AT&T's Bait And Switch On iPhone Unlimited Service: We Screwed Up, So Now You Have To Pay More

from the well,-that's-convincing dept

Wed, Dec 9th 2009 7:22pm — Mike Masnick

There's lots of buzz going around concerning the news that an AT&T exec has admitted that to deal with the companies own inability to build out a strong cellular network (angering tons of iPhone users), that it's planning to put in place caps and charge more to high-end users. Of course, this is pure bait and switch. The company sold people on an unlimited data plan, failed to invest in its network, and pushed high bandwidth apps on people. And, of course, it's worth noting that while they now want to charge high bandwidth users more, they don't say anything about the low bandwidth users. No one gets a discount. AT&T is making a ton of money off of the iPhone. It could have -- and should have -- invested more of that into network upgrades. Now it's blaming its most loyal users -- the same ones who it recommended high bandwidth apps to -- and expecting that everyone will be happy with that? AT&T may discover that people start looking for other alternatives if they dump the unlimited data offering that they sold people.

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Filed Under: bait and switch, iphone, unlimited
Companies: at&t

83 Comments

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ChurchHatesTucker (profile), 9 Dec 2009 @ 7:34pm

Frakin' frakers!
Thank the Lords of Kobol that I haven't re-upped yet. They pull this shit, I'm out.
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Johnny, 9 Dec 2009 @ 7:39pm

yet Vevo.com is laced with AT&T ads pushing their mobile VIDEO capabilities. Identity crisis much?
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wnyght, 9 Dec 2009 @ 7:40pm

would you like lube with that service plan?
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Jesse, 9 Dec 2009 @ 7:46pm

Seems if they try to change the terms of the contract before it's up, then that means the customer gets a free iPhone. Sounds good to me.
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ScaredOfTheMan, 9 Dec 2009 @ 7:52pm

I dare them
Seriously, I've 2 iphones, and I tolerated their crappy service, and the pay back is going to be this?!

Droid is here ATT, I have no problems moving, so go'ahead do it, see what happens.

L
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Griffon, 9 Dec 2009 @ 7:54pm

wow material change of contract, sounds like I get to fire their asses and take my iphone somewhere cheaper... oh wait shoot.
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Brooks (profile), 9 Dec 2009 @ 7:55pm

Announcement?
Hey, Mike, can you point me to the AT&T announcement that backs up your claims that this will apply to all existing customers and that the lightest users won't play less than they do now?

I hadn't seen anything definitive about the rates or terms, but you apparently have. I'd love to read the details.
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Burns!, 9 Dec 2009 @ 8:01pm

F' AT&T in their collective ear. I hope they screw themselves by putting this plan into action. A material change in the terms of my contract would facilitate an even quicker departure for me. As it stands, I'm still out of there as soon as possible. AT&T is the *worst*!
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ChurchHatesTucker (profile), 9 Dec 2009 @ 8:05pm

Re: Announcement?
"Hey, Mike, can you point me to the AT&T announcement that backs up your claims that this will apply to all existing customers and that the lightest users won't play less than they do now?"

There's little in the way of details (yet) but that cuts both ways. They're saying that "incentives" to not actually use the network in the manner that you've paid for will continue, but neither is there any indication that using less of it is going to be a boon for you.

tl;dr Lesser is better.
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Anonymous Coward, 9 Dec 2009 @ 8:05pm

No one expected AT&T to do a good job with iPhone so it's no surprise. I have an LG Dare on Verizon that I've been happy with. Another 6 months or so and I'll upgrade to a Droid phone I think.
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Jim, 9 Dec 2009 @ 8:15pm

AT&T the worst?
Clearly there are coverage areas (or lack thereof) on which AT&T is screwing the pooch, so people who bought iPhones in those areas (e.g., New York City, San Francisco) are rightfully pissed. But I gotta say that in my area (greater Boston), the coverage is great, I never drop into Edge anymore, it's always 3G, and it's always two to five bars. I've experienced one dropped call in my year of usage, and life is good. The iPhone is simply awesome when you don't have to fret about coverage. Now, as for AT&T changing the terms of service, I don't think they can do that mid-contract, so if you have a two-year agreement, you're good until that's up, I'm sure. Afterwards, who knows? But, let's face it, nothing's free anymore, and if you're a bandwidth hog, you will eventually pay for it. I'm certainly not apologizing for AT&T, but the best way to tell them what you think is through your wallet. Trouble is, I can't imagine a scenario where I want to be without my iPhone, so... As for switching to Droid, I'll reserve judgment for now, but looking at it from a distance, it just doesn't seem to measure up to the iPhone user experience. Still, a real competitor to iPhone is a good thing, so I hope they do well. But, really, those commercials just serve to remind people what the best smartphone is...and it ain't Droid.
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Jeff, 9 Dec 2009 @ 8:17pm

I called it.
This is why I don't deal with products from Apple.

