Apple's jumped into the Verizon versus AT&T fray, according to BusinessWeek, with a couple of new ads -- and, somewhat surprisingly, they come out in full defense of AT&T. Both ads show an iPhone user in the middle of a phone call who multitasks by looking up movie information, restaurant ratings, and many other things over AT&T's 3G network. The ads end with the question, "Can your phone and your network do that?" with a very prominent AT&T logo in the final seconds of the ads.

As I'm personally somewhat on the outside looking in at the U.S. telecom spats, I don't know how much US smartphone users really miss the ability to do simultaneous data browsing and phone calls while on Verizon's network. Based on what I've heard about AT&T's network reliability, however, there are some areas of the U.S. where you'll be lucky to be able to make and receive calls at all, or hold on to a call in progress, much less multitask in the manner depicted in these ads.

What's most interesting about these ads is how favorable they are to AT&T. It's no secret that Apple's been less than thrilled with AT&T over the course of their relationship, and it's even less of a secret how dissatisfied U.S. customers have been with the telco giant. It's understandable that Apple wants to paint the iPhone in a favorable light, but I'm admittedly surprised that they seem to be going to bat for AT&T at the same time. Sure AT&T is their business partner, but from my point of view this smells a lot like telling your family that your less-than-presentable date for Thanksgiving has 'a really great personality.'

Read on to see the ads in action.

The Associated Press is reporting that an Atlanta Federal judge has denied an AT&T request to pull the Verizon 'there's a map for that' ads.

The judge has set a December 16th hearing to give AT&T another chance to make a case.

AT&T filed suit earlier this month looking for a temporary restraining order to stop the ads, and wanted a permanent injunction to halt them. The ads say that the AT&T network is not up to the quality or range of the Verizon network, and shows two coverage maps to make the point. AT&T claims the maps are misleading, and injures the company reputation.

Verizon has said the commercials are truthful and accurate.

The case pits the two communication giants against each other as they fight for increasing shares of the mobile market. AT&T has an exclusive on the iPhone, and that has brought AT&T an increasingly growing share of mobile customers.

Verizon was reportedly offered an exclusive on the iPhone more than 2 years ago but turned it down. There have been sporadic reports that Verizon would like to get the iPhone back when the AT&T contract expires, but with some Verizon ads targeting the iPhone as well as AT&T that looks to be increasingly unlikely.

Verizon isn't fazed by the AT&T legal claims that the Verizon ads attacking poor coverage are false and misleading. Our sister site Engadget broke the story of the Verizon response to the suit and you can read the it here.

Verizon isn't pulling any punches and says "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."

Then to drive home the point:

"In the final analysis, 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."

Ouch!

This latest salvo follows AT&T sending a message to customers complaining about the Verizon ads and telling customers their coverage is great, that they sell more smartphones than Verizon and that the AT&T 3G network is faster. So there.

Well AT&T, your move. It's great for the lawyers, and actually, we admit we just love the spectacle.

AT&T is clearly not going to take it anymore. Today, they blasted back at Verizon for the nasty ads about AT&T coverage.

In a press release today, the communications giant pulled out all the stops:

"AT&T's wireless data coverage reaches 303 million people – or 97% of the U.S. population, where they live and work.

AT&T is the #1 network for smartphones, with twice the number of smartphone customers than Verizon, our closest competitor. Some of the reasons include:

Most popular smartphones. Unlike Verizon, AT&T offers the most popular smartphones in the industry.

More wireless apps. Unlike Verizon, AT&T customers have access to more than 100,000 applications, more than with any other wireless company.

Talk and E-mail at the same time. Unlike Verizon, AT&T's 3G network lets wireless customers simultaneously talk and surf the web or do e-mail.

Fastest 3G in the nation. Unlike Verizon, AT&T has the nation's fastest 3G network."

It's a bold move to respond to someone doing a number on you. Microsoft tried to counter Apple pricing with mixed reviews, and AT&T, unlike Apple, has a lot of unhappy customers. This will be fun to watch, but one wishes AT&T was improving service and features (tethering anyone?) instead of getting into these lawsuits and public mud baths.

