While Apple's iPhone sales continue to succeed, things just aren't looking any better for AT&T's network woes, and their dysfunctional relationship has given birth to a second lawsuit.

Several iPhone users on Wednesday morning reported a complete outage of

AT&T's data service. Reports have surfaced in

Boston, Chicago, Washington DC and St. Louis; users have claimed in the Apple support forums that a call to AT&T's support line confirms the outage. AT&T's Brad Mays confirmed a "routing issue" in the Northeast region affecting wireless data in the early morning. He said technicians restored the service by about noon EDT.

The reports of a network outage work to the advantage of customer William Gillis, who filed a lawsuit late last week. In his 18-page complaint, Gillis – a retired Chicken of the Sea executive – alleges that AT&T's network is not strong enough to support the millions of iPhone 3G users, and therefore the handset is not performing as advertised, according to Michael Ian Rott, Gill's attorney.

"The bottom line is iPhone 3G users are not getting what has been represented to them," Rott said in a phone interview. "[The iPhone 3G] is kind of like a Dragster: A Dragster can go 500 miles an hour, but you only have a short amount of track space so you'll never reach that 500 miles per hour.... Similarly the 3G iPhone isn't working to the specifications Apple represented."

Gillis's hypothesis of 3G networks being strained coincides with observations made in Wired.com's recent study conducted on iPhone 3G download speeds around the world, in which we discovered network performance varied greatly based on carriers and countries. Users reported the fastest 3G download speeds in Europe, which possesses some of the most mature 3G networks that have been developed since 2001. By contrast, AT&T's U.S. 3G network is relatively young, having been introduced in 2004.

Before today's reported outage and Gillis's lawsuit, femtocell developer Dave Nowicki also theorized that in the United States, the iPhone 3G is straining AT&T's young

3G network. He explained that AT&T installed the 3G cells on preexisting EDGE transmission towers – meaning those towers were spaced based on the requirements of earlier, 2G technology, which has a longer effective range than 3G.

User complaints about the 3G network have been passionate and widespread ever since the iPhone 3G's July 11 launch. The problems have varied from slower-than-advertised 3G performance to getting no 3G connection at all.

Alabama resident Jessica Alena Smith was the first customer angry enough to file a lawsuit, alleging false advertising on Apple's part for touting the handset as "twice as fast for half the price" compared to the original iPhone. Smith claims in her complaint that the handset's network performance is grindingly slow and only stays on the

3G network 25 percent of the time.

Apple's public relations department has said recently that the latest iPhone software update – 2.0.2 – would improve 3G performance, but very few user reports have backed the company's claims.

Regardless of what's said about 3G performance, Apple is continuing to ride the high tide with the iPhone's popularity. Insiders have said the

corporation plans to produce 40 to 45 million more iPhone 3Gs in the next year.

Updated 12:20 p.m. PDT with a quote from Gillis's lawyer and additional background information.

(Photo credit: magerleagues/Flickr)

Also see:

**