I am a PC.
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McBeese, 9 Dec 2009 @ 8:21pm

Has there ever been a company that has screwed up as much as at&t in recent memory? Everyone with an iPhone is chomping at the bit to get off of at&t as soon as possible. Doesn't really matter which network, they just want off.

Now this new move looks to be even more customer unfriendly. Damn.

U-N-B-E-L-I-E-V-A-B-L-E.
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Robyn M, 9 Dec 2009 @ 8:22pm

AT&T will make you pay
Bupkis to AT&T for making such an error in user projections and then making the customer pay for it. Bupkis to all the customers who bought into this fiasco of greed.
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McBeese, 9 Dec 2009 @ 8:24pm

Re: I called it.
How is this anything to with Apple? You think Apple is behind this?

Yes, you are clearly a PC. Full of logic errors and difficult to understand messages.
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Marcus Carab (profile), 9 Dec 2009 @ 8:25pm

Whether some Google seer foresaw this, or it was just dumb luck, this bodes ridiculously well for Android phones (as the link points out) - especially the Droid. Between their awesome Times Square marketing for Voice Search, and now the release of Goggles (and I'm sure they won't be in *too* much of a hurry to bring that to other platforms) they are already snagging customers from the iPhone.

Now if only they would bring the Droid to Canada.
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Jon Renaut (profile), 9 Dec 2009 @ 8:39pm

Re: I called it.
Though I loathe Apple and everything they do to pretend they still own something they "sold" to you, I'm sure Apple is just as pissed about this as you are.
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Haha, 9 Dec 2009 @ 9:00pm

AT&T
Say goodbye to the ETF
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bob, 9 Dec 2009 @ 9:04pm

Hummmm
Can't you use the Iphooey on another 3G network?
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chaotic1, 9 Dec 2009 @ 9:47pm

I wanted an iPhone so bad...
I used to try to get all 4 lines I have with Verizon to expire at the same time so I could leave for AT&T. I just renewed again with the HTC Droid Eris. I love it.
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Pjerky (profile), 9 Dec 2009 @ 9:47pm

Re: Frakin' frakers!
Unfortunately I still have a year left on my contract. But once that is up I am out and going to get an Android phone. I have had it with the dropped calls and the difficultly making calls (from time to time).

If they do this to me (and I am definitely a heavy user, streaming Pandora all day) I won't pay it and I will switch carriers in a heartbeat.
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Anonymous Coward, 9 Dec 2009 @ 9:50pm

Re: Hummmm
No, Apple went through a lot to make sure of that. They would rather cut off your dick and feed it to you than allow you to escape their money stealing partnership with AT&T.
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Doctor Strange, 9 Dec 2009 @ 10:11pm

How is this a "bait and switch?" AT&T and Apple offered me a two-year contract and a phone with unlimited bandwidth, and I got it. A whole bunch of other people did too. I don't recall anything in the contract I signed that obligated AT&T to provide me unlimited bandwidth at the same terms in perpetuity.

There is no evidence at all that they are going to change the terms of pre-existing contracts. The (scant) evidence is to the contrary:

Longer-term, he said, a pricing scheme based on usage is likely... (emphasis mine)

It's unlikely that they would be able to change this on people with existing contracts, so much so that they probably won't even try. It's likely that they would just stop offering it on new contracts. If they did want to modify existing contracts, they'd probably either exercise the option to terminate early without fees or buy out existing high-bandwidth users.

If you don't like the new contract terms, go get a different phone on a different carrier when your existing contract expires. That's how the market works: AT&T offers you a deal, and you either take it or leave it.

