Wireless

In its attempt to redress the imbalance created by the latest Verizon ads, AT&T has hurriedly cobbled together not just one Luke Wilson ad, but several.

Curiously, one ad features precisely the same strategy as that of the latest iPhone advertising: reminding those who might still be on the fence, on the phone, or even on the lam that you can't simultaneously enjoy voice and Web surfing on the Verizon 3G network--and hence on the Motorola Droid.

So here we have Luke Wilson, still looking a little peaky and dressed in a difficult brown. Behind Luke, we have a man trying to use two phones (by implication, Verizon phones) to perform a task the iPhone will manage alone.

Some might find it entertaining that as his friend attempts to download something on one of his Verizon phones, he complains that it's all going rather slowly. Others might find this both true and funny.

AT&T hasn't merely paid Wilson a little more than 3G to make this comparison. Someone, somewhere, has, perhaps even wisely, said, "We need a map to counter Verizon's map."

So the writers hit upon the idea of a two-part extravaganza (this already aired during Tuesday's "Dancing with the Stars" finale), in which Wilson produces postcards from all the different American towns that really do--no, really--have AT&T 3G coverage.

Wilson says his job is to set the record straight, with respect to Verizon's vicious besmirching of the AT&T network. He tries his best. He tells us that AT&T covers 97 percent of all Americans--yes, 300 million people.

The AT&T map also seems far more filled-in and far more colorful than it appears in Verizon spots, though one suspects that local word of mouth might be rather stronger, in this instance, than national advertising. If you live in Spokane, Wash., for example, and you know someone there who has spotty 3G service on a particular network, that is far more powerful an influencer than any number of Wilson's postcards or Verizon's barbs.

It's enlightening, however, to discover that Wilson once dated someone in Tulsa, Okla., and it didn't work out. Did she catch him simultaneously calling and Web surfing? Perhaps we will never know.

It seems that Apple doesn't respect Verizon's Droid phone quite as much as it does Microsoft's PCs. But two new ad spots, launching Monday evening, come as close as Apple has done thus far to directly attack the allegedly do-it-all robotphone.

The Droid, you see, went after Apple in its teaser campaign with some telling remarks and the hearty claim that Droid does what the iPhone doesn't. Then Verizon decided it would be fun to knock both the iPhone and AT&T's spotty 3G coverage with its "Misfit Toys" concept.

AT&T has already replied by hustling a hastily-dressed Luke Wilson into directing a few resentful pins at Verizon's effigy. However these new ads, while entirely in keeping with the iPhone tone and style, end with a line that expressly assaults the doings of Droid--or rather, its alleged non-doings.

Both ads focus on the iPhone's ability to allow you to use voice and data capabilities simultaneously over the AT&T network. By asking gently at the end of each spot "Can your phone and your network do that?" Apple is bursting what it sees as the inflated stealth bombing that accompanied the launch of the Droid.

Apple iPhone Ad - Did You See My Email? from Arik Hesseldahl on Vimeo.

Apple iPhone Ad - What Time's The Movie? from Arik Hesseldahl on Vimeo.

These ads don't mention the Droid or Verizon by name. But the fact that Apple has decided to address its rivals, however obliquely, suggests that one can look forward to more accusations, more bickering, and more attempted one-upmanship.

'Tis the season of goodwill, after all.

AT&T launched a prepaid wireless broadband service on Monday, following the lead of competitor Verizon Wireless.

Pricing for the new AT&T DataConnect Pass plans are the same as what Verizon Wireless is charging. Customers can pay $15 for a daily pass with a data usage cap of 75 megabytes. A weekly plan costs $30 and allows for 250MB of data usage. And the monthly plan is $50 and offers 500MB of usage.

While AT&T and Verizon Wireless have offered prepaid cell phone service for years, up until now the companies have required customers sign a contract for their wireless broadband services. Wireless broadband services allow users to connect their laptops to the Internet via the carriers 3G wireless network. These services have mostly been targeted at business users.

As these big phone companies move mobile broadband services into the mainstream, they are expanding their payment options to attract more consumers. But for many consumers in this tough economic environment, taking on a new contract and monthly service fee is simply too much. As such, the prepaid model is now moving to these services as well.

Prepaid niche players, such as Leap Wireless and Virgin Mobile, have recognized the demand for prepaid wireless broadband services, and they are already selling services to address the market. Leap Wireless offers an unlimited usage plan for $40 a month. And Virgin Mobile, which is now owned by Sprint, offers a $60 plan that has a usage cap of 1 gigabyte for a month.

