Apple is known for innovating in gadgetry. But in business models? AT&T has announced that it and Apple have tossed aside last year's agreement to share revenues on the iPhone. Apple now gets paid upfront, with AT&T selling iPhones at a loss to attract subscribers. The 3G data plan, at $30 a month, is $10 more than the previouse rate — and because AT&T's not sharing that revenue with Apple, AT&T will be making $18 more a month from subscribers, according to estimates of Apple's previous take. AT&T described the deal as "consistent with traditional equipment manufacturer-carrier arrangements." So much for remaking the telecom world. Steve Jobs may have wowed the crowd at the Worldwide Developers Conference with the iPhone's new features. But as far as AT&T is concerned, Apple's nothing special.

One of the reasons that 3G data networks are so fast, especially here in the United States, is that relatively few people use them. However, go to a technology conference where the density of EVDO users reaches a critical mass and suddenly those zippy downloads begin to slow. A room full of iPhone owners frustrated by slowdowns over AT&T's network isn't the customer experience I think Steve Jobs was imagining. [GigaOm]

In a nine-chapter opus, Vanity Fair clean-up hitter Keenan "Coverline" Mayo and Peter Newcomb pitch the inevitable book deal for an oral history of the Internet. In it are all sorts of unchallenged assertions by various leading lights, from early stories of the Arpanet to Friendster founder Jonathan Abrams complaining about getting friend invites from "Pounce" when he's not taking undue credit for building the first social network. (Six Degrees, anyone?) But what stood out to me were two anecdotes that illustrate the plus ça change, plus c'est la même chose nature of business in America. Namely, the cycle of monopolies which the Internet has done little to stop and will probably spin Google's way next. After the jump, 100 words that changed the world — without the pleasantly distracting Angelina Jolie pop-up ads spewed by the Vanity Fair website.

With the purchase of a $5 gift card, or by entering your personal information in the company's database for a rewards program, Starbucks will allow you to sip on two hours of free Wi-Fi from AT&T at stores. The Seattle-based fast food chain may be one of the first to be hit by any economic downturn as Americans cut back on the affordable luxury of $4 caffeinated drinks and spend that money at competitors like McDonald's. One look at the stock's performance over the last year, down over 30 percent, and you can see why CEO Howard Schultz would look to freebies like Wi-Fi to keep the company's Frappucino^TM junkies coming back. As our very special correspondent once put it, "Wi-Fi isn't a luxury or even a commodity. It's a condiment."

An Akimbo employee detailed the twists and turns in strategy at the now dead startup, mostly from the point at which Tom Frank (pictured) took over as CEO. Frank stalled development on content for investor AT&T, killed a product a month after it was shipped to Novato-based Sonic, switched products on client CenturyTel with two months notice, then decided they needed to acquire Canadian startup iWave's software. Only after founder Jim Funk left, along with legions of engineers, did executives decide to resuscitate tech built in-house. The nail in the coffin?

Akimbo, the online video company that just laid off most of the staff, has finally closed its doors. Its failure comes only months after a fresh infusion of $8 million from investors, including AT&T. The telco giant was looking for Akimbo's content to fill out the company's HomeZone TV offering. Only problem? Akimbo lost all its content licensing deals, according to a tipster. [VentureBeat]

What makes Netflix's new living-room box for Internet video downloads different from all the other set-top flops? Everything. The price is low: At $99, it's much cheaper than the $229 Apple TV. It connects to regular TVs as well as HDTVs, and can stream video in variable quality depending on your Internet connection speed. And you can eat all you want from the buffet of available titles on Netflix, with movies available online that happen to be in your Netflix queue already lined up and ready to go. Hardware partner Roku has introduced it with a chipset that other manufacturers can license, and Netflix has a huge domestic subscriber base as potential customers. So what three things could doom this product to the same fate as every other Internet-video set-top?