The "Reset Network Settings" button on the iPhone not only resets your Wi-Fi settings -- resulting in a clean slate with respect to Wi-Fi access points and their passwords -- it also resets your phone carrier settings. Several months back, I had the darndest trouble with cellular data access. I could place and receive calls, but couldn't get cellular data access no matter what I did. I tried going into and out of airplane mode, turning the phone on and off, and resetting it, all with no luck.

So I decided to call AT&T. Apparently, one of the cell phone towers near my office was having trouble and fell out of and back into commission. And although the tower was back up and running, my iPhone was stuck in cellular data purgatory. AT&T support suggested that resetting the network settings on the device would likely resolve the issue: and it did. Resetting network settings has also helped me resolve an issue I was having with Visual Voicemail on another occasion.

To reset your iPhone's network settings, tap your way to Settings > General > Reset > Reset Network Settings. With great power also comes great annoyances, like having to reconnect to previously remembered access points and having to re-enter passwords.

Boy Genius Report is claiming that two separate sources have told them that AT&T is looking to sell an 8GB iPhone 3GS for $99 US before Christmas. While this news wouldn't come as a shock, it would certainly take more than AT&T to make it happen. As most of you know, Apple doesn't make an 8GB iPhone 3GS and it would probably mean the discontinuation of the iPhone 3G in general.

If you think back to the time of the first generation iPhone (it was so long ago now), you'll probably remember that Apple quickly discontinued the 4GB iPhone after realizing that most people were opting for the larger capacity. Not too long after that, Apple introduced the 16GB version and discounted the price of the 8GB. Now that the iPhones themselves are subsidized by the wireless carrier, the game is a little different.

I doubt that we'll see AT&T discount the 16GB iPhone 3GS to $99 US, even though it would be a huge strategic move before the holiday season, but I have a hard time believing that Apple would be willing to manufacture an 8GB iPhone 3GS. It's one thing for them to continue with the 8GB iPhone 3G because they already have the manufacturing in place, but for Apple to start manufacturing another iPhone 3GS at a capacity less than its current models -- that just seems out of place.

I've found it disappointing that the iPhone (a professional device) has had a smaller capacity than that of its sister, the iPod touch. Currently, the iPod touch is shipping at a top capacity of 64GB and the iPhone only 32GB. Here's the point: if AT&T and Apple could work together and release the 16GB iPhone 3GS at $99 then that could potentially allow for the 32GB at $199 and a 64GB model at $299. That would be a killer plan for the two companies just before the holiday season.

While this may be far-fetched, I don't think it's impossible: Apple did release a bump in storage to the 16GB iPhone in early 2008 without any warning. Here's hoping that they do that again.

Stung by some pretty aggressive advertising by Verizon, AT&T has had enough and is suing the communications giant for false and misleading claims.

AT&T says the ads, which show that AT&T has poor 3G coverage compared to Verizon are causing it to lose "incalculable market share."

According to the lawsuit which AT&T filed in Atlanta federal court, a recently broadcast ad campaign shows maps with white spaces that mislead consumers into thinking AT&T has no network coverage outside of areas where it offers high-speed mobile services, known as 3G.

But AT&T argued that its customers can "fully use their wireless devices outside of a '3G' coverage area and undisputedly have coverage in areas depicted by white or blank spaces on the maps used in Verizon's advertisements."

Verizon says the lawsuit has no merit, and Verizon Wireless spokeswoman Nancy Stark said the ads "clearly state" that voice and data services are available outside 3G areas. She said the ads were intended to tell consumers about coverage for smartphones, which are used for data services.

If you want to see the ad that sparked the lawsuit, click here.

[via Engadget]

Reports of trouble for AT&T's 3G network have done nothing to keep people from the iPhone in the U.S.

The nation's second largest wireless carrier announced third-quarter earnings Thursday morning that were full of iPhone goodness. AT&T (T) activated a record 3.2 million iPhones in 3Q, 40% of which went to people new to the company.

Wireless data was the supporting star of the show. Services such as messaging, Internet access and the like were up 33.6% from 3Q of 2008 to $3.6 billion. Data sales now account for 29.4% of AT&T's wireless revenue.

