AT&T has dropped its lawsuit against Verizon Wireless over its 3G coverage ads, according to court documents filed this morning in an Atlanta U.S. District Court.

In a document filed by AT&T attorneys, the lawsuit was “dismissed without prejudice.”

AT&T filed the lawsuit in early November over Verizon ads that negatively depicted its nationwide 3G coverage. AT&T alleged that the ads were “misleading.” Instead of demanding the ads be taken off the air, AT&T asked the court to prohibit Verizon from displaying maps depicting blank, white space where it does not have 3G coverage.

Verizon refused to recall the ads, but did superimpose the phrase “voice & data service available outside 3G coverage areas” at the end of the advertisements.

After a judge declined to provide AT&T with a temporary restraining order on Verizon’s ads, the carrier fired back at Verizon with ads of its own touting the virtues of its EDGE network. It recently completed substantial 3G upgrades in the greater San Francisco Bay Area and Seattle.