Bits Blog: Verizon to Release First Transparency Report

AT&T and Verizon Pressed to Detail Roles in U.S. Surveillance Efforts

Two separate but similar shareholder resolutions, from New York State’s comptroller and a large investment firm, say that the two dominant wireless carriers hurt customers’ trust by not disclosing more about the data they share with governments. The resolutions are the latest sign that the flurry of revelations about American spying efforts is putting business pressure on the companies lassoed into providing customer data to the government.

“If a customer is concerned about their privacy perhaps being compromised, they could switch to another service,” said Thomas P. DiNapoli, New York’s comptroller, the trustee of the $160.7 billion New York State Common Retirement Fund. He filed a resolution with AT&T this month demanding that the carrier publish reports on the information it collects and shares.

AT&T and Verizon Wireless, which juggle enormous amounts of phone calls and Internet data over their networks, have been quiet about the types of information they share about their customers. Internet giants like Yahoo and Google, meanwhile, have published so-called transparency reports detailing the types of information they share with government agencies.

Some tech companies, including Microsoft and Apple, have also been outspoken about their desire to release more information on government requests, including how many orders they receive to disclose the contents of email and other communications.

The comptroller and Trillium Asset Management, an independent investment adviser with over $1.3 billion in assets under management, are pushing for similar disclosure from AT&T and Verizon. They say their investments in AT&T and Verizon are at stake because a lack of trust could make customers look for other service providers.

Trillium, which describes itself as a leader in shareholder advocacy, filed its resolution with Verizon Communications this month. “Transparency is essential if individuals and businesses are to make informed decisions regarding their data,” Trillium wrote in its proposal.

Some analysts and American tech executives are also worried that the spying revelations will hurt profits. Many analysts have predicted the government’s actions would especially hurt companies with major business cloud computing services, which have been a particular target of the spying efforts. Cisco recently attributed a decline in sales in China partly to hostility toward American companies.

In the last several months, AT&T and Verizon have come under scrutiny for their cooperation with government surveillance programs. A court order revealed that the Obama administration secretly collected records for calls made between the United States and abroad, as well as calls within the United States. This month, it was revealed that the Central Intelligence Agency paid AT&T $10 million a year for access to its enormous database of phone records, including Americans’ international phone calls.

Historically, there are stronger laws protecting phone information than Internet traffic, said Harold Feld, senior vice president for Public Knowledge, a nonprofit group that focuses on information policy. That is why government requests for phone information is limited to so-called metadata like the name of a caller, the time the call was made and the recipient of the call, as opposed to tapping the phones, he said.

Compared with tech companies, the American carriers have had a closer working relationship with the government. They provide communications services to the American government. And unlike Internet companies like Google and Yahoo, which have global operations, the carriers have less at stake overseas, where foreign customers might be angry about the revelations of American surveillance.

The carriers also work with regulators to obtain spectrum licenses to operate their networks, so it benefits them to get along, Mr. Feld said. “From an economic perspective they have less incentive to fight” pressure from the government, he said. “The carriers have wanted to stay on the good side.”

Bob Varettoni, a Verizon spokesman, confirmed receiving Trillium’s proposal, but declined to comment on the topic of government requests. “We’ve received the proposal and we’re currently evaluating it,” he said.

Mark Siegel, an AT&T spokesman, said, “As standard practice we look carefully at all shareholder proposals but at this point in the process we do not expect to comment on them.”

It may be difficult for the shareholders to convince AT&T and Verizon, the two biggest American carriers, that they will lose customers because of a lack of trust. In general, very few customers leave those networks. At AT&T, for example, churn, the rate at which subscribers leave, was 1.07 percent in the third quarter, compared with 1.08 percent in the same quarter a year ago. Many customers are subscribed to family plans or corporate accounts, making it tricky to switch devices to a different carrier.

But Trillium believes an enormous amount of money is at stake. It cited the Information Technology and Innovation Foundation, which estimates that controversy around surveillance programs could cost the information technology industry at least $21 billion in business over the next three years if foreign customers lose trust in American companies.