The company's earnings were relatively flat, having posted a profit of $3.2 billion, or 54 cents a share for 3Q '09 versus $3.23 billion or 55 cents a share for 3Q of '08. AT&T did, however, bring in enough to beat analyst expectations. The street was only looking for earnings of 50 cents a share.

[via MediaPost, Marketwatch]

Update: As of this writing, Total Apps reports that it's back in the UK App Store. We still don't see it in the US store.

That sure didn't last long. Just shortly after the discovery of a 3G "backdoor" for the EyeTV app, it has been pulled from the App Store.

The workaround let users of the app stream video over a 3G or other cellular network connection, something that AT&T has objected to in the past. Specifically, users can connect to ElGato's My EyeTV service to schedule and stream recordings.

When users try to stream video outside of a Wi-Fi connection, a dialog box appears saying that a Wi-Fi network is required, but streams the video anyway. Elgato says they have just submitted an update to Apple, after Apple removed it from the App Store, removing "test code" that allowed this streaming:

"Some test code that enabled live TV streaming over the cellular network was accidentally left in the the EyeTV App. Apple requested that we remove the code since their agreement with AT&T does not allow redirecting TV signals over the cellular network. The code was removed and a 1.0.1 version of the EyeTV app was submitted," they told TotalApps.

This app rejection is similar to the removal of the Commodore 64 app, that was pulled after hidden access to a BASIC interpreter was discovered. This removal adds just more trouble and frustration to users and developers, especially because of the current state of the Google Voice app.

[Via Total Apps]

iPhone users have been waiting for tethering for a long time. More specifically, AT&T customers are still waiting for it. Since the WWDC 2009 Keynote Address, where it was announced that iPhone OS 3.0 would support tethering, AT&T has said they would support it... sometime.

Appmodo.com is reporting that iPhone tethering will not be available this year. They suggested that AT&T had previously gone on-record saying "that iPhone tethering would become available 'sometime this year'" -- presumably referring to this quote on CNet.com, from AT&T Mobility chief Ralph de la Vega who said (in November of 2008) that "iPhone 3G users will be able to use their phones as wireless modems at some point next year," which would obviously mean 2009.

The Appmodo story links to an article by Andrew LaVallee, writing for The Wall Street Journal's Digits blog, who quotes an unnamed spokesman for AT&T who refused to say when tethering would be available and said: "Whenever we offer new features, we want to offer the best possible customer experience. For tethering, we need to do some additional fine tuning to our systems and networks so that we do deliver a great experience."

Appmodo seems to think this is a change in AT&T's official stance, but LaVallee explicitly refers to it as "the company's prior statement."

When it comes to iPhone tethering, has Appmodo gotten the story straight before? Well, on June 17th they quoted a source who said "The highly anticipated tethering option will also be delivered towards the end of July with pricing around $55 per month..." -- then on June 19th, AT&T explicitly denied the $55 cost via their Facebook page.

On July 9th they quoted the same source saying that MMS and tethering were coming in September, and repeated the "around $55" estimated cost which had already been dismissed on the record. Appmodo added, "Our source is from an undisclosed reputable AT&T employee." So much for that. Granted, we've also been off the mark on tethering rumors, but we're trying not to make such a habit of it.

When will AT&T make tethering available? The answer is that no one outside of AT&T and Apple knows. AT&T isn't saying, but what Appmodo is seeing as a change in the answer, the WSJ says is the same line they've heard before. Given the way Appmodo has been reading the tethering tea leaves, I am highly skeptical that this represents an official schedule change -- sure, tethering might not show up until 2013, but that was just as true last week as it is today.

Business Insider is reporting that AT&T has given Apple the go-ahead to enable Voice over IP (VoIP) apps such as Skype on its 3G network. In the past, VoIP apps required a Wi-Fi connection.

The announcement was made in advance of the annual conference sponsored by CTIA - The Wireless Association. AT&T Mobility CEO Ralph de la Vega is scheduled to give a keynote at the conference tomororw and could use the event to further elaborate on their intentions.

The announcement is most likely a response to recent events at the Federal Communications Commission (FCC), which is proposing new rules that would prohibit carriers from blocking apps on their networks.