Hey, the pizza guy down the street used to sell me pizzas for $14.95 each and now he wants $18.95. Do I blog an article about how he bait-and-switched me for building up my loyalty and then raising his prices? The nerve of that guy!
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AdamC, 9 Dec 2009 @ 10:26pm

Get your perspective right only the heavy users are affected.
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Anonymous Coward, 9 Dec 2009 @ 11:36pm

Alot of you seem to forget when PrimeCo switched to US Cellular and tried to up the price of their unlimited minutes plan. The second they did that they were sued and had to give all former primeco customers who stayed the primeco price (which was 49.99 per month) instead of the US Cellular price (which was 89.99)
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., 10 Dec 2009 @ 12:46am

Bait & switch.
First get everybody hooked then switch your terms LoL

Some sleazy people will try to paint shades and talk about degrees off of something but really is just a bait and switch scheme. Legal or not.
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Azrael, 10 Dec 2009 @ 1:40am

Re: Hummmm
http://www.iphoneunlockcard.com/
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drewmerc (profile), 10 Dec 2009 @ 2:04am

Re: Re: Hummmm
erm jailbreak not some bullshit $39 sim
hope your deleted for spam
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DS, 10 Dec 2009 @ 3:50am

Re: Re: I called it.
Yes, because Apple has NOTHING to do with the mandated use of AT&T if you want an iPhone.

You must be an Apple, you cannot understand how Apple could ever make a mistake. Ever.
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John Doe, 10 Dec 2009 @ 4:19am

Re:
Yes, if it doesn't affect me, then why worry? Too much of that kind of thinking going on these days. Sooner or later they will come for you to.
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Oh Please, 10 Dec 2009 @ 5:18am

Re:
"It's unlikely that they would be able to change this on people with existing contracts"
"It's likely that they would just stop offering it on new contracts."
"If they did want to modify existing contracts, they'd probably "

- Seems you do not have any facts, just supposition.

"the pizza guy down the street used to sell me pizzas for $14.95 each and now he wants $18.95."

- Did you sign a multiyear contract with the pizza guy where you both agreed upon a set rate for unlimited pizza ?
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rebrad (profile), 10 Dec 2009 @ 5:22am

I'm Happy
My Droid works great in the middle of nowhere midwest. It does cost me $30 more for the data plan but I'm connected at lightning speed and have more apps than I can go through and I don't even need a computer running a resource sucking program to enjoy them.
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Mechwarrior, 10 Dec 2009 @ 5:59am

Re:
Sprint comes to mind.
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AJB, 10 Dec 2009 @ 6:02am

Not AT&T
I don't think its AT&T who's making a killing here. In order to get the license for the iPhone, they had to give up something like 30% of there revenue to Apple. If you look at what they paid Apple last year, it was a small fortune. Verizon was criticized at passing up the initial iPhone deal with Apple, but it looks like they were very smart. And, YES, those coverage ads are true, Consumer Reports puts Verizon at the top of every city it surveyed and AT&T at the bottom of most. Their coverage stinks, their customer service is horrible, and their coverage is lame. But they have a cool phone you can no longer use. Oh, and I *LOVE* my Droid... best phone yet!!
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Josef, 10 Dec 2009 @ 6:08am

Not really BS
This isn't really a bait & switch. It's more like a crappy service provider. ATT knew it wasn't ready for prime time in the 3G arena, but that's just how marketing goes. Push the product and service and hope it works. Because it was for iPhones, its not like people really had much choice.

There is more than enough bandwidth. The problem isn't bandwidth hogs and I'm sick of the carriers trying to slip that point in all the time. If there were really a bandwidth shortage then, how do the wireline carriers justify their move into video.

How can they provide me with IPTV, if downloading a movie is such a strain on their networks.

Bottom line is ATT got caught with their pants down and they want the customers to pay for their mistake. I guess that sounds fair if you work for ATT.
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Danny (profile), 10 Dec 2009 @ 6:21am

How long is iPhone exclusive to AT&T?
Anyone here know how long the iPhone is exclusive to AT&T? I would love to get an iPhone, but won't use AT&T (even before reading this post) due to poor signal quality in Chicago.

The whole recent ad controversy showing how poor their nationwide 3G coverage is strengthens my decision.

So, I want an iPhone when I can get it with another provider who supports Chicago (and other places) better.
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thinkliberty, 10 Dec 2009 @ 6:23am

Fine. Change the terms of the contract, I will go to vzw, the droid has flash support.
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Hephaestus (profile), 10 Dec 2009 @ 6:27am

Re:
"material change of contract"

They probably have a "the terms of service can be changed by us at anytime, for any reason" in the contract somewhere.
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Hephaestus (profile), 10 Dec 2009 @ 6:31am

Re: Re:
ATT - Apple Terms of service
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Dark Helmet (profile), 10 Dec 2009 @ 6:32am

Re:
"the droid has flash support."