Will these new prepaid offerings be enough to entice consumers to sign up for 3G wireless broadband service? That's a question yet to be answered. But AT&T, especially, should be careful what it wishes for. The company's 3G wireless network is already overburdened with iPhone users' heavy wireless data usage.

If you are considering buying a new BlackBerry, Android phone, or Netbook from Verizon Wireless, you better make sure you won't want to break your contract early, as the penalty for ditching your service before the end of the contract has just gotten a lot steeper.

But what does Verizon's move to increase early-termination fees mean for the rest of the wireless industry? That's a good question.

Verizon Wireless recently doubled its early-termination fee for what it calls 'advanced devices.'

(Credit: Verizon Wireless )

Early-termination fees are not new to the wireless industry. For as long as wireless operators have been selling and subsidizing cell phones, they've required customers to sign contracts. And they've penalized them for canceling their contracts early.

The phone companies say they must charge a fee to recover the cost if a customer quits his or her service early. These fees have angered many customers. Several class action lawsuits have been filed against cell phone carriers and some customers have won. Congress and the Federal Communications Commission have challenged the industry on this practice.

While it's very unlikely these fees will ever go away, as of mid-2008, all four of the major wireless carriers in the U.S. have been prorating their early-termination fees, so that customers near their end of their contracts don't pay the same fee as those just starting their contracts.

But now Verizon Wireless has shocked consumers and the industry by doubling its early-termination fee. Verizon representatives say it only makes sense that Verizon would raise this fee since it is subsidizing far more of the cost of sophisticated devices, such as smartphones.

In an effort to help consumers better understand these changes and to understand how other national wireless operators stack up, CNET has put together this FAQ.

How much is Verizon's new early-termination fee?
The new fee has been increased to $350 from $175.

Does this fee apply to all Verizon phones?
No, it only applies to contracts associated with the purchase of what Verizon calls an advanced device, such as a smartphone or Netbook at a reduced price. This change only applies to new contracts that started on or after November 15. For customers who signed a contract before November 15, the old $175 early-termination fee applies when they choose to end their contract early. This means that new Droid customers who bought their phones the first weekend it launched will not be required to pay the $350 ETF if they terminate service early.

Verizon and the three other major phone companies have been prorating their early-termination fees. Will this fee be prorated?
Yes, Verizon will continue to prorate the early-termination fee over the life of the contract. The rate will decrease by $10 each month of the contract. Verizon's previous prorate rate was $5 per month.

What about for non-smartphones or feature phones that run on Verizon's network? What is the early-termination fee for those devices?
The fee for non-smartphones will remain the same, $175. And the rate will decline by $5 a month during the contract.

Why is Verizon changing its policy now? It seems like it is just being stingy.
The company says that the $175 early-termination fee was set long before people were walking around with expensive, sophisticated, mini-computers in their pockets. The new early-termination fee more fairly reflects higher costs associated with advanced devices due to their more complex chip sets, microprocessors, and licensed software that perform more functions than other phones, the company claims.

Is there any way to avoid an early-termination fee or contract?
Yes. First, early-termination fees only apply if you cancel your service before the contract ends. But you also don't need to sign a contract if you'd rather not. But without a contract, customers will pay full retail price for the devices.

Verizon says it offers the option to purchase all its phones with either a two-year contract, one-year contract, or month to month, which requires people to pay full retail price for the phone. For example, the new BlackBerry Storm 2 is $179 with a two-year contract. But the phone would cost $539 without a contract. The new Motorola Droid is $199 after a rebate with a two-year contract. And it is $559 without a contract at the full retail price.

Verizon also offers prepaid wireless phones and service, which allow customers to buy their phones and add minutes of use in advance.

What about other national wireless operators? Have any of them announced they are following Verizon's lead?
So far neither AT&T, nor Sprint Nextel, nor T-Mobile USA have said they plan to raise the early-termination fees on their smartphone devices. An AT&T spokesman said he couldn't speculate on what the company might do in the future, but for now, the company is sticking with its current fee.

T-Mobile USA's spokesman didn't elaborate, but simply said the company has no plans to raise its rate right now.

Sprint Nextel also said it wouldn't raise its early-termination fees, and it criticized Verizon for doing it.

