AT&T: Beware the Wrath of iPhone Users

If Verizon is smart, it will offer to buy out the contracts of AT&T's iPhone customers. What's a couple of hundred bucks in return for a $100 monthly bill? It should be a slam dunk.
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The iPhone -- so many reasons to love it, so many reasons to hate it. You can wow your friends with apps like Shazam and UrbanScope. You can marvel at the compass that works even without any signal. But you can't use Adobe's Flash. You can't use Skype over the 3G network. And, all too often, you can't do the things that every 3G mobile phone is supposed to do: browse the Web, check email, and even -- gasp -- make calls. Yet this mobile phone purgatory may soon come to an end ... at AT&T's expense.

Clearly, the voice and data networks provided by AT&T, the iPhone's lone American carrier, cannot handle customers' demand for services. As a result, the service can be shockingly bad. On May 12th, I had to try a local telephone number six times before I could get through. On May 13th, I was without email and Web browsing for an hour in a heavily populated part of my city; reinitializing the network connection and rebooting the iPhone made no difference.

AT&T executives have been aware of this problem for at least six months. Some of them made a now-widely-reported trip to Apple last year to work on solutions. AT&T has been so worried about the deficiency of its service, in fact, that it installed temporary cell sites at the recent South by Southwest Interactive Conference, presumably so that none of the entrepreneurs and commentators in attendance could complain.

In the meantime, however, pricing for iPhone service has remained the same, and that's wrong. For at least six months -- and probably longer -- AT&T has been selling iPhone service in the knowledge that it will not always work as advertised, especially in big cities. Existing customers should be receiving a discount, and new customers should be receiving warnings before they sign up for service. Of course, neither of these things is happening.

If you call AT&T, you can spend dozens of minutes going through a series of questionnaires and checks for which the technical term is "the runaround." Customer service representatives will insist on checking your handset's hardware and software, as well as the functioning of the local signal towers, rather than conceding that the volume of calls and data requests in your area could be an issue. You'll be passed from department to department, with no one fessing up to the network's deficiency or offering any compensation.

How could this happen to one of mighty Apple's flagship products? How could Apple, a company that prides itself on customer service, partner with a company that can't serve its customers? The answer to both questions is simple: AT&T has no competition as an iPhone carrier, so, at least while the iPhone remains a superior device, the company has little incentive to improve its service.

That may soon change, however. Within the coming year, supposedly, Verizon will launch its own iPhone service. As you can tell by listening carefully to the competitors' television commercials, AT&T's 3G network may be faster (when it's available), but Verizon's is bigger and more reliable. If Verizon is smart, it will offer to buy out the contracts of AT&T's iPhone customers. What's a couple of hundred bucks in return for a $100 monthly bill? It should be a slam dunk.

With a little competition, both providers should have more incentive to provide reasonable service. That incentive will grow when other devices --perhaps the next generations of the Nexus One and Droid -- can offer stronger competition for the iPhone itself. But for now, AT&T continues to charge its customers for service that doesn't work. Will anyone be surprised if they abandon AT&T en masse as soon as they can?

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