Not yet, but coming soon, according to my Droid, who I've named Dot Matrix....
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Hephaestus (profile), 10 Dec 2009 @ 6:34am

Re: Re: Okay they do have a we can change this anytime in the contract
CHANGES TO TERMS AND RATES
We may change any terms, conditions, rates, fees, expenses, or charges regarding your service at any time. We will provide you with notice of such changes (other than changes to governmental fees, proportional charges for governmental mandates, roaming rates or administrative charges) either in your monthly bill or separately. You understand and agree that State and Federal Universal Service fees and other governmentally imposed fees, whether or not assessed directly upon you, may be increased based upon the government's or our calculations. IF WE INCREASE THE PRICE OF ANY OF THE SERVICES TO WHICH YOU SUBSCRIBE, BEYOND THE LIMITS SET FORTH IN YOUR RATE PLAN BROCHURE, OR IF WE MATERIALLY DECREASE THE GEOGRAPHICAL AREA IN WHICH YOUR AIRTIME RATE APPLIES (OTHER THAN A TEMPORARY DECREASE FOR REPAIRS OR MAINTENANCE), WE WILL DISCLOSE THE CHANGE AT LEAST ONE BILLING CYCLE IN ADVANCE (EITHER THROUGH A NOTICE WITH YOUR BILL, A TEXT MESSAGE TO YOUR DEVICE, OR OTHERWISE), AND YOU MAY TERMINATE THIS AGREEMENT WITHOUT PAYING AN EARLY TERMINATION FEE OR RETURNING OR PAYING FOR ANY PROMOTIONAL ITEMS, PROVIDED YOUR NOTICE OF TERMINATION IS DELIVERED TO US WITHIN THIRTY (30) DAYS AFTER THE FIRST BILL REFLECTING THE CHANGE. If you lose your eligibility for a particular rate plan, we may change your rate plan to one for which you qualify.
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Chuck Norris' Enemy (deceased) (profile), 10 Dec 2009 @ 6:50am

Re:
lube? add $19.99 to the contract!
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Chuck Norris' Enemy (deceased) (profile), 10 Dec 2009 @ 7:02am

Re:
Only the rich will be taxed. 1861
Now who pays income tax in the US? All of us!
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MattP, 10 Dec 2009 @ 7:21am

Re: Re:
A quick Googling showed that in 2006 41% of US citizens paid zero federal income tax. I'm sure that since then 2/5 of the population hasn't suddenly qualified to pay.
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Snidely, 10 Dec 2009 @ 7:21am

A little harsh on the Beaver
I think we need to cut AT&T a break here. They definitely underestimated the huge increase in usage thanks to the iPhone and are trying to remedy that situation. It takes a long time to get approval to add more towers and expand coverage. It's not just a matter of turning up the power to improve the signal strength. I don't fully support Mike's point here because he is effectively equating the caps on mobile broadband to fixed broadband. Regular readers know that Mike hates caps on fixed broadband and doesn't buy into the arguments that "the internet is running out of capacity". I completely agree with him there. The mobile world differs in that operators are constrained by spectrum availability, so bandwidth hogs really do impact the service everyone else receives. I totally agree that operators should be sued every time they use the word "unlimited". AT&T has a rather simple solution to kill off the bandwidth hogs - ban streaming services. Might drive away all of their customers, but will definitely solve the bandwidth issue.
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Hephaestus (profile), 10 Dec 2009 @ 7:26am

Re: Re:
LOL .... I think I will name my BlackBerry ... "Bob" ... to follow the ReBoot theme.
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hegemon13, 10 Dec 2009 @ 7:45am

Re: Re: Frakin' frakers!
I would think that if ATT no longer offers the service they contracted you for, you can get out free of charge. That's the thing about contracts...they're binding in both directions.
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hegemon13, 10 Dec 2009 @ 7:48am

Re: Re: Re: Okay they do have a we can change this anytime in the contract
Looks like ATT will be losing a lot of iPhone customers, who now effectively have an iPod Touch.
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kirillian (profile), 10 Dec 2009 @ 7:49am

Re: Re: Re: Okay they do have a we can change this anytime in the contract
I recall a lawsuit not too long ago that put the kabash on this kind of wording in a contract - the idea that one side can change the contract indiscriminately without any sort of penalty was kinda shot down...gonna have to go find that now......
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Yakko Warner, 10 Dec 2009 @ 7:57am

Only a matter of time
After all, all the land line companies do it.
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John Doe, 10 Dec 2009 @ 8:07am

Re: Re: Re:
You missed the point. The 41% are low income, the middle class shoulder the burden of the tax load. So the rich aren't the ones being taxed, at least not as much as the middle class percentage wise.
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Anonymous1, 10 Dec 2009 @ 8:13am

think we need to cut AT&T a break here. They definitely underestimated the huge increase in usage thanks to the iPhone and are trying to remedy that situation...