"We have no intention of matching Verizon's new ETF," said Sprint spokesman John Taylor. "We think the decision to double the early-termination fee just on smartphones doesn't make much sense. Why is Verizon trying to disincentive people from buying smartphones? We want people buying smartphones and using more data."

How much do these other national wireless operators charge for their early-termination fees?
Sprint 's early-termination fee is $200. The company reduces that fee beginning in the fifth month of the contract. Then the fee goes down $10 a month until it reaches $50.

AT&T's early-termination fee is $175 and it decreases by $5 for each month of your contract.

T-Mobile USA's early-termination fee schedule is a little more complicated. As of June 28, customers with a one-year or two-year contract with T-Mobile will see their early-termination fee drop from $200 to $100 if they end their contract with 91 to 180 days remaining on their agreement. If they end a contract with fewer than 91 days left on it, they will pay a termination of fee of $50. For customers who terminate their service in the last 30 days of their contract they will either pay the $50 fee or their standard monthly charge, depending on which one is cheaper.

Do these other carriers offer no-contract options?
Sprint allows some of its phones to be purchased for full retail price without a contract. However, the Palm Pre, which went on sale in June, requires a two-year data plan.

Sprint's prepaid brands Boost Mobile and Virgin Mobile USA also offer customers prepaid options that don't require a contract. And phones are purchased at full retail prices.

AT&T allows some phones to be purchased at full price without a contract, but phones such as the Apple iPhone must be purchased with a two-year contract and a $30 a month data plan. AT&T also offers prepaid phones.

T-Mobile USA also offers customers who don't want a contract different options, including T-Mobile Prepaid phones and plans, FlexPay, and month-to-month services including its new Even More plans.

Its Even More Plus plan allows customers to purchase any phone in T-Mobile's device lineup and sign up for a month-to-month rate plan without signing a contract. Customers pay full retail price for the phones, but have the option to purchase their phones using an Equipment Installment Plan over time until the phone is paid off.

For example, a customer purchasing the Google Android myTouch smartphone would pay $150 for the phone with a two-year contract. But with the Even More Plus plan, the customer would pay $400 for the phone with no contract. If the customer wanted to use the Equipment Installment Plan, he or she would pay $20 a month for the phone over 20 months.

It's a simple principle of economics: competition and more customer choice results in lower prices.

And so it is true of broadband services. With about 65 percent of the U.S. population now subscribing to broadband, cable operators and telephone companies are duking it out for new customers. The companies are offering cut-throat prices and new promotions to win over new subscribers.

For consumers in areas of the country where competition is heating up, the savings can be huge. For example, Verizon Communications, which has been losing DSL customers to competitors, this week announced aggressive new promotional deals for its high-speed DSL and Fios, fiber-to-the-home Internet services, as it tries to tempt new subscribers.

New Verizon DSL customers can get six months of free Internet service if they commit to a one-year contract. The company also announced a slew of deals for Fios customers, including one that offers new Fios TV subscribers who sign up for service as part of a bundle, free multiroom DVR capability for three months.

These deals sound terrific to consumers, like me, who live in markets with at least two broadband competitors. But for millions of Americans living in rural regions of the country and for people living in some urban areas, where carriers don't find it profitable to offer service, only one choice of Internet provider exists today.

And as a general rule of thumb, these consumers aren't usually offered enticing promotional deals or discounts on service. In fact, on average they pay much more for their services than people living in more competitive markets.

A task force at the Federal Communications Commission that is developing a national broadband policy highlighted this fact as a major barrier to universal broadband access during an open meeting at the commission on Wednesday.

The group also noted that broadband service providers tend to deploy service in higher income neighborhoods where more people are likely to sign up for service over low-income areas. As a result these markets generally have only one provider. What this means is that lower-income people, who have less disposable income, are often the ones forced to pay higher prices, while people who have more money pay lower prices for service.

Big savings in the Big Apple
To test this concept and to see if I could significantly put a dent in my monthly expenses, I decided to investigate my own broadband options in New York City, where I have lived and been a cable subscriber for nearly 12 years. With a little bit of leg work, I quickly discovered, I could save nearly $700 in one year by switching broadband providers.

I currently pay about $147 a month for cable TV and broadband service from Time Warner Cable. This bill does include two DVRs, two remote controls, and HBO channels and on-demand services. But it does not include taxes or a home phone service.

