Verizon Wirless Thursday agreed to pay $21 million to settle a lawsuit filed by California customers upset with the company's early termination fees, the Associated Press reported.

Details are still pending, but Alan Plutzik, Alameda County (California) Superior Court judge said "we are recovering cash" that would "be available" to Verizon mobile phone subscribers who paid fees to end their contracts early, AP reported.

Shares of Verizon Wireless' parent Verizon (NYSE: VZ) were virtually unchanged on the news, dipping just 8 cents $34.58 in mid-day Thursday trading.

Warranted reimbursement or California dreamin'?

Stock analyst C. Leonard Bauer told BloggingStocks Thursday that, while he abhors cell phone / PDA termination fees as many others do, thinking that mobile phone / phone service providers can eliminate the $100-$250 fee without increasing charges elsewhere does not represent clear thinking.

Sometimes a major CEO seems like a foolish child more than a competitive leader. And sometimes the head of Verizon Communications, Inc. (NYSE: VZ), Ivan Seidenberg, has said things that make many of us scratch our collective heads. With Apple, Inc.'s (NASDAQ: AAPL) 3G iPhone about to hit the street (but not the Verizon network), Seidenberg must have been driven by jealousy to say something silly.

In response to the impending release of the 3G iPhone, Seidenberg said: "There goes the conspiracy again. You're declaring them a winner before they've earned it on the field." This in response to a reporter's question about the new iPhone achieving mass market appeal due to the lower entry price of $199. The iPhone does not have a huge market share when all sold phones are considered, but the new $199 price tag could sure put the Cupertino company in a position to ramp up that share pretty fast. This apparently concerns Seidenberg.

Sometimes waiting out the competition is a strategy that doesn't involve much R&D. Seidenberg went on to say, "Steve Jobs eventually will get old . . . I like our chances." Instead of trying to find some innovation to provide to the Verizon customer, maybe Verizon (along with all the other wireless carriers) will just try to wait out Apple's wireless offerings until Steve Jobs retires. Doesn't sound like a recipe for success to me. But then again, Seidenberg has said some pretty clueless things before. Maybe this is just another example of a corporate leader who's out of touch with his industry.

TheStreet.com's Jim Cramer says this is a crucial moment for the dividend-payers, which should be getting support here.

You can't even find protection in yields these days. It just went away. Perhaps we will get it if Sen. Obama gets elected. Perhaps with higher rates. Perhaps with the downfall of the high-yielding American financials. (Nice discussion of the lack of dividend safety courtesy of the man who knows more about dividends than anyone, Dave Peltier, in the Columnist Conversation last week.)

For ages, it seemed you could get to a magic number, typically 4% yield, where stocks would bounce, or at least be given a parachute that opened for a gentle landing.

Last week that parachute failed. You have stocks like Con Ed (NYSE: ED) (Cramer's Take) just getting trashed here, pushing the yield to 6%. You have stocks like Weyerhauser (NYSE: WY) (Cramer's Take), Carnival Cruise (NYSE: CCL) (Cramer's Take), Gannett (NYSE: GCI) (Cramer's Take), just slicing through the protection. The former's got cyclicality, the middle's got consumer and fuel worries, and the latter is in secular. But they all have no trouble paying the dividend.

Or consider Verizon (NYSE: VZ) (Cramer's Take) and AT&T (NYSE: T) (Cramer's Take). The first is at a 5% yield, the other is almost there. No one questions their ability to support that dividend.

Rhapsody, a music download service owned by Real Networks (NASDAQ: RNWK) and Viacom (NYSE: VIA), will make yet another run at Apple Inc.'s (NASDAQ: AAPL) iTunes. According to Reuters, "Digital music seller Rhapsody is launching a $50 million marketing assault on Apple's iTunes, offering songs online and via partners including Yahoo Inc. (NASDAQ: YHOO) and Verizon Wireless."