Give me a break. I don't own a "smart phone" for mutliple reasons, including the price of plans, and need. It's clear however that AT&T knew EXACTLY what they were getting into.The reason AT&T fought SO hard to get the deal with Apple is due to Apple's success. They saw what Apple was able to do with the ipod. That's why they wanted a partnership. Eveyone knew the iphone was going to be big, perhaps not the exact growth %, but big none the less. For AT&T to NOT adequately invest in the network is the height of shortsightedness, and IMHO, greed. So, it looks like according to the above posts, AT&T can change the terms, but people can then choose to leave the contract. If their plans go ahead as predicted, customers may well be leaving in droves.
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Brooks (profile), 10 Dec 2009 @ 8:34am

Re: Re: Announcement?
Actually, all there is so far is a guy at a conference saying they're looking at charging for data usage to disincent the heaviest users. You're right that there's no indication that using less will be a boon -- because there's no indication of any specifics whatsoever. You might as well say there's no indication that they won't hold your elderly grandparents hostage and demand your net worth in ransom.

In fact, there's nothing at all about whether this will only apply to new users or whether they're looking at applying it to existing users who signed up with the "unlimited" promise (and who therefore would be free to walk from the contract with their free iPhone, since this would clearly be a "material" change in terms).

Sadly, this seems to be a case of Mike speculating about what the news might be and then having a very strong editorial reaction. It's all good, but he framed his assertions as fact, and after doing a lot of digging, it seems pretty clear they're just his imaginings, based on a couple of sentences from an executive at a conference.
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ChurchHatesTucker (profile), 10 Dec 2009 @ 8:59am

Re: How long is iPhone exclusive to AT&T?
"Anyone here know how long the iPhone is exclusive to AT&T? I would love to get an iPhone, but won't use AT&T (even before reading this post) due to poor signal quality in Chicago."

It's up in early 2010. Should be an interesting few months.
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nasch (profile), 10 Dec 2009 @ 9:01am

Re: Re: Re: Re: Okay they do have a we can change this anytime in the contract
It doesn't sound that bad. The contract says 1) they have to notify you of changes and 2) if you don't like the change, you can terminate the contract with no penalty. Having a clause that would require them to pay you a penalty in that case would be great, but obviously not going to happen.
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nasch (profile), 10 Dec 2009 @ 9:04am

Re: Re: Re: Announcement?
You might as well say there's no indication that they won't hold your elderly grandparents hostage and demand your net worth in ransom.

Why doesn't AT&T confirm that they are not going to hold your grandparents hostage and demand your net worth in ransom? Just a simple press release is all it would take to quash these rumors... yet all we get is silence.
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Anonymous Coward, 10 Dec 2009 @ 9:51am

Re:
To finish the quote from the fine article:
Longer-term, he said, a pricing scheme based on usage is likely, though it will be determined by industry competition and regulatory guidelines.

I agree that to alter the agreement in the middle of the 2-year contract is lunacy for regulatory reasons. I suppose it's more reasonable would be to let these unlimited contracts expire and then only allow renewals with contracts with limited data usage. It's kinda legal that way-- although we are talking about AT&T...
If/when they do roll out the new limited contracts, it'd be interesting what their competition will say through their ads.
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AJ (profile), 10 Dec 2009 @ 9:57am

Re: Re: How long is iPhone exclusive to AT&T?
I think I read that T-Mobile is close to a deal and that Verizon's president has made four or five trips to Cupertino in the last few months.
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Chuck Norris' Enemy (deceased) (profile), 10 Dec 2009 @ 10:25am

Re: Re: Re:
I guess I should have said "All of us productive members of society!" The first qualifier is that you had income. If you make less than what qualifies to be taxed then you are a dependent. Dependent on your parents or the government.
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Hephaestus (profile), 10 Dec 2009 @ 10:37am

Re: Re: Re: Re: Re: Okay they do have a we can change this anytime in the contract
You can get out of an early termination by contacting them with in the predefined time period. Which is good.

On another note ....