Yesterday AT&T added language to its website that promised iPhone subscribers free Wi-Fi hotspot access to the company's listing of features for customers. A few hours later, the offer was removed from the site. The rollout for free Wi-Fi for iPhone subscribers on AT&T's network isn't going so smoothly — after the unannounced program was discovered, hackers shortly discovered they could log any device onto the network quite easily. (Photo from Jajah)

AT&T and as many as 15 other big phone companies are planning to launch a rival to Skype in 2009. Why don't they just buy it from eBay? That seems easier. [GigaOm]

AT&T meant to make Wi-Fi free only for iPhone users. But a hack made it free for laptop users at Starbucks and other network points controlled by AT&T. The free Wi-Fi has now been disabled. Guess the hoi polloi stealing bandwidth ruined it for iPhone owners. [Gizmodo]

AT&T is offering iPhone owners free Wi-Fi at hotspots managed by the company, including those at megachain Starbucks. But all the system checks is the user-agent string supplied by the iPhone's Safari browser and a phone number from a working iPhone. So anyone with a laptop can simply change their browser's user-agent string, put in the phone number of a friend with an iPhone, et voila! Free Wi-Fi. Why you won't get? The phone number of the cute barista you've been flirting with in vain. (Via Slashdot, photo by Synthesis Studios)

Head honcho of the federales, Robert Mueller, let his fantasies run wild in hearings held by the House of Representatives' Judiciary Committee on Wednesday:

Why is an AT&T lawyer peddling scare stories about the Internet running out of capacity by 2010? To frighten lawmakers. Jim Cicconi, AT&T's vice president of legislative affairs, surely doesn't believe that "in three years' time, 20 typical households will generate more traffic than the entire Internet today," as he told Westminster eForum attendees in London. It's just a line that sounds good.

Lobbying pays: AT&T has donated $200,000 to Congressmen Cliff Stearns and Fred Upton (pictured), as well as John Shimkus. All three are members of a House telecommunications subcommittee, and have criticized Google's participation in an FCC auction of wireless spectrum. They claim the government would have made more money had Google not lobbied for rules that lift restrictions on what kind of devices can use the spectrum, smoothing the way for the launch of "Googlephones" which run Google's Android software. All of which would be less of a theoretical inside-the-Beltway debate if Google actually had a Googlephone on the market.

"Is Faster Access to the Internet Needed?" Time Warner and AT&T say normal people don't need the Internet any faster than it is now, while Verizon and Comcast say "Um, OMG yes they do." Of course they do! Faster Internet means normal people will watch TV online, for one. But I'm abnormal; I spend over 12 hours a day online. I'm sure you have other examples. [Wall Street Journal]

Free directory assistance has a price after all: $175 million. That's the price we hear Jingle Networks is trying to get for its 1-800-FREE-411 service, which gives free business listings in exchange for playing ads. Google, Microsoft, and AT&T are all preparing bids. But a source who has looked at Jingle's numbers say it will be lucky to get full price: "It's maybe worth $90 million." By late 2006, Jingle had raised $60 million; we hear it's since blown through that, and taken on debt besides.

The big winner in the U.S. government's recent wireless-spectrum auction was Verizon, having spent at least $4.7 billion and as much as $10 billion to acquire licenses nationwide. AT&T was the next highest bidder, with satellite broadcaster EchoStar the biggest of the new kids. Verizon unveiled plans to open up its wireless network to third parties yesterday, likely in anticipation of today's announcement. I have to agree with VentureBeat's MG Siegler — the real winner here is Google, which didn't have to pay a dime, but changed the terms of the contract for the eventual winner just by entering a lowball bid. Well played, Google, well played. (Photo AP/Don Ryan)

The FCC's auction of the 700MHz spectrum, soon to be abandoned by analog television broadcasters, is over. Bids totaled $19.6 billion for licenses across the country. But it may be weeks until the winners are announced publicly. Among the big bidders, AT&T and Verizon are the most likely, and the most boring. Google tried to shape the debate over access to the spectrum with a promised bid, and have been acquiring infrastructure over the years. And there's a chance an unknown or three might make a splash. Valleywag is, of course, all ears at tips@valleywag.com.

Accel partner Jim Breyer and Venrock's David Siminoff plan to take money from Hollywood talent agency William Morris and AT&T to form a new fund, according to the New York Times. It will be financed with "tens of millions of dollars" and looks to invest as little as $250,000 in digital-media startups based in Southern California.