AT&T has unveiled their third quarter earnings, which among other things indicate the company added the most iPhones ever in a single quarter. According to AT&T, they activated 3.2 million iPhones during the third quarter, with forty percent of those customers new to AT&T. The data suggests that despite AT&T's network headaches, the lure of the device is simply too great for many to resist. iPhones represented 74% of the 4.3 million postpaid, integrated devices activated by AT&T last quarter as AT&T tries to extend their exclusive distribution arrangement with Apple.

More shiny new iPhones means more people paying $30 a month for data (whether they use that much data or not), and AT&T's wireless data revenues jumped 34% from last year's, to $3.6 billion. AT&T continues to see huge subscriber additions in wireless. The company added 2 million new subscribers to bring their wireless subscriber total to 81.6 million. Once lured in by the iPhone, many customers stay because of the iPhone (and long term contract ETF penalties), as AT&T continues to have the lowest customer defection rate in the industry.

In the summer of 2008 we noted that AT&T was no longer taking new orders for their Callvantage VoIP service. The company of course wanted to begin pushing their U-Verse Voice VoIP product a little harder, but employees also hinted to us that AT&T was cooking up a new bring your own broadband (BYOB) VoIP offering as well. That BYOB service still hasn't arrived, but AT&T this week gave a concrete date for the CallVantange shutdown, which previously was vaguely scheduled for sometime this year. According to an e-mail being sent to customers this week, CallVantage will officially be shuttered on Novermber 17. Hopefully, the seven of you still using AT&T's CallVantage service find this information useful.

For years, AT&T has been fighting with the state of Connecticut over whether U-Verse should adhere to cable regulations, the placement of AT&T U-Verse VRADs, and AT&T's customer service record in the state. More recently, Connecticut Attorney General Richard Blumenthal has taken aim at excessive executive compensation, requiring AT&T, Verizon and every other public utility to report executive salaries on a yearly basis.

As phone companies move into the fourth quarter, they're unveiling their new bundle promotions in their fight against cable operators. Verizon this week offered up several new promotions that include a $150 gift card rebate and free installation for FiOS customers, or three months of free DSL for new customers.

AT&T, Comcast and Verizon all came under fire recently for suggesting the baseline definition of broadband should remain low (as in, between 200-768 kbps), given that means they'd have less work to do -- and less government oversight into their affairs. AT&T's comments to the FCC (pdf) went one step further, arguing that video gaming should not be considered an essential component (like e-mail and browsing) when discussing broadband definitions, and is instead an "aspirational" service.

Last week New York Representative Eric Massa introduced a bill aimed at stopping ISPs from nickel and diming consumers with steep overage charges. AT&T reacted swiftly -- claiming their metered billing trials in Reno and Beaumont are about being fair to grandmothers, and have absolutely nothing to do with protecting U-Verse TV revenues from Internet video.

AT&T issued their first quarter earnings this morning, which indicate the nation's largest broadband company added 471,000 broadband subscribers, 359,000 of which were U-Verse and DSL customers. According to AT&T, the carrier added 284,000 net U-verse TV customers, giving them 1.3 million total subscribers and 16.7 million broadband customers in total. The carrier beat most Wall Street estimates, posting a net income of $3.1 billion on revenue of $30.6 billion. AT&T added 1.6 million iPhones in the first quarter, down from 1.9 million in Q4 and 2.4 million in Q3. "We are seeing strong broadband and voice attach rates," for their U-Verse services, AT&T spokesman Seth Bloom tells us.

Time Warner Cable may have slightly buckled (for now) on their plans to institute low caps and high overages, but AT&T is still testing their own metered billing system in Beaumont, Texas, and Reno Nevada. A DSL user near Lake Tahoe complains to GigaOM that users in this market aren't told about the caps until after they sign up for service.

Current contracts for some 125,000 CWA-represented AT&T employees expired April 4, except for an AT&T Southeast agreement, which expires in August. Efforts to bridge the differences between the company and its workers have thus-far failed, with workers authorizing a strike but continuing to work for the time being. Negotiations between AT&T and the Communications Workers Of America took a breather over the Easter holiday, but are set to continue tomorrow. In the interim, workers are getting attention for having created a "Ready To Strike" rap ringtone.

