Verizon reported healthy second quarter increases in revenue and profit, based on subscriber growth increasingly fueled by the expansion of its FiOS fiber network and growth in wireless telephony and data services.

Separately, Verizon Wireless, a joint venture with Vodaphone, said it will buy Rural Cellular Corp. for $2.67 billion in cash plus the assumption of some debt. Rural Cellular has 700,000 customers in – as one might imagine – small markets.

In its second quarter, Verizon reported 167,000 net new FiOS TV customers, pushing it over half a million total (515,000) FiOS TV subs. Verizon also added 125,000 satellite TV customers through its co-marketing agreement with DirecTV. Adding FiOS and DBS video subs together, Verizon now has 1.3 million total video customers.

FiOS is now the source of the company’s broadband growth. Verizon had 288,000 net new broadband connections in the quarter, 203,000 of which were new FiOS Internet subscribers. Verizon now counts 7.7 million broadband connections, of which 1.1 million are FiOS Internet customers.

As of the end of the quarter, the company had passed a total of nearly 7.6 million premises with FiOS, on track with the year-end target of 9 million. FiOS Internet is actually available for sale to 5.7 million premises in parts of 16 states, while FiOS TV was available for sale to nearly 3.9 million premises by the end of the second quarter, up from 3.1 million at the end of the first quarter.

Regarding Verizon Wireless, the company had 39.5 million retail data customers in June – a 36.6 percent increase over second quarter 2006. Verizon Wireless now has Revision A (Rev. A) technology throughout its entire wireless footprint, covering more than 210 million people. At the end of the second quarter, 46 percent of the company’s 27.5 million retail customers had broadband-capable devices, though Verizon did not say how many of those were actually subscribing to the service.

Verizon reported second-quarter 2007 earnings of $1.7 billion, or 58 cents in fully diluted earnings per share (EPS). This compares with reported EPS in the second quarter 2006 of 43 cents before discontinued operations.

Verizon’s total operating revenues grew 6.3 percent to $23.3 billion, compared with the second quarter of 2006.