I believe in coincidence I dont trust it .... I feel Verizon had inside information on this. The whole "Theres a Map for that" ad campaign seems to coincidental looking back.
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Anonymous Coward, 10 Dec 2009 @ 10:56am

Re:
Not yet
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Hephaestus (profile), 10 Dec 2009 @ 11:12am

Re: A little harsh on the Beaver
" It takes a long time to get approval to add more towers and expand coverage."

Its not about adding more towers its about putting the new hardware on the old towers. Totally different issue. One is regulatory the other is just being cheap.
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Derek Kerton (profile), 10 Dec 2009 @ 12:28pm

Re: Re:
"- Seems you do not have any facts, just supposition."

Yeah, but Dr. Strange is still right. There are very few facts *at all* at this point. Few facts for or against ATT. In fact, Dr. Strange's comment is among the least filled with supposition on this thread.

We don't know if ATT is planning on applying caps to new customers only, or if they are planning on applying that to existing customers.

I would expect them to apply it to new customers, and possibly to customers if they renew their contracts or upgrade their phones.

So everyone should relax until some more facts come down the pipe. Mike wrote the post largely because he is against all bandwidth caps. Perhaps most of you are, too. But don't be pissed about "retroactively applied caps" unless there is some actual indication that this will happen.
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Derek Kerton (profile), 10 Dec 2009 @ 12:40pm

Re: Re:
Perspective?

This isn't the SS. It's a cellular carrier. There are *ahem* subtle differences.

The butcher charges me more than the guy ahead of me in line because I bought 2lbs of ground beef, and the guy in front bought 1lb. Oh!! Look out! The butcher is "coming for me". The nerve of charging me more for using more. Look out gays, jews, and blacks...he'll come for you next...um...if you buy more beef. Scary stuff.

In other news: the electric company, gas station, Natural gas utility, subway operator, all "came after me" to pay more for using more. Crazy world.
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Anonymous1, 10 Dec 2009 @ 1:01pm

In other news: the electric company, gas station, Natural gas utility, subway operator, all "came after me" to pay more for using more. Crazy world.

Did those operators promise you unlimited use of their services for a certain price? *ahem* NO.

As an aside, is stupidity becoming more and more contagious?
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Derek Kerton (profile), 10 Dec 2009 @ 2:05pm

In Praise of Verizon...But Not Too Much, Please
"YES, those coverage ads are true."

Correct, but the impact is way exaggerated in the public consciousness, which really just indicates the massive success of Verizon marketing.

You see, in the simplest of terms, Verizon does have the "best" network. But when you get in to the details, it depends region by region, and even house by house. But far more important, for those willing to actually understand, rather than those just interested in parroting the VZW marketing campaign, is that THE DIFFERENCE BETWEEN BEST AND WORST IS TRIVIAL. That's right, basically the carriers are all the same...but most people have bought the VZW marketing message, and interpreted the results to mean VZW is great, and all else sucks.

Don't take my word for it: I mean, I'm just some telecom industry analyst! Here's what J.D. Power said in their most recent survey that put VZW on top:

"The study finds that the differentiation in call quality performance among wireless carriers at the industry level is particularly small in 2009. While call quality performance among carriers still varies at the regional level, the gap between the highest- and lowest-ranked carriers for the overall industry has decreased from 8 PP100 [problems per 100 calls] in the 2008 Vol. 2 study to only 5 PP100 in the 2009 Vol. 1 study.
http://www.jdpower.com/corporate/news/releases/pressrelease.aspx?ID=2009041

The Consumer Reports data are similar. Although VZW sits squarely on the top of the quality heap, the reality is that the spread is relatively small. Out of a score of 100, the results are Verizon 75, T-Mobile 70, Sprint 67, AT&T 66 (http://bit.ly/7GveUJ). So Kudos to VZW are definitely in order.

But I can't believe how strongly the average person has over-interpreted the results, and locked on to the message of "Verizon has the best network, AT&T sucks!" People, it's just not that big a difference. In reality, they both could stand to improve.

Now, factor in the sudden, and incredible effects of the iPhone on AT&T's network since launch in 2007. AT&T won't admit to this, but of course AT&T was caught off guard. And of course they owe it to their customers to improve the network to deliver quality service. And a look at their 2008 Annual Report shows they, in fact, ARE responding, having spent $20B on network upgrades in that single year. To act like they are sitting idle and screwing people over is to ignore the facts. Maybe $20B isn't enough, maybe it's adequate, but it sure as heck isn't nothing.