Both resolutions may be voted on at shareholder meetings in the spring.

Mr. DiNapoli said privacy was a relatively new issue for AT&T and eventually may become a factor for customers when they choose a provider. “I certainly think there’s a heightened sensitivity that could redirect and reinform consumer behavior,” he said.

This article has been revised to reflect the following correction:

Correction: November 20, 2013

An earlier version of this article included an incomplete reference regarding a resolution filed by Trillium Asset Management. It was filed with Verizon Communications, the parent company of Verizon Wireless.

Verizon Backing Off Plans for Wireless Home Phones

After Hurricane Sandy, Verizon asked state regulators in New York for permission to substitute Voice Link, a home phone service that carries calls on a cellular network, for what it refers to as “plain old telephone service.” The first place in the state it tried broad use of Voice Link was on the west end of Fire Island, a resort community on the Atlantic Ocean that incurred heavy damage in the late October storm.

Verizon had hoped to use Fire Island as an example of how Voice Link could be installed in other areas of the state where its network of copper wires was damaged by storms or deemed too costly to repair or maintain. The regulators said they would monitor the results and decide later this year.

But Verizon did not wait for the final results. It conceded defeat this week and said it would start laying fiber-optic cable that would restore home phone service and Internet access.

Edward P. Romaine, the supervisor of the town of Brookhaven, said he was “delighted” that Verizon had been “forced into” offering an alternative to Voice Link. “I dare say there are very few residents of Fire Island that would prefer Voice Link,” he said.

The company also withdrew its request to the state Public Service Commission for permission to use Voice Link as a permanent substitute for traditional home phone service elsewhere in the state.

“What we’re basically telling the commission is we’re not going to pursue the stuff that we were pursuing,” said Tom Maguire, Verizon’s senior vice president for national operations support. “We’re going to go back to the day before Sandy.”

The Voice Link experiment was watched closely by consumer advocates because it was seen as a test of the obligations that traditional phone-service providers have to their customers. The advocates fear that acceptance of Voice Link will give Verizon an incentive to neglect its copper lines, which are expensive to maintain.

Verizon and AT&T have told federal and state regulators that the demise of “plain old” phone service is inevitable, as more Americans rely on cellphones and demand faster Internet connections than copper wires can provide.

Indeed, Verizon is not abandoning Voice Link. The company intends to continue offering it as a substitute for traditional service in Mantoloking, N.J., and other communities that have been hit hard by storms.

Some Mantoloking residents have complained about Verizon’s decision not to restore their old phone lines after Hurricane Sandy wreaked havoc there. But the company said that people in Mantoloking, unlike the residents of Fire Island, have an alternative: they can get phone service and Internet access from Comcast, the local cable provider.

That answer did not satisfy Stefanie A. Brand, the director for the Division of Rate Counsel in New Jersey. A representative of utility consumers, Ms. Brand said Mantoloking residents should not have to buy a bundled service from the cable company to get home phone service that is not wireless.

“Verizon is the provider of last resort in New Jersey,” Ms. Brand said, “so they have to offer customers a basic telephone service option, and there is no telephone service option available to the customers in Mantoloking.”

AARP has called on the Federal Communications Commission and New Jersey’s Board of Public Utilities to investigate Verizon’s use of Voice Link in Mantoloking. The organization argued that dependable, regulated phone service is a “lifeline” for residents, especially older ones, when a storm like Hurricane Sandy hits.

Jim Dieterle, the state director for AARP in New Jersey, called Voice Link a “third-rate” alternative. He said state officials should not accept less than what Verizon is doing on Fire Island. “Why would they do one thing in New York and then not in New Jersey? We’re not second-class citizens,” he said. “I don’t think our governor would appreciate being treated in a less admirable way.”

DealBook: Verizon Is Expected to Pay $130 Billion for Stake in Vodafone Joint Venture

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DealBook: Verizon in Talks to Buy Vodafone’s Stake in Its Wireless Unit

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Bits Blog: Flares in Canada at the Thought of Verizon

At Verizon, Wireless Aids Earnings Rise

A surge in wireless subscribers and smartphone sales, combined with more subscribers to its digital TV and Internet services, propelled the company to a profit of $2.25 billion in the second quarter, up 23 percent from the same period a year earlier.

