In its second-quarter earnings call this morning, AT&T highlighted the awesome growth of its wireless business, which surged 14.8 percent to $11 billion and accounted for roughly a third of its $30.9 billion in revenue for the period. The company also said that the 3G iPhone was selling twice as fast as the first one, which given the price cut, isn’t too surprising.

Equally unsurprising was the 10 percent rise in the number of smartphone subscribers over the second quarter of 2007 (AT&T is the sole carrier of the iPhone in the U.S.). And those users are surfing the web, pushing AT&T’s data revenue up 52 percent from the same period a year ago, to $2.5 billion. After adding 1.3 million wireless subscribers during the quarter, AT&T is still the largest cell phone carrier with 72.9 million subscribers. However, Verizon said yesterday it had added 1.5 million subscribers, so the iPhone exclusivity can only do so much.

The tethered world was a little less rosy, however. AT&T did add 170,000 new U-verse subscribers, bringing that total to 549,000; it also reiterated its goal of having a million subscribers by year-end. But triple-play services were down and broadband growth is slowing. Subscribers to voice, data and TV fell to 48.4 million from 49.5 million at the end of the second quarter of 2007. And AT&T’s total broadband connections now number 14.7 million, up 1.4 million over the same quarter last year but a mere 46,000 higher than the first quarter of the year.

Verizon President and Chief Operating Officer Dennis Strigl made a big splash at NXTcomm 08 yesterday when he announced that the entire Verizon FiOS footprint could now get speeds of 50 megabits per second. Typically such bandwidth news wouldn’t cause that much of a furor, but there wasn’t much to write home about from the show, which was held in Las Vegas this week.

In his speech, Strigl pointed out that the U.S. has the highest number of broadband users when compared with other countries, in particular that broadband is available in every U.S. zip code. Good point — and one that I’ve made in the past myself — except that it’s no longer true. By that metric, China now leads. Yes, the FCC used to defined broadband as a service that offered, at a minimum, 200 kbps downloads, but it’s since changed that requirement to 768 kbps.

But where Strigl went too far was when he suggested that three-quarters of American households have two providers to choose from — aka a duopoly, which is not my idea of a competitive marketplace. If you factor in wireless and satellite, he said, there are actually six or seven competitors. Talk about twisting the facts to fit one version of the truth! This part of his speech, however, had me choking on my breakfast cereal.

“Massachusetts and New Jersey have similar population density to Korea and Japan and similar broadband penetration. Unlike other countries, what we have accomplished has come not through [government] policy but through private investment.

How telling. So subverting government policy via lobbyists and highly biased friends at the FCC to ensure a future monopoly is all part of good, capitalistic, private investment theory? Maybe Harvard can include that in its future MBA curriculum.

Regardless, I thought it would be fun to see how Massachusetts and New Jersey really square up against South Korea and Japan when it comes to the price of a broadband connection:

Average broadband speeds in South Korea and Japan are 49.5 megabits per second and 63.6 megabits per second, respectively. The average U.S. speed is about 4.9 megabits per second, making it the 14th-fastest country in the world. The average price in South Korea and Japan is about 83 cents per megabit. In the U.S, it’s about $2.83.

But since it would be unfair to use average U.S. stats, I went with Verizon’s prices, the ones it’s going to offer in Massachusetts and New Jersey. On Verizon’s FiOS network, a 50 Mbps connection costs $140 a month — or about $2.80 a megabit. In fact, if you went with Verizon’s 20 Mbps service, you would be paying $3.25 per megabit. (To be fair, Verizon’s price-per-megabit is still cheaper than the $5.25 Qwest charges for its 20 Mbps connection, which costs $105 a month.)

In other words, not until Verizon starts selling a 50 Mbps connection for $41.50 a month and 20 Mbps fiber connection for $16.60 a month can Strigl get away with comparing U.S. broadband with that of the rest of the world.

Verizon reported its first-quarter earnings this morning, with most things going as expected. Wireless is booming (1.5 million net additions, 13 percent revenue growth), FiOS TV’s demand seems to be picking up (263,000 new subscribers, putting the total at 1.2 million), and not surprisingly, the company saw accelerated decline in the number of wireline customers. During the quarter, the company lost 762,000 residential lines and about 186,000 lines.