Why the venture thinks it will have real success is anyone's guess. Downloading to Verizon Wireless phones is not exactly the kind of novelty that is likely to draw customers. The service will have one important new feature, though. Rhapsody subscribers have not been able to play their music on iTunes. Under the new push, that will change.

Memo to Rhapsody: The horse has already left the barn. Keeping the service off of the iPod for so long has helped iTunes move into a unassailable position.

Real Networks, which dominated the multimedia market with its Real Player from the late 1990s until about five years ago, was slaughtered by Apple when it offered a device coupled to a music store with the launch of the iPod.

There is no catching up now. The race is over.

Douglas A. McIntyre is an editor at 247wallst.com.

I've seen it many times: a cool product that finds few customers. That seems to be the case with Helio's mobile phones. Basically, customers didn't want to pay premium prices for such things as access to MySpace and other new-fangled features.

It's a tough lesson (and expensive). SK Telecom and EarthLink (NASDAQ: ELNK) formed Helio as a joint venture in 2005 with start-up capital of $440 million. SK Telecom invested an additional $270 million in the venture last year.

Yet, in the end, Helio turned out to be a big dud. That is, the company sold out for a measly $39 million to Virgin Mobile USA (NYSE: VM). In fact, the space is full of dead companies, such as Disney Mobile and Amp'd Mobile.

I had a chance to interview Frank Dickson, the co-founder and chief research officer of MultiMedia Intelligence. According to him:

Honestly, the merger is a desperate move. Overall, the MVNO (Mobile Virtual Network Operator) model makes sense in a limited number of situations. For example, if a cable MSO wants to leverage its customer base and offer triple or quadruple play offering, there is a clear distinctive competency and the MVNO route makes sense.

Verizon (NYSE: VZ) is making a fairly concerted effort to get Vodafone (NYSE: VOD) out of its equity position in Verizon Wireless. The question is, why would Vodafone get out? Verizon Wireless makes a lot of money.

According to the FT, the head of Verizon, Ivan Seidenberg said, "Would I like to have 100 per cent of the earnings given we're doing 100 per cent of the work? Yeah, I would."

Verizon Wireless does not pay dividends to Vodafone, so it does not get much of a cash benefit from its piece of the pie, but the FT points out that the British company's stake is worth about $60 billion.

Reflecting on the debate, it would probably be in the best interests of Vodafone shareholders to sell out to Verizon. Their benefits of ownership are limited. Vodafone could use the cash for expansion in Europe, Asia, and the Middle East.

Perhaps the greatest reason for Vodafone to make a graceful exit is the US market itself. Growth of wireless subscribers is slowing as the market reaches a point of saturation. Competition is tough, especially with AT&T (NYSE: T) having about the same number of subscribers as Verizon Wireless. A price war could take down margins at both companies.

Vodafone's stake may never be worth more than it is now.

Douglas A. McIntyre is an editor at 247wallst.com.

MOST NOTEWORTHY: The Aerospace sector, Boeing, Aurora Oil & Gas and Syniverse were today's noteworthy downgrades:

• Goldman downgraded the Aerospace sector to Cautious from Neutral to reflect high oil prices and the weak economy. The firm also downgraded Boeing (NYSE: BA) shares to Sell from Neutral and added the stock to their Conviction Sell List as they expect the economic weakness and high fuel prices to drive slowing orders.
  
• Jefferies downgraded shares of Aurora Oil & Gas (AMEX: AOG) to Underperform from Hold to reflect the company's falling production, minimal cash flow through the remainder of 2008, and limited access to capital.
  
• Baird cut Syniverse (NYSE: SVR) to Neutral from Outperform as they believe the impact from the Verizon (NYSE: VZ)-Alltel merger could be greater than investors think.

OTHER DOWNGRADES:

• Arch Chemicals (NYSE: ARJ) was lowered at Oppenheimer to Perform from Outperform.
  
• New York Community Bancorp (NYSE: NYB) was downgraded to Hold from Buy at Citigroup.
  