Verizon, which is based in New York, said investment in its fourth-generation wireless network, called LTE, helped its growth. For its wireless business, the company added 941,000 contract subscribers, the most valuable type of customer.

The company also reported improved smartphone sales, partly on the back of demand for the iPhone. In the quarter, Verizon sold 7.5 million smartphones, including 3.9 million iPhones. In the year-ago quarter it sold 5.9 million smartphones, including 2.7 million iPhones.

Like other wireless carriers, though, Verizon appears to be keeping an eye on industry data showing that fewer people are upgrading to new smartphones year after year. To combat that trend, two of its top competitors, AT&T and T-Mobile USA, recently announced plans that would make it cheaper for customers to upgrade their phones before the typical two-year wait.

On Thursday, Verizon, the No. 1 wireless carrier, announced a similar plan. Verizon’s program, called Edge, will allow customers to pick the phone they want and then sign up for a monthly payment plan. The full price of the phone will be spread over 24 months. The customer can upgrade in as little as six months by paying off 50 percent of the original phone by then.

“Our customers have been asking for another option,” said Francis J. Shammo, Verizon’s chief financial officer, on the company’s earnings call. He said some people did not want to wait two years before buying a new smartphone.

But Verizon’s early-upgrade plan appears likely to attract only a small portion of the market, the high-spenders who must have the latest and greatest smartphones. Craig Moffett, an analyst at Moffett Research, said that plan was unlikely to add much to the company’s profits. But Verizon’s move, he said, shows that it is reacting to T-Mobile, the fourth-largest American carrier, which was the first carrier to introduce early-upgrade plans.

“I think T-Mobile’s plan is taking share, and they have to do something about it,” he said.

Over all, Verizon’s revenue rose 4.3 percent, to $29.8 billion, compared with the same quarter a year ago. The company’s net income was 78 cents a share, compared with 64 cents a share in the period a year ago. After excluding a one-time gain related to pension benefits, Verizon’s net income was 73 cents a share, beating analyst expectations of 72 cents, according to data from Thomson Reuters. Shares of the company were down 1.5 percent to close at $49.97 on Thursday.

Verizon is planning to invest even more money in the 4G network. It said it would increase capital spending this year to between $16.4 billion and $16.6 billion, an increase from its original plan to spend $16.2 billion.

The company also said that it added 161,000 subscribers to its Internet service and 140,000 to its video service. Verizon’s Internet service now has 5.8 million subscribers and its video service has 5 million.

F.C.C. Is Told Verizon Underpaid Data Refunds

The lawyer, Arthur V. Belendiuk, of Washington, said in a petition for investigation that Verizon and F.C.C. documents obtained through a Freedom of Information request contained evidence indicating that the company might have taken $240 million or more from the false charges, more than four times the almost $53 million it agreed to refund.

A Verizon spokesman, Torod B. Neptune, said that the allegations were without merit, and declined to comment further. F.C.C. officials and the Office of the Inspector General declined to comment.

The Verizon charges came to light in 2009 in articles in the Cleveland Plain-Dealer and The New York Times.

Thousands of Verizon Wireless customers had been complaining about mysterious $1.99 data charges on their cellphone bills. The customers said they had not used the Internet connection function on their phones; some demonstrated to Verizon employees that the charges had occurred randomly, often when the phone was turned off or the battery removed, and at times on accounts that did not have a phone capable of connecting to the Internet.

The F.C.C.’s enforcement bureau investigated and in October 2010 reached a consent decree with Verizon. The company agreed to pay $52.8 million in refunds to customers and a payment of $25 million to the United States Treasury to end the investigation. At the time, it was the largest such payment in F.C.C. history, the agency said.

The F.C.C. found that about 15 million pay-as-you-go customers could have been affected by the false charges over a period of about 30 months.

