U.S. and the poor Chicago purchasing managers data from last week did not translate to a drop in manufacturing via this morning's ISM manufacturing data. A recovery in European shares also helped the fold here.

Here were today's unofficial closing bell levels:

Dow 10,024.02 -112.61 (-1.11%)
S&P 500 1,070.71 -18.70 (-1.72%)
Nasdaq 2,222.33 -34.71 (-1.54%)

Top Analyst Calls

Goldman Sachs (GS) was quite the busy brokerage this morning, as it trekked through the financial sector and also issued a number of other upgrades, including one for Sprint Nextel (S).

The brokerage upped Sprint to buy from neutral, issuing a $6 price target, a nice elevation from the previous target of $3.50. Goldman noted that the reason for the upgrade is churn, and that the company is "about to move the needle." Goldman stated, "Sprint's gross add/upgrade activity slowed sharply in 2008, which ironically should benefit the company over the course of 2010 as the logical pool of churn subscribers is reduced." The upgrade comes basically from a glorified hunch.

Sprint Nextel (S) reported Wednesday that its first-quarter net loss increased due to 1.5% lower revenue. The telecom giant's loss checked in at 29 cents per share, 8 cents wider than last year's same-quarter loss. Removing charges stemming from an increased valuation allowance for deferred tax assets from the equation, Sprint lost 17 cents per share. The post-charge loss matched the consensus estimate.

Sprint's revenue totaled $8.09 billion, better than the expected revenue of $8.05 billion. Sprint added that it lost 75,000 net subscribers during the quarter. But when the company compared the results to a year ago, the telecom firm's improvement in post-paid gross subscriber additions and prepaid gross subscriber additions were the highest in five years.

Verizon Wireless (VZ) on Wednesday asked the Federal Communications Commission to not "assert its authority over Internet services." VZ believes that the FCC's power is ineffective and gave Congress some recommendations that could shift the balance of power away from the FCC. VZ's top lobbyist, Tom Tauke, asked Congress to reconsider the way the FCC oversees broadband Internet. VZ would like the FCC to become more of an enforcer, much like the Federal Trade Commission.

The FCC is trying to reclassify broadband Internet access as a "common carrier service." Such classification would allow the government agency to regulate Internet service providers the same way it regulates phone companies. According to The Washington Post, the FCC's chairman said that the agency will continue to argue its point but may consider reclassification if a federal appeals court finds that the FCC doesn't have jurisdiction over broadband.

Here's another one of those stocks that I didn't buy and then found myself sadly watching from the sidelines as it rose higher. A year ago, I proffered a bearish reading on the prospects for telecom entity Qwest Communications (Q). Well, shares of Qwest have done well over the last twelve months. Should I now allocate some investment capital to this idea?

One might argue yes. After all, the company is up at the time of this writing on the Q4 numbers. However, I just don't feel compelled to buy. Especially not after all the declines I see in the release.

Another quarter has come and gone for telecommunications expert Verizon (VZ). And with it, another opportunity for management to flaunt its cash-generation abilities. Earnings may be down, but I've said it before and I'll say it again here: When Wall Street thinks Verizon, it thinks attractive dividend yield.

On an adjusted basis, the company made 54 cents per share in the fourth quarter. This was seven cents less than last year's income figure. Unfortunately, it was also a penny below expectations, according to our earnings preview.

Before the market opens tomorrow, telecommunications network specialist Ciena Corp. (CIEN) is due to report its fiscal fourth quarter results, and the stock is trading up nicely ahead of tomorrow's report.

Going into tomorrow's earnings report, analysts are expecting the company to show a lost of 7 cents per share. During the same period last year, the company posted a loss of 10 cents per share.

BT Group, which virtually owns the UK telecommunications market, isn't waiting for Google (GOOG) to launch a full attack. The company probably expects to be under assault from the search engine (and advertising and e-mail) giant, so it's taking early action. Google Voice is still being tested, but words like "free" and "powerful" and "internet-based" are bound to inspire fear in even the most established of companies.

To protect itself from the eventual attack from Mountain View, BT picked up Ribbit Mobile, and testing is in progress. Ribbit's technology has some overlap with Google Voice and even beats it with a few capabilities, according to Bloomberg. Ribbit just launched its beta product this month. It allows either the user's current phone number or a new one from Ribbit -- which is no different from Google's alternative. The product suite is generally the same, with phone- and web-based voicemail retrieval and automatic transcriptions that can be sent by text message or e-mail. For an extra fee, BT's Ribbit does provide human transcription, though it is free during testing. And, calls can be taken directly from a computer, using a microphone and speakers.

"Our favorite and steadiest U.S. telecom recommendation is Verizon Communications (NYSE: VZ)," says Martin Weiss.

He explains, "We've always liked their steady-Eddie business and their tradition of paying handsome, predictable dividends." Here's the latest from the "conservative portfolio" section of his The Safe Money Report.

"I remain optimistic that now is a good time to be purchasing high-yielding assets," says growth and income expert Bryan Perry.

Indeed in his industry-leading The Cash Machine, the advisor adds two growth and income picks to his buy list: AT&T (NYSE: T) and Verizon (NYSE: VZ). Here's his assessment.

"Even if you are forecasting a recovery in mid to late 2010, you should be aggressively buying strategic high-income assets over the next three to six months.

Christine A. Varney heads up antitrust at the Department of Justice, and she's going hunting. She is the point person for a group consisting of the presidential administration and some Congressional Democrats that is looking to put the breaks on large companies in several industries.

Already, airlines have run into roadblocks when requesting relief from antitrust regulations. Varney & Co. are digging into complaints by AT&T (NYSE: ATT) and Verizon (NYSE: VZ) that cable competitors – e.g., Cablevision (NYSE: CVC) – have locked them out of the market for cable company-produced programming.

(Imagine that, a phone company complaining! Usually, they're the objects of derision.)