ARE YOU BEING PLAYED?
Don't fall for the marketing. VZW has spent an estimated $300M/year on marketing the "best network" message in their ads. Can you remember how long they have marketed the "Best network" angle? Well, Paul Marcarelli, the actor who plays the VZW Test Guy, has been appearing on your TV since 2002! http://bit.ly/zi8gL

Do you really think that you are immune to that kind of repeated, relentless assault of a specific talking point? The VZW campaign has been remarkably successful because it deals with something that really matters (network quality), and it has the advantage of being true. And because money talks. Political campaigns are won and lost on the spending of a few million dollars at the right time to sway hearts and minds. What effect does $300M/year for 7+ years have? Are people being played to over-interpret the difference in network quality? My answer is a definite "yes".

So if cellular networks were a 100 Yard Dash, Verizon would be an legendary winner, taking race after race. However, consumers should be savvy enough to understand that it's a close call every time.
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Derek Kerton (profile), 10 Dec 2009 @ 2:11pm

Re: Re: A little harsh on the Beaver
It's both.

New equipment increases capacity and bandwidth.

New towers increase coverage and reduce gaps.

Furthermore, the newest technologies often have smaller effective ranges (at same frequency and Tx power) as older technologies. Meaning that more towers are needed to get the expected higher throughputs.

Nothing about cellular networks is simple.
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Anonymous1, 10 Dec 2009 @ 2:20pm

Nothing about cellular networks is simple.

In other news: the electric company, gas station, Natural gas utility, subway operator, all "came after me" to pay more for using more. Crazy world.

Other than your defense of them...
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Derek Kerton (profile), 10 Dec 2009 @ 2:43pm

Re:
Yeah, except that you're wrong.

AT&T, and every other carrier in the world, has been trying to hit a home run with mobile data, or some differentiated service, ever since...ever.

Every time they have EVER thought they had a hit on their hands, they launched it...and were wrong. Every "exclusive" launch was basically a flop.

Exclusives on ringtones? Not a sudden hit, and quickly copied by all other carriers.

Exclusive on content, like Shakira music? Tried, and basically not enough to move any dials. http://listserv.techdirt.com/blog/wireless/articles/20060314/152841.shtml

Exclusives on handsets? Tried many, many times before the iPhone, but no other device was unique and desirable enough to move people from one carrier to another.

Awesome content that would drive up usage? Tried, and basically flatlined. Ringtones have been flat, mobile games have been flat.

Video that would be the savior of carriers and use some of their 3G capacity at a time when they had built 3G but no consumer gave a damn? Failed. Consumers weren't interested in mobile video.
http://www.techdirt.com/blog/wireless/articles/20050927/1219240.shtml

The only other hit, the Blackberry, was not a sudden success, but instead grew steadily in popularity since 1999, with success limited to email.

What I'm getting at here is that in 8 years of trying to drive increased use of mobile data, the carriers had seen near-failures at every turn, and only slow, steady growth up until 2007. These were "teachable moments" for them.

So, when Apple and AT&T struck their deal, despite past disappointments, you think AT&T should have KNOWN that it would be a sudden and huge success, and invested $20 Billion or so on the expectation that it would create huge, dramatic, unprecedented data traffic growth?

That isn't reasonable.
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Anonymoose, 10 Dec 2009 @ 3:17pm

Customers often enjoy being referred to as hogs.
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Derek Reed (profile), 10 Dec 2009 @ 4:10pm

Re: Re: Re: Frakin' frakers!
Did you sign a contract that says "AT&T will provide me with plan X that includes unlimited" or a contract that says "AT&T will provide me with 'service'"?

I'm going to rip at least a few managers a new one if they do it of course, and I'm sure I'm not the *only* one. Not sure what the actual terms of my agreement was though.
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Michael, 10 Dec 2009 @ 5:34pm

Re: Re: Re: I called it.
Apple signed a contract with AT&T at which time was the only only provider that would go with Apple and that was sufficient enough to handle the future growth of the iPhone, in Apple's eyes. So they didn't have much of a choice, as Verizon basically laughed in their faces at the very idea that none of the phone's features could be controlled by Verizon.

While Apple makes retardedly frustrating decisions, this was not one that had much involvement by them, I'm certain. In fact, that would be a really poor move on their part as this decision is going to put a serious dent in iPhone sales growth and their app store. Which is probably why there are a lot of rumors flying that Apple and Verizon are going to team up.