“Today’s consent decree sends a clear message to American consumers: the F.C.C. has your back,” Julius Genachowski, then the F.C.C. chairman, said on Oct. 28, 2010. “Today’s settlement also includes strong F.C.C. oversight and accountability to ensure that Verizon Wireless fully repays what they owe to their customers and puts new measures in place to improve customer service.”

Mr. Belendiuk, who frequently represents television stations and broadcasters before the F.C.C., said the documents produced by Verizon in the investigation indicated that in trying to assess how to fix the problem, the company’s proposed solutions would cost it $8 million to $10 million a month.

The documents, Mr. Belendiuk said in his petition, indicated that when the company put in place a fix for the flaw, “Verizon’s $1.99 data charge revenues dropped by approximately $8 million per month.”

Mr. Belendiuk said he had filed the Freedom of Information request and the petition on his own behalf and not for a client, and that he was interested in the case from the time it was disclosed. The settlement itself, as a precedent, “makes a difference for me as an attorney, in knowing how to advise my clients,” he said.

Bits Blog: Verizon Wireless Chief Sees Hope for New BlackBerry Phones

Jessica Rinaldi/Reuters Dan Mead, president and chief executive of Verizon Wireless.

BlackBerry’s phones have been off to a weak start in Canada, the home turf of the struggling handset maker. But the new BlackBerrys are getting a warm welcome from Verizon Wireless, the biggest American carrier.

Dan Mead, chief executive of Verizon Wireless, cheered on the new BlackBerry phones at an investor conference on Wednesday morning. He said Verizon Wireless customers are especially interested in the new BlackBerry phone that includes a physical keyboard, called the Q10 (the Q stands for “qwerty”), which has yet to be released on the Verizon network.

BlackBerry’s new touch-screen smartphone, the Z10, has already turned in strong sales for Verizon, according to a recent analysis.

“We think that there is an important place for BlackBerry,” Mr. Mead said at the Jefferies 2013 Global Technology Media and Telecom Conference. “We have a lot of BlackBerry customers on our network. There seems to be a hunger for the qwerty keyboard.”

Mr. Mead said BlackBerry added diversity to the handset market, which was good for the industry and for Verizon. Last quarter, 4 million of the 7.2 million smartphones sold by Verizon were iPhones.

Wireless Lifts Profit at Verizon

For Verizon, the top American phone carrier, prolonged success is good news in the telecommunications industry, a business that is adding customers more slowly now because most people who want a cellphone already have one.

Investors in the company are probably especially happy that even though Verizon has gradually raised prices of phone plans while eliminating unlimited data over the last few years, customers have been willing to spend more on their monthly bills.

“It’s just amazing that the average revenue per account keeps growing,” said Tero Kuittinen, a telecom analyst at Alekstra, a mobile diagnostics firm. He said it was impressive that Verizon continued to squeeze more money from each customer, because its newest subscribers were “low-quality” customers — budget-conscious people who held out for many years on buying smartphones.

In its earnings call, Verizon said net income in the first quarter rose 15.8 percent to $1.95 billion, or 68 cents a share, from the same quarter a year earlier, while revenue climbed 4.2 percent to $29.4 billion.

The company, based in New York, said its wireless business earned significant revenue because of strong sales of smartphones, as well as the popularity of its shared-data subscription plans, which are more expensive for individuals but can be cost-effective for families with multiple devices.

Total revenue for wireless was $19.5 billion, up 6.8 percent from last year. The company activated 7.2 million smartphones over the quarter, and its shared-data plans helped increase revenue per account to $150.27 a month, up 6.9 percent from last year. Four million of the smartphones sold were Apple’s iPhones.

Verizon also continues to expand its customer base, while its competitors have experienced a slowdown in subscriber additions. It added 677,000 contract subscribers, the most valuable type of customer, up 35 percent from last year.

“Through solid execution of our strategy, the wireless results speak for themselves,” Francis J. Shammo, chief financial officer of Verizon, said on the earnings call.

Verizon to Pay $250 Million to TiVo in Patent Settlement

TiVo has turned to litigation to generate revenue from licensing fees as it struggles with competition from low-cost rivals.

