AT&T, Verizon Bury Legal Hatchet -- For Now

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AT&T and Verizon Wireless on Wednesday agreed to drop their false advertising-related lawsuits against each other, bringing a halt to the reciprocal mudslinging that's been going on between the two over which has the best network coverage.

AT&T dropped the lawsuit it filed in early November over Verizon's "There's a map for that" campaign, which ridicules Apple's iPhone/App Store slogan while also questioning the ubiquity of AT&T's nationwide 3G coverage. Verizon dropped the lawsuit it filed in July which took aim at AT&T's "more bars in more places" slogan, which transformed the two carriers' prior bickering into a full scale legal fight.

The back-and-forth between Verizon and AT&T has been one of the more intriguing tech industry story lines of the year, as it effectively illustrates the intensifying competition in the mobile space. The Verizon-AT&T skirmish also contains many subplots, such as Verizon boldly taking shots at the iPhone despite the device's continued emergence as a cultural phenomenon.

In Verizon's original "There's a map for that" spot, and a subsequent one that depicts the iPhone as a candidate for the Island of Misfit Toys of "Rudolph The Red-Nosed Reindeer" fame, Verizon is reaching deep into its marketing creativity bag and coming up with some real winners. Verizon is spending $100 million to promote its new Motorola Droid smartphone, but with the carrier on track to sell one million Droids by year's end, this certainly looks like money well spent.

In fact, it's hard to look at this competition and not conclude that Verizon is scoring more points right now. AT&T initially tried to get the court to force Verizon to stop running the ads, and when the judge denied that request, AT&T aired its own Verizon bashing ad featuring actor Luke Wilson. But AT&T is going to need more than a B-list celebrity of dwindling fame to win this battle, especially since Consumer Reports, in its annual wireless customer satisfaction survey, rated AT&T last among the four major U.S. carriers in 19 of the 26 cities it surveyed.

Meanwhile, now that the legal hounds are under control, AT&T and Verizon can get back to more business critical tasks that involve upgrading their networks and providing the best possible service for customers. Of course, anyone who believes things will actually play out this way is probably planning to wait up for Santa Claus later this month too.

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