How in the hell do these things devolve into Mac vs PC debates? This story briefly mentions the iPhone being the leading cause of data use on AT&T's network, but has everything to do with AT&T's ridiculous policy changes. Can we not get past that phase? They're practically the same thing anymore.
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Rpatton (profile), 10 Dec 2009 @ 5:55pm

Re:
No Flash yet but soon .. they say January
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Johnny~xL^, 10 Dec 2009 @ 9:37pm

How did this devolve to PC v mac?
This has nothing to do with the silly pc/mac debate.

To all of you trashing At&t you need to get your facts straight. Yup, AT&T have a lame 3g network, but you do have unlimited bandwidth. Verizon would never allow that w/o a * in fine print and 4Gb or slightly more limit per month. Just look at all Verizons net cards & netbooks. Even their droid pricing is alacarte. Verzon is notorious for locking down phone functionality. Verizon does have great coverage, but their customer svc, billing, and neutrality (getting the most from YOUR device) are pathetic. Verizon will get the iPhone in time, and they will have a wacky pricing scheme that claims unlimited data but really has an upper limit that will be set too low. Nether of theses telcos are stupid, they are greedy, but AT&T won't be stupid and blow the only good thing they have by pissing off their best customers and creating a Sprint/nextel style mass exodus, which is a lesson I believe they should all focus on.
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Anonymous Coward, 11 Dec 2009 @ 12:57am

Oddly, I enjoyed the imagery of Luke Wilson in "Old School".

There was a scene where Luke's character tells people to throw cinder blocks over a the roof of a three-story building attached to fraternity pledges penises.

Blue, You're My Boy!
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theorangebox, 11 Dec 2009 @ 4:21am

iphone users are like cattle..
Quit ya bitcxhin' you are all part of the ATT herd so deal with it sheep!
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Anonymous Coward, 11 Dec 2009 @ 11:42am

Luke Wilson can be bought and told to say anything.
"Old School" was a funny movie.

As you may recall, there was a scene where Luke Wilson's character tells people to throw cinder blocks over the roof of a three-story building... These cinder blocks were attached to ropes which subsequently were attached to fraternity pledges in odd places.

If Luke can be bought for a script that includes such violent imagery as penis decapitation, I wonder... If the money is right, I wonder what else he could be persuaded to say on TV or the radio...
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Derek Kerton (profile), 11 Dec 2009 @ 1:55pm

Re:
OK, smartypants.

But if those wireless carriers (stupidly) offered unlimited services for many years, does it mean they MUST continue to offer them in the present, and for all the future forevermore?

*ahem* no.

Are the carriers' Terms of Service stipulated with contract lengths of "forever"? Negative on that.

Have you never seen a seller increase their price? Reduce their quantity? Did you not know that that is legal, often fair, and even occurs frequently in a free market?

So, yes. They sold unlimited. They are also allowed to stop selling unlimited. Duh.

Seriously! To be so stupid as you try to impugn others...
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Derek Kerton (profile), 11 Dec 2009 @ 1:59pm

Re:
Anonymous1

You're right for once. My defense of them IS simple. Simple economics as applied to the cellular services markets.

I criticize the telcos and cablecos as much as I defend them. This is the burden of being educated, neutral, and rational. I end up pissing off people on both sides.
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dean wysocki, 12 Dec 2009 @ 11:18am

Luke Wilson Whored Himself Out Deceiving People
I dont understand how luke wilson jumped in to represent At&t. With all forums blowing up about shabby service and the true pathetic 3g map they have, luke is deceiving people, he doesnt mentioned the nations fastest 3g is only available in very limited areas. and postcards in that commercial, too bad he didnt read them to find out that those att cust's couldnt email him : >
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Chris Pratt, 12 Dec 2009 @ 9:56pm

Everything I Wanted to Say
Took the words right out of my mouth, Mike. I cannot for the life me figure out how the execs over at AT&T keep their jobs. If I was a shareholder, I'd be screaming for their heads. Just one idiot move after another. I'm praying with every fiber of my being that Verizon get's the new iPhone in 2010; then, it's so long AT&T.
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Need to file a class action law suit, 29 Jan 2010 @ 6:48pm

Someone please file a class action law suit!
Someone needs to serve as a representative for the group of people who have been caught up in AT&T's fraud scheme. There needs to be a class action law suit filed against AT&T.
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telephone_fax_switch, 19 Mar 2010 @ 7:41am

thank for great article
Just came and read, this is wow! I was seek from many blogs, but here is the best, I love it.
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