Analysts said the settlement could bode well for a TiVo victory in cases against other companies, including Time Warner Cable and Motorola Mobility, which is now owned by Google. TiVo reached a similar deal in January with AT&T, which agreed to pay $215 million.

TiVo also prevailed in a similar case against Dish Network and EchoStar in May 2011. Verizon declined to comment and referred questions to TiVo.

Regarding the continuing legal cases, “Verizon has set a strong precedent for Motorola to settle,” said Todd Mitchell, an analyst at Brean Murray, Carret, a boutique investment bank.

TiVo sued Time Warner Cable in connection with the Motorola litigation, and Monday’s settlement only improves the company’s position, according to Barton Crocket, an analyst at Lazard Capital Markets.

“It also potentially sets the stage for a similar settlement with Time Warner Cable over the next year or so,” Mr. Crockett said.

Time Warner Cable declined to comment on Monday. Motorola Mobility had no immediate comment.

TiVo said Verizon would initially pay $100 million in cash, and recurring quarterly payments totaling $150.4 million through July 2018.

As part of the deal, the companies were discussing having TiVo boxes carry a new Internet video streaming service that Verizon is developing with Coinstar’s Redbox to compete with Netflix. TiVo’s DVRs already feature video services from Netflix and Amazon.com.

In addition to the guaranteed compensation, Verizon will pay TiVo license fees on a monthly basis through July 2018 for each Verizon DVR subscriber above a certain number.

If Verizon and TiVo pursue “certain commercial initiatives” by Dec. 21, up to $29.4 million of the payments made by Verizon would be subject to a credit of an equal amount, TiVo said.

This appears to refer to a nonexclusive deal for Verizon to offer TiVo boxes to customers, according to Mr. Mitchell of Brean Murray.

The companies also agreed to dismiss all pending litigation between them.

4-Year Deals for Unions at Verizon

The contracts, covering workers from Maine to Virginia in Verizon’s landlines division, come after 16 months of tense negotiations that included a two-week strike a year ago to protest the company’s demands for concessions. A ratification vote is expected in the next month.

At a time when many unions are facing demands for pay and pension freezes, Verizon’s main unions — the Communications Workers of America and the International Brotherhood of Electrical Workers — were able to preserve the current pension plan for existing workers.

But the unions did agree that future hires covered by the contracts would no longer receive traditional pensions and would instead have 401(k) accounts with a substantial company match.

The agreements, effective Aug. 1, 2011, to Aug. 1, 2015, include an $800 ratification bonus for those covered: field technicians, call center workers and cable installers.

Larry Cohen, president of the communications workers, criticized what he said was Verizon’s hard-line approach, coming when the company had $2.4 billion in net income in 2011 on revenue of $110 billion.

Mr. Cohen said that while some unions have lost ground in concessionary contracts, “we’ve maintained our living standards in this contract.”

“Because of what’s going on in America, every employer, regardless of its financial wherewithal, believes it’s obligated to cut the costs of front-line employees,” Mr. Cohen said. “But we held our own. This is an incredibly profitable company, and the reality of today in America is if you hold your own, that’s a victory.”

Verizon issued a statement praising the deal. “We believe this is a fair and balanced agreement that is good for our employees as well as for the future of the wireline business,” said Marc C. Reed, Verizon’s chief administrative officer. “It provides competitive wages, valuable benefits and affordable quality health care while giving the company new flexibility to better serve customers and become more efficient.”

The contracts cover workers in Verizon’s traditional landlines operation and its new FiOS Internet and cable operations, but only a handful of workers at Verizon Wireless, the highly profitable cellphone joint venture that is largely nonunion and in which Verizon Communications is the majority shareholder.

Verizon originally pushed for a pension freeze for current workers, significantly higher employee contributions for health coverage, an end to all job security provisions and freedom to do as much outsourcing as it wanted.

As part of the deal, union officials said, the company will maintain the same level of health coverage and the workers will pay 20 percent of their overall health coverage costs, roughly double the old percentage. That provision is expected to increase out-of-pocket health care costs for family coverage by more than $1,000 a year.