Yesterday it was broadly reported that AT&T is already testing a new system of warning and scolding AT&T customers who have been transmitting pirated material. While the entertainment industry has been pushing ISPs to terminate the service of repeat offenders via some kind of "graduated response" (aka "three strikes) program, AT&T tells us that they're not yet ready to sign off on such an idea.

According to the Communications Workers of America, the union has authorized a strike should contract negotiations not go their way. Current contracts for some 125,000 CWA-represented AT&T employees expire April 4, except for an AT&T Southeast agreement, which expires in August. Citing profits this year of $12.9 billion despite a sour economy, the CWA laments that there's "no reason to hurt employees by cutting jobs and benefits." AT&T and CWA-represented AT&T Mobility workers recently went through the same process.

As AT&T insiders had told us, AT&T this week began offering DirecTV service to customers out of U-Verse range across their entire 22-state footprint. New customers willing to bundle DirecTV get $5 off for the double play, $10 off for the triple play, and $10 off plus $200 cash back if they bundle phone, DirecTV, DSL and wireless phone. Existing customers can supposedly call up and get the bundle discounts (let us know how that works in the comment section below). While AT&T is still supporting Dish Network and Homezone customers, they're no longer marketing those services to new customers.

Last fall AT&T got ample press for reducing the price of their 768kbps DSL Lite tier from $19.95 to $14.95 in Southern markets. Interestingly, nobody bothered to mention that you're already supposed to be able to order that same tier for $10, as a condition (pdf) of the AT&T BellSouth merger.

AT&T CEO Randall Stephenson sent around an e-mail saying that no managers will be seeing raises this year at the company, employees tell Broadband Reports. Stephenson also informed employees that the AT&T board approved his request to give up his own bonus this year, something we've confirmed with AT&T. Earlier this week, the telco also said they'd be delaying the deployment of their U-Verse VDSL service by one year. AT&T isn't alone in cutting back on executive compensation during the recession -- Time Warner Cable recently informed employees they'd be putting a raise freeze in effect for any employees at the VP level or above.

You might recall that AT&T CEO Randall Stephenson made some waves last year when he stated the telecom giant was having trouble finding enough skilled workers to fill the 5,000 customer service jobs it promised to return to the States from India. As of last March, AT&T had only managed to bring back 1,400 of those promised 5,000 jobs, Stephenson blaming the US education system (not cost savings by AT&T) as a major reason why.

2009 will be the year of the femtocell, a tech that creates a micro cell tower in your home that improves coverage and allows you to make calls over your broadband connection (easing strain on local towers is the primary perk for AT&T). AT&T has been testing femtocells in employee homes for some time, and recently stated they'll be engaging in a broader, "city-sized test" with customers in the second quarter of 2009.

User lev writes in to note that AT&T has sent an e-mail to its subscribers (full e-mail below the break) informing them that as of January 31, AT&T Internet users will no longer receiver Flickr Pro accounts. Flickr Pro accounts will be downgraded to regular Flickr accounts -- and all the restrictions that involves -- unless users are willing to pay $24.95 per year to upgrade.

Confirming what many managers were privately worried about back in October, AT&T today announced that the telco will be eliminating 12,000 jobs, or about four percent of the telcom giant's work force. According to an AT&T statement, the layoffs are a result of economic pressures, a changing business mix, and a more streamlined organizational structure. That's code for the economy sucks, the credit market sucks, their landline business is dying, new DSL subscriber additions are dismal, and they continue to purge redundant positions created by the BellSouth merger.

The Beaumont Enterprise is the first to report that AT&T has extended their trials of metered broadband into the Beaumont, Texas market. AT&T began testing metered billing last month in Reno, where DSL customers now face caps ranging from 20GB to 150GB.

A Kansas City jury has ordered AT&T to pay almost $17 million for overcharging customers via the Universal Service Fund (USF). As GAO studies (pdf) have stated for years, the USF is an unaccountable money pit -- where your money goes to carriers, but how and where it's spent (or if it even reaches under-served schools and communities) is never certain. According to the Associated Press, this particular case consolidated dozens of class-action lawsuits filed around the country concerning USF fraud. For their part, AT&T seems happy they weren't found guilty of a broader charge of conspiring with Sprint and MCI to milk customers via the USF:Sprint actually settled their involvement in the case back in September of last year for a cool $30 million.