I had the same exact situation with Verizon. Usually once you've paid something, you've lost your negotiating tool (Money). Unfortunately, this account will not be removed from your credit report. Sending a copy of a letter verifying this account has been paid will help to update this account as paid, but the reporting agencies will not remove this account.
You can try disputing this account. Try disputing this account every 30 days with each agency. Each time, give a different reason. You can say this is not your account, or the dates or wrong. Whatever. If the collection agency does not respond, then the account will be removed. Or you can do what I did. I became a monkey on Verizon's back. Stating that I was not properly notified about my early temination fee's and was not given enough time to pay. Or you can file a complaint with the FCC.
http://www.fcc.gov/cgb/complaints_general.html