I live on the Upper West Side of Manhattan and even though I have seen Verizon putting fiber underneath the street on my block and even though my inside sources at the company have told me that two central offices near my neighborhood are currently being upgraded this month to provide Fios TV service, I am still not yet eligible for Fios service.

The only option I have from Verizon right now is DSL service. With the new six-month broadband-for-free promotion, Verizon is offering a triple play package that includes 3 Mbps or 7.1 Mbps DSL, DirecTV Plus DVR package, and Verizon's unlimited local and long-distance calling plan for $70 per month for the first six months.

During the second six months of this annual plan, the bundle with up-to-3 Mbps service is $99.99 per month. And for the faster 7.1 Mbps broadband service, the price is $109.99 per month after the first six months.

Factoring in the first six months of free DSL service in this total package, my average monthly cost would be $90 per month for home phone, broadband, and subscription TV services. This is an average savings of $57 per month over my current service, and a yearly savings of about $684.

I called Time Warner Cable to see if the company could beat Verizon's price. The best price offered to me for the same exact package, which includes one set-top box with DVR service, was $119 per month before taxes. The only difference in this package is that I would not have to sign a contract, but the price would be guaranteed for a year. The representative I talked with on the phone offered to give me free Showtime service for a year to sweeten the deal. Even at this price, Verizon's offer is still $29 a month cheaper than Time Warner's revised service. In total, I would still be saving $348 for the year.

But there is one catch to Verizon's deal. Verizon guarantees the price of the bundle for a year. And if customers cancel the service during that time period there is an early termination fee. But DirecTV requires users sign a two-year contract. And pricing on the TV service is not guaranteed during the second year, which means it could go up significantly in 2011.

What's more, if Fios becomes available in my building, I can upgrade my Internet and phone services at no penalty. And I would be eligible for whatever special deal Verizon might offer me. But I would have to pay a penalty to DirecTV if I terminate my TV service early to get Fios TV.

Still, with a yearly savings of almost $400 to $700 sitting on the table, I'd be a fool not to make some kind of change now. But just imagine if there was a third or even a fourth competitor in my market? The savings could be even greater.

More competitors lead to lower prices
According to a Pew Internet and American Life Project study released in June, the more competitors there are in a market, the cheaper the price of the service for consumers. In the survey, about 21 percent of high-speed Internet users said they had only one choice in broadband provider. And on average these customers spend about $44.70 a month on high-speed Internet service. About 69 percent of respondents said they had two choices in broadband providers, and on average they spent about $38.30 on Internet per month. Average prices fell yet again for the 17 percent of respondents who said they had four or more broadband provider choices. The average amount they paid for service was about $32.10 per month.

What this tells us is that more choices matter. And when broadband service providers are forced to compete, consumers get better deals.

This basic thesis was also the conclusion of a recent study (PDF) commissioned by the FCC and conducted by Harvard University's Berkman Center for Internet & Society. This study concluded that that other countries have faster and cheaper Internet access because there is more competition. The report went on to conclude that this new competition was made possible by regulatory policy that promoted open-access rules or rules that force service providers to share their infrastructure with competitors.

"The lowest prices and highest speeds are almost all offered by firms in markets where, in addition to an incumbent telephone company and cable company, there are also competitors who entered the market, and built their presence, through use of open access facilities, " the report says.

The report has gotten plenty of criticism. AT&T and the National Cable & Telecommunications Association have filed letters warning the FCC against applying the findings to its national broadband policy. The NCTA said the FCC should be careful in accepting these results when past attempts here in the U.S. to impose open access rules have failed.

Whether open access rules really create more competition is debatable. But one thing that cannot be debated is the effect that more competitors have on prices and the quality of service in the overall market.

With this in mind, I hope that the FCC's new national broadband policy, when it's finally presented to Congress in February, will do more than simply ensure everyone in the U.S. has access to at least one broadband provider. I hope the plan also includes aggressive measures to encourage competition among two or more companies in as many markets as possible.

When you've lost the first round in your case against Verizon's persistent and persuasive mockery, who do you turn to?

Luke Wilson, that's who. After all, he starred in "Legally Blonde" and, well, "Jackass Number Two."

Actually, Wilson is lovable. Truly lovable. Perhaps if he'd dressed down a little and Justin Long had suffered an interminable hiatus hernia, Wilson might have got the part of Mac, the Microsoft Mocker.