• Sonic (NASDAQ: SONC) was downgraded to Equal Weight from Overweight at Stephens.

During the challenging market conditions over the past year, the telecom sector has felt its fair share of the pain. BusinessWeek brings Standard & Poor's Todd Rosenbluth who suggests that some of these telecommunication stocks could now be good investments for traders as they have a safe dividend.

Despite worries tied to the slowing U.S. economy and increased competition, "we think that some of the concerns are overdone and believe selective stocks are attractively valued," Rosenbluth stated. Rosenbluth also noted that telecom stocks have started showing signs of recovery for the past few weeks, helped by the launch of new handsets and merger and acquisition agreements.

Some of investors' favorite companies are AT&T Co. (NYSE: T) and Citizens Communications Co. (NYSE: CZN). Rosenbluth believes that the launch of Apple (NASDAQ: AAPL)'s new iPhone, 3G iPhone, will stir increased demand for smartphones, helping such companies, while putting pricing pressure on some of their competitors.

MOST NOTEWORTHY: Verizon, AT&T, Invitrogen and General Electric were today's noteworthy downgrades:

• UBS downgraded Verizon (NYSE: VZ) and AT&T (NYSE: T) to Neutral from Buy citing the weak economy and increased wireless competition.
  
• Banc of America downgraded shares of Invitrogen (NASDAQ: IVGN) to Neutral from Buy as the company's acquisition of Applied Biosystems (NYSE: ABI) alters their investment thesis. The company's target was cut to $38 from $50.
  
• JP Morgan downgraded General Electric (NYSE: GE) to Neutral from Overweight citing further risk to earnings and dislocation from necessary portfolio management in 2009.

OTHER DOWNGRADES:

• Office Max (NYSE: OMX) was cut to Neutral from Outperform at Credit Suisse.
  
• Goldman lowered Ryanair (NASDAQ: RYAAY) to Sell from Buy.
  
• WebMD Health (NASDAQ: WBMD) was downgraded to Sell from Source of Funds at ThinkPanmure.

UBS downgraded Verizon (NYSE:VZ) from "buy" to "neutral" and took the same action with AT&T (NSYE:T) according to Briefing.com. The news service also reports that JMP upgraded Sandisk (NASDAQ:SNDK) to "market perform" from "underperform".

General Electric (NYSE: GE) was cut to Neutral from Outperform at JPMorgan, according to 24/7 Wall St. The financial website also reports that Wendy's (NYSE: WEN) waised to Equal Weight from Underweight at Morgan Stanley.

Douglas A. McIntyre

Verizon (NYSE: VZ) had decided that customers do not have to be landline clients to get the company's new fiber broadband and TV service. In other words, it is willing to walk away from its core business to move into the future.

According to the AP, "Surveys point to about one in seven U.S. households now lacking landlines." More people are using their cellphones instead of the traditional home phone connection.

The announcement points to the lengths to which Verizon will go to get customers away from cable companies like Comcast (NASDAQ: CMCSA). Cable does not require that people use its voice system, VoIP, to get cable television or broadband connections. If Verizon wants to match cable packages, it has to do the same.

To a large extent, the news is an indication that Verizon is not really a traditional "phone company" any more. The revenue from that part of its operations is shrinking. Its growth comes from cellular customers, home fiber subscribers, and DSL.

Alexander Graham Bell is turning in his grave.

Douglas A. McIntyre is an editor at 247wallst.com.

Last year, the Chinese government invested a cool $3 billion into The Blackstone Group LLP (NYSE: BX). It was before the IPO and seemed to be a good bet.

Of course, it wasn't. The shares of Blackstone have plunged since.

Despite this, China is still hungry for private equity. In fact, according to a report in the Financial Times, the State Administration of Foreign Exchange of China has agreed to invest $2.5 billion in TPG's latest fund (which may reach as much as $20 billion).

Simply put, China is overflowing with cash, so why not seek out higher returns?

