AT&T’s real problem


Everywhere you read about technology, the chief complaint about AT&T seems to be its dropped calls in big cities.  And while that’s a very valid complaint and all, AT&T has a much bigger problem on their hands.

It’s their coverage map.

Ask any AT&T rep about their 3G coverage, and one who is well-versed in bull-shittery will quickly point out that AT&T’s 3G network reaches 75-80% of the US population.  Wow, you think.  That’s pretty reasonable.

Unfortunately, that’s just a really flattering interpretation of a pretty lousy 3G footprint.  Much of the US is crammed into some super densely populated areas, so you can reach 75% of the US population without covering much land.  And maybe if you live in a large city that is blanketed in AT&T 3G, it’s not a big deal to you that 3G isn’t available out of your bubble.

However, when you pay your inflated wireless bill, you’re paying for a nationwide wireless network.  You’re paying for a promise that you can go out to these far out places and have some coverage.  You’re paying for a promise that you can be traveling down a highway in a place you don’t know and call up a friend for directions because you’re lost.

But that’s not really something you can do with AT&T, because they just don’t put forth the effort.

I live in the Madison area, and I often travel to Iowa via 151, which is a four lane highway all the way into Iowa.  If I made a phone call starting when I got on the highway and tried maintaining a call all the way into Iowa, my call will drop several times, because the towers are spaced too far apart.

But to AT&T, this is acceptable.  After all, why put the money into an area that isn’t very densely populated?  After all, it doesn’t give you much of a return, so why bother having it there for customers to use?

Again, it all comes back to the promise of a nationwide network.  When you’re paying your bill, you’re not just paying for infrastructure in the area your billing address is.  You are paying for a network to be there when you happen to be on this random road and you break down.  You’re paying to have service to make calls when you’re staying at a friend’s house in some podunk town.

For sure, AT&T needs to address the issues in its big cities.  And they can afford to do so, because they have a lot of subscribers per square mile.  But they also need to start taking more rural areas seriously.  Even EDGE coverage is acceptable here (though they could put up 3G towers and make a handsome profit selling internet service to people out in the country), but there needs to be some coverage.  Verizon has AT&T beat by a long shot, and their network is 3G across the board. And if AT&T wants to keep customers like me, they’re going to have to put forth the infrastructure, or I’m leaving in 2012 when Verizon LTE iPhones are available.

The Verizon iPhone isn’t coming any time soon. I promise.

Is there a bookie that will let me place a bet that AT&T will remain the exclusive iPhone carrier for a period of time?  If so, I could be sitting on a gold mine.

You don’t need me to tell you that Verizon iPhone rumors are a dime a dozen and that they’ve been around pretty much since iPhone was announced (but I guess I just did  tell you).  The rumors are all absolute crap until at least 2012.  It was confirmed in 2007 (and it was re-confirmed in 2010) that iPhone would be exclusive to AT&T by USA Today.  And here’s an Engadget article confirming this.

If you think that your early termination fee is high, you can bet that the early termination fee for the contract Apple inked with AT&T is much steeper.  And surely AT&T deserves a great deal of credit for letting Apple get its foot in the door for a revolution in how we deal with mobile phones in the US.  Now, the phone maker controls the user experience, instead of the carrier.  This leaves the carrier to focus exclusively on providing a great network for users, which is great, because AT&T needs all the time they can get to focus on making a better network.  Plus, canceling the exclusivity contract without AT&T’s blessing would put a damper on Apple and AT&T’s relationship, which for sure would need to live on after the two are no longer exclusive.

The relationship between Apple and AT&T right now sure as hell isn’t very good, though.  Wired had a great article about the strained relationship between Apple and AT&T, but the talk about Verizon iPhone is either the journalist making up shit as link bait (any article mentioning Verizon and iPhone is sure to get a lot of reads) or the Apple contacts were just fucking with them (which actually would be a really fun thing to do if you worked for the fruit company).  I knew for sure it was pure myth when I read the part where Apple allegedly dropped the Verizon iPhone plans upon realizing that the CDMA radio chip was too big and would require a nontrivial redesign of iPhone’s innards.  Apple’s influential enough to get Intel to redesign chips for them and let Apple have them early; to say that Apple couldn’t either modify iPhone’s design for CDMA chip or get a smaller chip is just dumb.  And even if a CDMA iPhone wasn’t a choice, Apple could have sold the iPhone unlocked or to other carriers in the US, but isn’t.  It isn’t that Apple doesn’t want the extra customers, it’s the exclusivity agreement.

Now, I’m sure there are clauses in the contract between Apple and AT&T that would allow iPhone to go non-exclusive.  For instance, there is probably a clause for low sales.  As you’ll note, iPhone’s sales surely haven’t been suffering, so no chance that clause will save us from the wrath of Ma Bell.  And since we didn’t really have phones using data back in 2007, Apple was naïve and didn’t bother putting in a network performance clause.  After all, we had never really seen cell networks get congested before iPhone, so how were we to know that cell networks were so vastly unprepared for us to actually start using data?

The bitter truth here is that US Americans using iPhones won’t have access to good… maps, like Verizon’s… until 2012.  Assuming that efficient enough radios exist by then, we’ll likely see iPhone jump straight into LTE, which happens to be what Verizon is starting this year.  By 2012, their LTE network should be nice and well developed, and the LTE iPhones will work around the world.  Man, I look forward to these days.