Verizon has repeatedly argued that it needed many concessions as a way to reduce costs in its landline business because that division’s consumer base and profit margins have shrunk over the last 10 years. Many customers have dropped fixed-line phones and turned to competing options like mobile phones, cable and Internet calling.

In defending the demand for givebacks, Verizon’s chief executive, Lowell C. McAdam, wrote in a letter to employees last year, “The existing contract provisions, negotiated initially when Verizon was under far less competitive pressure, are not in line with the economic realities of business today.”

Union leaders said the tentative settlement enabled them to preserve most job security protections and still limit some outsourcing, although some union members could be transferred into different Verizon jobs.

Union officials said the raises would total $5,500 over the life of the four-year contracts. They said the typical Verizon union member earns $70,000 a year before overtime.

For future hires under the tentative agreements, Verizon would provide a dollar-for-dollar match in 401(k) contributions up to the first 6 percent of pay, and then, depending on the company’s performance, it might add as much as 3 percent more in profit-sharing. Union officials said Verizon also agreed to reinstate 37 workers it had fired after accusing them of misconduct during the 2011 strike.

The two unions called their members back after two weeks of striking even though there was no agreement partly because union leaders saw how dug in Verizon had become and partly because they said Verizon had finally agreed to focus on the major issues in the negotiations.

Under the settlement, there is no raise for the first year of the contract, which has already passed, a 2.25 percent raise in the second year, 2.75 percent in the third year and 3 percent in the fourth year.

The two unions cited Gov. Andrew Cuomo of New York and George Cohen, director of the Federal Mediation and Conciliation Service, for their work over the last two months in helping to reach the deal.

This article has been revised to reflect the following correction:

Correction: September 19, 2012

An earlier version of this article gave Verizon’s net income in 2011 as $10.2 billion. The actual figure is $2.4 billion. The $10.2 billion figure includes  profits attributable to Vodafone, which owns a 45 percent share of Verizon Wireless.

Bits Blog: Why the iPhone 5 on Verizon and Sprint Won't Juggle Calls and Data

Justin Sullivan/Getty Images

A lot has changed in Apple’s new iPhone. But with the Verizon Wireless and Sprint versions of the iPhone 5, there’s something that will remain the same from the old model: The phone still won’t be able to place a call and handle data activity over the cellular network at the same time.

Older Verizon and Sprint smartphones on 3G networks were not able to handle simultaneous calls and data because of a limitation in CDMA, the 3G technology that those networks use. But now some Verizon 4G LTE smartphones will let you stay on a phone call while looking up something in an app or checking e-mail. So why not the iPhone 5?

Brenda Raney, a Verizon Wireless spokeswoman, said it was Apple’s decision to design the iPhone 5 so that customers could make voice calls and do Internet activity simultaneously only over Wi-Fi, not over Verizon’s cell network. “The iPhone 5 is designed to allow customers to make voice calls on the Verizon Wireless network and surf the Web on Wi-Fi,” she said in an e-mail. “It was an Apple decision.”

The explanation for this, it turns out, is complicated. The technology in 4G LTE networks does not currently handle voice transmissions; it only does data. So when you place a phone call on a 4G LTE smartphone, it’s actually rolling back to the carrier’s older second- or third-generation network, according to AnandTech, a Web publication that does deep analysis on hardware.

That means when AT&T customers place a phone call and use data on the iPhone 5, both functions will roll back to AT&T’s older network, which can handle them simultaneously. When you place a phone call while using data in an app with a Verizon or Sprint iPhone 5, it will roll back to their older CDMA networks, which are not capable of simultaneously doing calls and data. And that’s why the iPhone 5 on Verizon and Sprint, despite being a 4G LTE device, will still not do both at the same time.

An Apple spokeswoman, Natalie Kerris, put it this way: “iPhone 5 supports simultaneous voice and data on GSM-based 3G and LTE networks. It is not yet possible to do simultaneous voice and data on networks that use CDMA for voice and LTE for data in a single radio design.”