Instead, he has the slightly more difficult task of persuading the folks who adored him in "Old School" that AT&T's 3G will serve them well on the 3.10 to Yuma.

The creators didn't give him much of a script, as I suspect they wrote it a couple of lattes and a shot of bourbon before this opus was filmed in what looks like the empty space above Victoria's Secret in Santa Monica, Calif.

Luke is forced to stand before a board and prove that AT&T has the fastest 3G network, lets you talk and surf at the same time, and offers you more apps that feature people making strange noises, half-clothed women, and animals that smile when you touch the screen. (Disclosure: slight exaggeration)

Sadly, it all looks a little analog. Luke looks as if he'd prefer to be surfing, as he really doesn't have the tools to make you believe what he's being paid to say.

His hair looks as if it's been hurriedly greased with Czech lard and his face offers a certain hemorrhoidal mien as it offers a little jape at the end of the spot. Yes, a jape about Verizon beginning with "V" and AT&T not beginning with "V." That rumbling you can hear is the collective guffaw from Verizon Central.

Verizon is hurting AT&T with its clinical, delighted unpleasantness. And I fear that before "Legally Blonde 2: AT&T's Revenge" can possibly be effective, the iPhone carrier needs to dramatize its argument rather better than the gospel according to Luke.

AT&T has lost the first battle in a legal war against Verizon Wireless to force the company to stop showing advertisements that compare its 3G wireless network coverage with Verizon's coverage.

A federal judge in Atlanta on Wednesday declined to grant AT&T a temporary restraining order that would force Verizon to stop showing the ads.

(Credit: Verizon Wireless)

AT&T filed a lawsuit in federal district court in Atlanta earlier this month asserting that Verizon Wireless' advertisements mislead customers by suggesting that AT&T subscribers cannot access wireless Internet services throughout its network. AT&T has called the ads blatantly false and has said that the commercials have caused irreparable harm to the company.

AT&T had asked the court to keep Verizon from running the advertisements until the matter is settled in court. But the judge on Wednesday declined this request.

The advertisements that Verizon is running show two maps that each indicate 3G wireless coverage. One map shows coverage for Verizon and the other depicts AT&T's coverage.

AT&T doesn't argue that the maps are incorrect in terms of showing its 3G coverage. But it says that Verizon is misleading customers by implying that they cannot use their phones or access the mobile Web when they aren't in 3G coverage areas. The reality is that customers can make phone calls and access the Internet from their phones using the company's slower EDGE or GPR networks.

Verizon argues its advertisements are simply pointing out the fact that AT&T has not invested enough in upgrading its network to handle increased traffic from smartphone devices, such as the Apple iPhone.

Verizon has modified its ads slightly to indicate that the map applies only to 3G coverage and not regular 2.5G service, which is adequate for making voice calls and connecting to the wireless Internet at slower speeds.

Verizon said in its 53-page rebuttal to the court earlier this week that AT&T is not suing Verizon because the claims are false, but because it doesn't want to face the truth about its network.

AT&T said it plans to press on with its case despite the fact that it lost the latest legal battle.

"While we are disappointed with the court's decision on our request for a temporary restraining order, we still feel strongly that Verizon's ads mislead consumers into thinking that AT&T doesn't offer wireless service in large portions of the country, which is clearly not the case," Mark Siegel, a spokesman for AT&T, said in an e-mail. "We look forward to presenting our case to the court in the near future."

More mobile carriers are offering Netbooks as a way to lure new customers--a trend that's likely to surge and encompass notebooks as well.

Hewlett-Packard Mini 1151NR via Verizon Wireless.

Credit: Verizon Wireless

By 2013, more than 60 percent of all mobile devices, including Netbooks and notebooks, are expected to be sold directly by wireless carriers, according to research released Wednesday by In-Stat. Almost 31 percent of notebooks alone will be sold through carriers, In-Stat predicts.

Bundling an inexpensive Netbook or notebook is a small price to pay for a carrier, which can then charge customers for a monthly data plan.

"In the U.S., carriers are charging up to $60 per month for a two-year contract with the subsidized purchase of a Netbook," In-Stat analyst Jim McGregor said in a statement. "While the subsidy costs the carrier $50 to $100, it generates $1,440 or more in service fees over the life of the contract."

