A Foolish Week of Telecom


AT&T (NYS: T) got a little comeuppance from Moody's (NYS: MCO) this week for what the ratings agency sees as perhaps not keeping its borrowing in check .

Concerned about the carrier's recently announced plans to spend $14 billion over the next three years in capital expenditures, and what it considers "aggressive" share repurchasing, Moody's says it will consider dropping AT&T's rating from its present A2 rating.

A wrist slap
And while we're looking askance at AT&T, let's not forget the $700,000 fine and refund the Federal Communications Commission levied on Ma Bell for switching customers to more expensive plans without asking .

The error was found in 2010, AT&T said, and customers who contacted the carrier were reimbursed. The overcharge could have been as high as $25 to $30 a month, the company said.

Round one to the zapper
DISH Network
(NAS: DISH) can keep using its controversial AutoHop, at least while litigation continues, according to Federal Judge Dolly Gee , who denied Fox Broadcasting's attempt to invoke a preliminary injunction on the commercial-zapping app.

AutoHop automatically skips recording commercials to the satellite TV network's new Hopper HD-DVR. Of course, this made Fox -- a division of News Corp. (NAS: NWSA) -- and other broadcasters hoppin' mad. Fox argued DISH has a "clear goal of violating copyrights and destroying the fundamental underpinnings of the broadcast ecosystem."

Fox said it would appeal.

A new sheriff in town... for now
Samsung's latest top-of-the-line smartphone, the Galaxy S III, outsold Apple's (NAS: AAPL) iPhone 4 in the third quarter, according research firm Strategy Analytics.

Samsung sold 18 million S III handsets compared to 16.2 million iPhone 4S units. However, that didn't include the 6 million iPhone 5 units sold in the quarter. Strategy Analytics said, "We expect the new iPhone 5 to out-ship Samsung's Galaxy S3 in the coming fourth quarter of 2012 and Apple should soon reclaim the title of the world's most popular smartphone model."

Apple loses some Face(Time)
A federal jury in Texas ruled Apple must pay $368.2 million to VirnetX Holding (ASE: VHC) for infringing upon VirnetX's patents for virtual private networks.

Apple uses that technology for its FaceTime functionality in its mobile devices as well as its desktop and laptop computers . Apple argued that FaceTime, which allows users to place video calls between Apple devices, used a different technology than what VirnetX's patents covered.

Microsoft (NAS: MSFT) previously had to pay VirnetX $200 million over the same patent infringements.

Clearing Apple's docket
And in yet another patent-related dustup for Apple -- this one in Wisconsin -- District Judge Barbara Crabb dismissed Apple's lawsuit against Google's (NAS: GOOG) Motorola Mobility unit a few hours before the trial was to begin.

Apple had alleged that Motorola was charging too much for licensing its patents. After Apple told the judge that it would not accept any ruling from her that exceeded $1 per iPhone, she decided just to abandon the trial.

To subsidize, or not to subsidize
For Vodafone's (NAS: VOD) Spanish unit, that has become an easy question. After it decided to stop subsidizing smartphones on an experimental basis earlier this year, it ended up losing 639,000 subscribers for the second quarter.

With those results in, it has decided to stop the hemorrhaging and will reinstate smartphone subsidies.

Scotland's PR problem
The Scottish government has recently put out a tender to buy 300,000 tablet computers for its workers.

The contract is priced out at between $43 million and $95 million, which could buy up to 200,000 iPads at retail prices, or around 300,000 at wholesale rates.

But, as one Scottish government official told The Scotsman, "Most people can't afford an iPad of their own, so they will probably find this step hard to stomach. It looks like a perk ... In terms of PR, it's a bit of major own goal."

One politician thought this was not the way to go.

"I don't think any public money should be spent in this way unless they can show they will save the equivalent amount in printing and paper use. I've not seen anything to suggest they can save [$95 million] in photocopying," said Kezia Dugdale.

I didn't know there was a Luddite party in the U.K.

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The article A Foolish Week of Telecom originally appeared on Fool.com.

Fool contributor Dan Radovsky owns shares of AT&T. The Motley Fool owns shares of Apple, Google, Moody's, and Microsoft. Motley Fool newsletter services recommend Apple, Google, Moody's, Microsoft, AT&T, and Vodafone. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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