So why does Verizon’s Samsung Galaxy S III, a 4G LTE phone, juggle calls and data? Samsung added an extra antenna so that it pulls data from the 4G LTE network at the same time that it’s using another antenna to do voice, said Anand Shimpi, editor in chief of AnandTech.

Then why didn’t Apple add another antenna? Its phone already has two antennas in an effort to improve reception, and it would have had to add a third antenna just for Verizon and Sprint phones to give them simultaneous data and calls, Mr. Shimpi explained. Leaving that third antenna out allows Apple to simplify the process of manufacturing the iPhone for multiple carriers. Plus, in the next two years, 4G LTE technology is supposed to evolve to support voice calls, which would render another antenna unnecessary.

Whew! Despite that explanation, the ability to do calls and data at the same time was one of the major things that AT&T’s iPhone customers had that Verizon’s and Sprint’s didn’t. And for now, that story remains the same with the iPhone 5 — which may be a consideration for customers considering a new phone on those networks.

Bits Blog: Why the iPhone 5 on Verizon and Sprint Won't Juggle Calls and Data

Justin Sullivan/Getty Images

A lot has changed in Apple’s new iPhone. But with the Verizon Wireless and Sprint versions of the iPhone 5, there’s something that will remain the same from the old model: The phone still won’t be able to place a call and handle data activity over the cellular network at the same time.

Older Verizon and Sprint smartphones on 3G networks were not able to handle simultaneous calls and data because of a limitation in CDMA, the 3G technology that those networks use. But now some Verizon 4G LTE smartphones will let you stay on a phone call while looking up something in an app or checking e-mail. So why not the iPhone 5?

Brenda Raney, a Verizon Wireless spokeswoman, said it was Apple’s decision to design the iPhone 5 so that customers could make voice calls and do Internet activity simultaneously only over Wi-Fi, not over Verizon’s cell network. “The iPhone 5 is designed to allow customers to make voice calls on the Verizon Wireless network and surf the Web on Wi-Fi,” she said in an e-mail. “It was an Apple decision.”

The explanation for this, it turns out, is complicated. The technology in 4G LTE networks does not currently handle voice transmissions; it only does data. So when you place a phone call on a 4G LTE smartphone, it’s actually rolling back to the carrier’s older second- or third-generation network, according to AnandTech, a Web publication that does deep analysis on hardware.

That means when AT&T customers place a phone call and use data on the iPhone 5, both functions will roll back to AT&T’s older network, which can handle them simultaneously. When you place a phone call while using data in an app with a Verizon or Sprint iPhone 5, it will roll back to their older CDMA networks, which are not capable of simultaneously doing calls and data. And that’s why the iPhone 5 on Verizon and Sprint, despite being a 4G LTE device, will still not do both at the same time.

An Apple spokeswoman, Natalie Kerris, put it this way: “iPhone 5 supports simultaneous voice and data on GSM-based 3G and LTE networks. It is not yet possible to do simultaneous voice and data on networks that use CDMA for voice and LTE for data in a single radio design.”

So why does Verizon’s Samsung Galaxy S III, a 4G LTE phone, juggle calls and data? Samsung added an extra antenna so that it pulls data from the 4G LTE network at the same time that it’s using another antenna to do voice, said Anand Shimpi, editor in chief of AnandTech.

Then why didn’t Apple add another antenna? Its phone already has two antennas in an effort to improve reception, and it would have had to add a third antenna just for Verizon and Sprint phones to give them simultaneous data and calls, Mr. Shimpi explained. Leaving that third antenna out allows Apple to simplify the process of manufacturing the iPhone for multiple carriers. Plus, in the next two years, 4G LTE technology is supposed to evolve to support voice calls, which would render another antenna unnecessary.

Whew! Despite that explanation, the ability to do calls and data at the same time was one of the major things that AT&T’s iPhone customers had that Verizon’s and Sprint’s didn’t. And for now, that story remains the same with the iPhone 5 — which may be a consideration for customers considering a new phone on those networks.