A public announcement by AT&T stating that they will allow apps such as Skype on their network would remove any doubt that it's the company that is doing the blocking, and put the spotlight firmly on Apple to explain why they're not approving VoIP apps. As noted yesterday, VoIP provider Vonage has made its app available in the App Store, although ratings after the first day probably make them wish they hadn't...

It should be noted that the announcement will likely have no bearing on the fate of Google Voice, which was rejected by Apple on the grounds that it duplicates functionality already found in the iPhone. The Google Voice app allows users to control their Google Voice account, send SMS messages and check voicemails, but does not provide any VoIP functionality.

Dear Auntie T,

My father-in-law (long time reader) has the old original iPhone. He finally made the jump and got himself a brand new shiny 3G S. My mother in law wanted the old phone, and promptly took her SIM card out and popped it in the old phone. It should have worked. It did not.

It prompted her to connect to iTunes and then tried to get her to choose a data plan, which she didn't want. All she wants is the essential function of a cell phone with a nice iPod layered on top. Wifi would be nice. She couldn't be less interested in a data plan.

This used to be possible. Is it now not possible? A good friend of mine, somewhat recently did this very thing and had no problem whatsoever. He is happily chugging along with a data-free iPhone 3G. ATT is giving them grief over the phone and won't let her use the phone without a data plan, despite the fact that the iPhone, being the original one, is owned outright and is not subsidized in any way.

Love and kisses,

Lauren

Read on for Auntie's response....

Editor's Note: We welcome guest poster Murphy Mac, a long-time friend of the site who shared with us his experience of setting up one of the new femtocell AT&T repeaters that promise to improve reception for well-heeled iPhone users... or will they?

Good times for Charlotte, North Carolina: First AT&T makes Charlotte one of six cities getting a 3G speed boost by the end of 2009. On the heels of that news comes the MicroCell, a device that facilitates AT&T 3G calls where coverage is weak or nonexistent.

How? The MicroCell acts like a miniature cell tower in your home or office. Your 3G phone connects to the MicroCell just like it's any other tower. Voice and messaging traffic is then relayed across your broadband Internet connection. Charlotte is the sole initial test market for AT&T's version of the device, though other carriers are distributing their femtocells more widely.

Here's the full breakdown on pricing:

Purchase Price: $150
Monthly Charge: None

Optional Unlimited Voice Minutes Plan while using MicroCell:

AT&T Customer with both AT&T landline and DSL: Free
Customers with AT&T Landline or DSL: $10 per month
All others: $20 per month

I installed a MicroCell for a friend the other day, and after one small hiccup it's running. But is it everything I hoped it would be?

Setup for the MicroCell is straightforward. Most users will probably connect it via Ethernet to their router, which is exactly what we did. Optionally, the device can be placed between the router and the modem, giving MicroCell traffic priority handling over other Internet connectivity. If you don't have a router, the MicroCell can be plugged directly into your broadband modem and your computer can be connected to the MicroCell.

File this one under AYFKMWTS (are you freaking kidding me with this stuff?): a Gizmodo reader, aggravated with an unacceptably high rate of dropped calls on his iPhone, took it to a New York City Apple Store to have it checked for issues. The call dump statistics revealed a 22% drop rate on calls, which most of us would call "wicked awful" -- but not Apple and AT&T.

No, in this particular case the Genius told our hapless iPhone owner that he should count himself lucky, as Apple's baseline stat for dropped calls in NYC is a blistering thirty percent. Yes, almost one in three calls on an iPhone in the Big Apple will end with frustration, and that's just OK with everyone.

Well, not with us. Combined with the "five bars, no calls" dead zones and mysterious "call failed" issues, it must be said: this phone is not getting it done when it comes to the whole phone thing, at least on AT&T's network in the city that never sleeps. Or, for that matter, makes an uninterrupted cell call.

[via Engadget]

The long awaited and much vilified AT&T MMS service was finally launched in the U.S. yesterday. I've scoured the Apple support boards, and it seems like it was pretty tame, with some reports of failure to get the update, failure to get the MMS functions after an update, late delivery of MMS messages, and so on.

In my own circle of friends it seemed to go OK, but most of them didn't need MMS and didn't really care about it one way or the other.

So how was it for you? The update of your dreams, or your worst nightmare?