Carriers such as Verizon Wireless, AT&T, and Sprint have already been dangling Netbooks as carrots to attract more mobile customers. Verizon is selling Netbooks from Hewlett-Packard and Gateway. AT&T is selling Dell, Acer, and Lenovo Netbooks, as well as a Nokia Booklet 3G. Sprint is also selling a Dell Netbook.

Thanks to the success of low-cost Netbooks, U.S. carriers are further testing the waters by bundling full-size notebooks along with a two-year contract. The strategy isn't just limited to the United States, noted In-Stat. Carriers in Europe and Asia are giving out Netbooks with a data plan, but often at lower prices than in the U.S. Asian carriers have also been offering the kissing cousins of Netbooks: mobile Internet devices and ultramobile PCs.

This trend will intensify as carriers boost the number of services offered and cut prices on those services due to higher competition and better bandwidth, In-Stat said. The mobile market itself is also expected to become more attractive, with richer content and increased bandwidth.

Verizon Wireless said AT&T is suing the wireless operator not because its recent ads are untrue, but because the truth hurts.

AT&T earlier this month filed a lawsuit claiming that Verizon is misleading customers by suggesting that AT&T subscribers cannot access wireless Internet services throughout its network. In the opening paragraph of its legal rebuttal to the suit, Verizon very plainly surmised its argument: "AT&T did not file this lawsuit because Verizon's 'There's A Map For That' advertisements are untrue; AT&T sued because Verizon's ads are true and the truth hurts."

The rebuttal filed on Monday in a Georgia district court was in response to two complaints AT&T filed with the court asking that the Verizon advertisements be pulled from the airwaves. AT&T has called the claims in the advertisement "false" and "misleading." And the company claims it has caused "irreparable harm" to AT&T's wireless business.

Verizon representatives have responded to the press on these claims. But now the company has filed its official response to the court in a 53-page document that lays out the company's defense.

Verizon argues its advertisements are simply pointing out the fact that AT&T has not invested enough in upgrading its network to handle the tidal wave of data traffic experienced by the release of the Apple iPhone, which AT&T sells exclusively in the U.S. Verizon says that it is simply highlighting what many AT&T iPhone customers have already recognized.

"In the final analysis," Verizon said in its filing. "AT&T seeks emergency relief because Verizon's side-by-side, apples-to-apples comparison of its own 3G coverage with AT&T's confirms what the marketplace has been saying for months: AT&T failed to invest adequately in the necessary infrastructure to expand its 3G coverage to support its growth in smartphone business, and the usefulness of its service to smartphone users has suffered accordingly. AT&T may not like the message that the ads send, but this Court should reject its efforts to silence the messenger."

Verizon's initial advertisement, which began airing on TV November 3, shows two maps with red and white splotches indicating 3G wireless coverage. The white area indicates no 3G coverage, and the red indicates areas where 3G service is available. In the ad, Verizon shows an AT&T map that has lots of white spaces, whereas the Verizon map is almost covered in red.

AT&T claims the ad is misleading because it implies that AT&T customers can't use their phones and cannot access the mobile Internet in areas where the carrier does not offer 3G wireless coverage. The truth is that AT&T customers can use their phones and they are able to access the wireless Net using the company's slower EDGE network.

Verizon has modified its ad slightly to indicate that the map applies only to 3G coverage and not regular 2.5G service, which is adequate for making voice calls and connecting to the wireless Internet at slower speeds.

In its filing, Verizon argues that its ads refer explicitly and solely to AT&T's 3G network coverage. And therefore the advertisements should be evaluated on that basis. Verizon claims that it is a fact that its 3G wireless network covers five times more geographic area than AT&T's 3G network. And because this is an undisputable fact, the company should be able to use this in its advertisements.

Verizon pointed to AT&T's own advertisement claims that it operates the nation's fastest 3G wireless network.

"Despite the far smaller size of its 3G network, AT&T has spent tens of millions of dollars making its 3G network, which it dubs the "Nation's Fastest 3G Network," the centerpiece of its national advertising since at least the summer of 2008," Verizon argued. "AT&T now is attempting to silence Verizon's ads that include maps graphically depicting the geographic reach of AT&T's 3G network as compared to Verizon's own 3G network because AT&T does not like the truthful picture painted by that comparison."

But AT&T still asserts that the advertisements Verizon is running are misleading.

"We filed the lawsuit because Verizon's ads mislead customers into thinking that AT&T does not offer wireless service in the vast majority of the country," said Mark Siegel, a spokesman for AT&T. "We look forward to presenting our case."