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Apple, AT&T Defend The Network

Chief executives Randall Stephenson of AT&T and Apple's Steve Jobs of Apple say they aren't worried about criticism of the 2G Edge network that Apple's iPhone will run on. The executives defend that decision as being the best one for both companies, given the current state of the mobile wireless industry.

Interestingly, it's AT&T's Stephenson who touts the device's ability to tap into other, higher speed networks, such as Wi-Fi hotspots: "I got to tell you, carrying this thing around and experiencing those kinds of speeds on a wireless handset, your imagination begins to run in terms of what's possible," Stephenson said, adding, "by the way, there's not a 3G network available in Ottumwa, Iowa," meaning: "If you want to sell these devices in a variety of places, Edge is the only opportunity you have," he said.

And that's precisely Apple and AT&T's gamble-that the iPhone, even at $500-$600 a pop, will appeal to more than just early adopters. Meanwhile, the telecom giant has invested $16 billion into its network over the past two years to meet increased demand from wireless users. "Capacity won't be an issue," Stephenson says.

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