In the early years of the Internet, the more time people spent online, the more they paid a provider like AOL for their connection. But as customers have shifted to always-on broadband services, many Web surfers have enjoyed all-you-can-eat Internet for a flat rate.

Some cable and telecommunications providers are trying to turn back the clock and return to usage-based pricing for Internet connections. Carriers including AT&T Inc. (T) and Time Warner Cable Inc. (TWC) say they may have to switch amid a surge in Internet traffic as more people go online to watch videos and download movies.

Recent efforts to introduce usage-based, or metered, broadband services have met stiff resistance from consumers. But a new push by the federal government to adopt rules that would force Internet providers to treat all Web traffic equally, no matter how much bandwidth they take up, could give ammunition to the broadband providers that want to change how they charge for Web access, Internet experts and consumer advocates say.

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Collins Stewart analyst Thomas Eagan thinks you may be swapping your Comcast (CMCSA) shares for Time Warner Cable (TWC) sometime soon.

In a note to clients this morning, Eagan writes that investors may rotate out of Comcast if the company decides to invest $12 billion to $14 billion for a stake in GE’s (GE) NBC-Universal, as rumored. The latest buzz on that deal is that it has a 50/50 chance of happening, according to a piece in the Wall Street Journal this morning.

If Comcast were to take a 51 percent stake in NBC-U, Comcast’s revenue from content would jump from 4.5% of the firm’s total sales to 30 percent, writes Eagan.

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In a bold and controversial call, Citigroup (C) analyst Jason Bazinet this morning proposed a cable industry mega-deal: he thinks Comcast should buy Time Warner Cable (TWC). Until last week, that combination would have been impossible; but an FCC rule limiting cable companies to 30 percent U.S. market share has been struck down by a federal court.

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Will Comcast (CMSCA) use its rising cash pile to make a large acquisition in the content business?

Reuters raised that question in a lengthy news analysis yesterday which wondered if the company is plotting a giant deal along the lines of its failed $54 billion bid for Disney (DIS) in 2004. The story says speculation on the Street has the company potentially targeting Viacom (VIA), or even Time Warner (TWX). (A combination with Time Warner–which would give the company control of key cable properties like HBO and CNN – would be truly weird, given that Time Warner only months ago spun off Time Warner Cable as an independent company.)

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When a guy like Steve B. Burke likens TV viewers’ stampede online to a “wildfire,” you know the cable industry is feeling the pressure. Burke is the president and chief operating officer of Comcast, America’s largest cable distributor. He notes that Hulu.com and other popular Web sites that offer access to TV shows and films attract a fraction of the viewers that cable does. But Burke acknowledges that he and his rivals can’t afford to sit still–not when Americans can get many favorite shows online for free.

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Time Warner’s (TWX) hiring of Tim Armstrong to run AOL is, to misquote another Armstrong, a small step for AOL but a giant leap for Time Warner.

Whether or not the former Google (GOOG) executive can turn around the AOL business, his hiring clearly sets up AOL to be spun off. That is a step Time Warner must take, having wasted years trying to fix or find a buyer for AOL.

Time Warner CEO Jeff Bewkes shouldn’t dawdle in making the formal decision to spin off AOL.

Now that the Time Warner Cable spinoff is almost done, he has achieved tangible progress toward streamlining Time Warner into a more-defined entertainment business. A quick AOL spinoff would free up Mr. Bewkes to deal with the Time Inc. magazine business.

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Clearwire shares are down sharply following negative comments on the company this morning from analysts at J.P. Morgan and Stanford Group.

The company’s shares gained ground yesterday following the completion of its deal to acquire Sprint’s (S) Xohm wireless broadband business; it also closed a $3.2 billion investment from Google (GOOG), Comcast (CMCSA), Time Warner Cable (TWX), Intel (INTC) and others. But there are concerns that the company still faces daunting challenges, including a highly competitive market and a need for substantially more capital.

J.P. Morgan’s Mike McCormack resumed coverage with a Neutral rating, from Overweight previously. That’s an eye-opening change, given that Morgan was one of Clearwire’s advisers on the Sprint deal. He has a $6 price target on the stock.

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New York Attorney General Andrew Cuomo announced on Tuesday that Verizon Communications, Time Warner Cable and Sprint would “shut down major sources of online child pornography.” What Cuomo didn’t say is that his agreement with broadband providers means that they will broadly curb customers’ access to Usenet–the venerable pre-Web home of some 100,000 discussion groups, only a handful of which contain illegal material.

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In an effort to slow Google’s siphoning of advertising dollars away from television, the nation’s six largest cable companies are making plans for a jointly owned company that would allow national advertisers to buy customized ads and interactive ads across the companies’ systems. For the last six months, executives from Comcast, Time Warner Cable, Cablevision, Cox Communications, Charter Communications and Bright House Networks have been meeting monthly, alternating between New York and Philadelphia. Quarterbacking the initiative–code-named Project Canoe to emphasize that the companies must all work together–has been Stephen Burke, president of Comcast, and Landel C. Hobbs, the chief operating officer of Time Warner Cable.

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Last week, we learned from a leaked memo that Time Warner Cable is preparing to roll out usage-based broadband service tiers to new customers in Beaumont, Texas. The company has since confirmed its plans, with monthly bandwidth caps set at 5GB, 10GB, 20GB and 40GB. Customers who exceed their cap would be hit with an undetermined per-gigabyte charge, but Bell Canada’s overage fees, which range from CAN$1.00 to CAN$7.50 per gigabyte, may give some inkling of where Time Warner’s overage fees will end up. Usage caps are a short-sighted response to capacity constraints, one that’s likely to hurt the company more than it will help in the long run–especially with new broadband options on the horizon.

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