In other words, there is a renewed urgency around FiOS offerings. The fiber broadband and TV offerings can help overcome some of the line losses. During the quarter, the company added 266,000 new broadband connections — 262,000 of which came from FiOS Internet service. The company had a total of 8.5 million connections: 6.7 million DSL-based Verizon High Speed Internet connections and 1.8 million FiOS Internet connections.

What that means is that Verizon’s DSL growth is all but over. At the end of 2007, the company had 8.2 million subscribers. Of the 300,000 new subscribers Verizon added in the first quarter of 2008, 262,000 are FiOS fiber subscribers. That leaves 38,000 DSL subscribers — or roughly 12,600 new additions per month. At present, FiOS Internet is available for sale to 7.9 million premises. Penetration for the service averaged 22.9 percent across all markets.

Verizon, like many other carriers, is in a race against time: It is critical for the phone companies to keep people talking on their lines if they want to sell them broadband and video services in the future.

Since everybody likes lists, here are the 10 things you need to know about the 4G technology known as Long-Term Evolution, or LTE, standard.

1. It began in 2004 as the next-generation networking technology pushed by the 3GPP
2. It’s fast — with peak data rates of 1o0 Mbps down and 50 Mbps up
3. It makes CDMA and GSM debates moot
4. It offers both FDD and TDD duplexing, which means the upload and download speeds don’t have to be synchronous, so operators can better optimize their networks to use more upload channels
5. It won’t be deployed until 2010 or so
6. Verizon is testing it with Motorola equipment, and AT&T has backed it too
7. LTE will have lower latency, which makes real-time interaction on high band-width applications using mobiles possible
8. It competes against WiMax, and some want to subsume WiMax into it
9. China Mobile is testing it, which means China may skip 3G networks altogether
10. While it will make mobile data faster, it may not bolster sales of networking gear

• The Street.com: Sprint, Clearwire Near WiMax Deal with $2B from Intel
• BroadbandReports: RIM Sues Motorola Over Patent Abuse
• ArsTechnica: Latest Google Android SDK a Big Improvement
• SmartHouse: Blu-Ray Xbox 360 planned
• TechDirt: Court Scrutinizes Software Patents Again
• Engadget: Verizon Offering Unlimited Plans

Like finding a $20 bill in your coat pocket at the beginning of winter, Sprint has “found” a potential source of revenue in its patent portfolio. While it will certainly be harder than reaching into a coat pocket, the beleaguered wireless carrier probably sees patent litigation as easier than its corporate turnaround.

After squeezing $80 million out of Vonage last year, Sprint has apparently decided that its 115 “voice over packet” patents might be its next cash cow. The carrier says it will sue four smaller phone companies — NuVox Communications, Broadvox Holdings, Big River Telephone Co. and Paetec Communications — for violating six of its patents associated with delivering voice over a data network. It is seeking damages and an injunction. Interestingly, the carrier didn’t try to negotiate with the providers before dropping the L-bomb on them. All of the carriers said they were reviewing the lawsuit and couldn’t comment at this time.

Considering that these six patents have been tried in the courts thanks to Vonage, Sprint is in a much stronger position when it comes to getting a licensing deal, which makes the fact that Sprint chose to go with a lawsuit interesting. It’s likely that when presented with the patent violations and a reasonable license fee, the companies could reach some common ground. Another VoIP company, VoiceGlo, was sued in 2005 along with Vonage, and negotiated an undisclosed license with Sprint covering its use of the patents.

That means Sprint is either going for the injunction (to shut down its competitors), or it is taking them to court in an effort to weaken them (by way of scoring a larger financial settlement). Either way, Sprint is playing hardball — and it isn’t alone.

After successfully coaxing a $120 million settlement out of Vonage last year, Verizon Communications is also asserting its VoIP patents against a competitor. Earlier this month, Verizon sued cable operator Cox Communications for infringing eight patents. Two of those patents are the same ones Verizon successfully defended against Vonage. Vonage may have had to pay millions, but it looks like the power its loss gives the incumbents might keep independent VoIP players paying for years.