True, private equity is ailing right now, but then again, the investment horizon is for the long-term. And with lower valuations, private equity firms are positioned nicely to pick up some attractive buyouts.

Something else: TPG has a strong track record. And, by all accounts, the firm is continuing its winning ways, such as with its latest score in selling Alltel to Verizon Wireless, a joint venture of Verizon (NYSE: VZ) and Vodafone (NYSE: VOD).

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.

Now that Verizon Wireless has agreed to purchase privately held Alltel from its private equity owners (giving them a small profit and an out), what else is on tap for the soon-to-be largest wireless carrier in the U.S.? Verizon Wireless is chomping at the bit to overtake AT&T Inc. (NYSE: T) as the largest wireless carrier in the U.S., and its acquisition of Alltel will give it an 8 million+ wireless subscriber advantage over Ma Bell.

Although Alltel's buyout by Verizon was expected last year, it's now going to finally happen. Both companies use the same technical wireless standard, so this will be an easy merger. There will be no issues like when Sprint merged with Nextel in 2005 and the two incompatible networks caused an epic failure of those two companies to merge into one. Speaking of Sprint Nextel Corp. (NYSE: S), where does it play into the Verizon-Alltel landscape? Does its WiMAX plans now become derailed with the Verizon announcement, adding more insult to injury about the state of the company?

If anything, look for Verizon to take a strong look at buying Sprint Nextel shortly after its deal with Alltel closes. There would be way more regulatory scrutiny than the Alltel deal (overlapping markets, etc.), but a one-two knockout punch like this would make Verizon Wireless the pre-eminent wireless carrier in the U.S. for a long time. AT&T would have no choice but to plead with Deutsche Telekom to buy T-Mobile USA, the nation's fourth-largest wireless carrier, and one who also shares the same type of technical network as AT&T. Perhaps 2009 will see some of the neatest consolidation in the wireless world yet.

MAJOR PAPERS:

• The LiveTV unit of JetBlue Airways Corporation (NASDAQ: JBLU) is buying Verizon Communications Inc's (NYSE: VZ) Airfone network, the Wall Street Journal reported.
• As Lehman Brothers Holdings Inc (NYSE: LEH) is about to report a second quarter loss of about $2B, the firm is closing in on raising over $5B in new capital, the Wall Street Journal reported. Once source of Lehman's new funding is reportedly the New Jersey Division of Investment.
• The Financial Times reported that General Electric Company's (NYSE: GE) NBC Universal and British private equity firm GMT Communications Partners are expected to soon acquire Bigpoint, a German-based computer games website.

OTHER PAPERS:

• According to the Independent, the credit crunch has cost the jobs of about 100 bankers at Barclays Plc (NYSE: BCS). The bank cut about 20 individuals on the leveraged finance team and will reportedly cut 80 more in investment banking and IT support.

MAJOR PAPERS:

• Verizon Wireless, a joint venture of Vodafone Group Plc (NYSE: VOD) and Verizon Communications Inc (NYSE: VZ), is in talks to acquire Alltel Corp. in a deal valued at about $27B, the Wall Street Journal reported. If successful, the combined companies would create the largest cellphone company, and would be better positioned to compete against AT&T Inc (NYSE: T).
• Gregory B. Penner, the son-in-law of Wal-Mart Stores Inc (NYSE: WMT) chairman S. Robson Walton, is expected to join the company's board of directors, a move seen as the beginning of a leadership change at the company, according to the Wall Street Journal.
• The Financial Times reported that Singaporean sovereign wealth fund Temasek refused to provide funds to Bear Stearns shortly before Bear's sale to JPMorgan Chase & Co (NYSE: JPM). Temasek reportedly refused the request for practical and political reasons.
• Russia's Interior Ministry questioned the head of BP Plc's (NYSE: BP) Russian oil venture as part of a criminal investigation into possible large-scale tax evasion, the Financial Times reported.