The $250 million Vonage burned through as a result of the patent lawsuit brought by Verizon et al provides yet another example of why patents for business processes implemented on computers (a.k.a. software patents) deserve to die. Verizon’s two successful “name translation” patents negate an open standard assembled by Cisco, Microsoft, IBM, Intel and Vocaltec via the VoIP Forum during 1996. The threat of patent litigation cleared the landscape of independent VoIP companies the VoIP Forum sought to make possible.

Vonage survived and can look forward to a prosperous future as the third player in an oligopoly with the regional telcos and cablecos, but this hardly seems like the success story sought with the opening of patent protection to business methods in 1999. The work of the VoIP Forum built on the ITU H.323 standard, which dates back to 1991 , so Vonage’s loss in court does not owe to a lack of prior art. Vonage lost because of the difficulty in finding the proper documentation of prior art 15 years after the fact.

The antidote to software patents involves creating their exact opposite — a formal process of contributing software innovations to the public domain. Vonage’s experience, however, illustrates that the various standards-creating processes represent only a first step. A successful open-source model for patents requires creating a searchable archive of prior art in which inventors contribute their innovations in order to get protection from subsequent litigation.

This would replace the patent office’s dependence on the oath signed by patent applicants “acknowledging the duty to disclose all information known to be material to patentability.” Vonage’s decision to base its technical implementations on the work of the VoIP Forum and IETF seems reasonable. Who would have guessed the patent office granted Verizon a patent on the same subject matter?

Verizon’s “name translation” patents address the process of converting between an IP address and a telephone number during call setup. Absent the expectation of end users dialing IP addresses, all VoIP implementations will involve some form of “name translation.” A patent examiner trying to meet expectations of reviewing a patent per day can be excused for having missed the fact that the name translation issue arose with the ITU H.323 standard.

Questions remain over how Verizon failed to disclose the H.323 standard in their declaration, never mind the VoIP Forum’s efforts that built on the H.323 standard. Verizon’s first name-translation patent (’711) has a filing date two months after the VoIP Forum published the results of their efforts. Verizon’s prior art disclosures also failed to mention VocalTec Communications, the company credited with bringing the VoIP category to public awareness in February 1995. The author of the patent in question, Eric Voit, initiated a relationship with Lior Haramaty, a co-founder of VocalTec, in the same month he filed the first patent.

As project director for VocalTec, I was around then; I also led a joint venture with Digital Equipment that involved implementing Verizon’s first VoIP pilot in 1998. Eric Voit’s second patent, from February 2000 (’574), incorporates ideas addressed in detail during this pilot. However, Verizon filed the second patent as a continuation of the first — and it, too, was absent any disclosure about VocalTec or the VoIP Forum. The filing of the second patent as a continuation gives the claims the same prior art grace period as the first patent.

A formal process of filing prior art to the public domain will protect an emerging infocom industry better than just depending on overworked patent examiners and applicants for prior art searches.

Champions of a more open Internet could take a small bit of cheer from Yahoo’s plans, unveiled today, to open up its mobile platform to third-party developers. But the lack of a service-provider partner to endorse the idea is one clear sign that chief Yahoo Jerry Yang and all the other exclamation-pointers have a long way to go before they can expect to have a major impact on the growing market of the mobile web.

To be sure, plans like Yahoo’s Go or Google’s Android, which aim to bring the power of the open Internet to your handheld device, seem a preferable future than locked-in services like Verizon’s VCast. But without a service-provider partner to watch its back, Yahoo (YHOO) seems unable to answer a big looming question for open-Internet apps accessed via a cellular phone: How fast will the app perform, and how much will it cost to download the data?

Here at CES this year, there’s evidence of a trend toward more single-purpose devices or agreements (like Sony’s Skype/PSP deal, which has BT as the phone power behind it) that are complete with the service necessary to deliver the goods.

On the video side, LG has an interesting plan to give existing broadcasters a mobile outlet, just another one of the competing methods arising to bring TV to places you never thought possible. But like Yahoo’s ideas, such plans don’t mean a whole lot unless the service providers play along.

Since we weren’t able to view the Yang speech live here at CES (long bus lines and the absence of transporter technology kept us from getting from the Sands to the LVCC in time), we weren’t able to question Yahoo folks afterwards about service-provider buy-in for Go 3.0. But there’s plenty of time ahead for answers.

Paul Kapustka, former managing editor for GigaOM, now has his own blog at Sidecut Reports.