AT&T Responds

James Carracher, of AT&T's blogger relations team contacted me about my post AT&T, let's review the facts and I've obtained his permission to present his message to you.

AT&T's message

Hi Dan:

I am a member of AT&T’s blogger relations team. I handle enterprise issues and saw your post on Virtually Speaking this morning (“AT&T, let's review the facts”). Unfortunately, there has been a lot of misinformation, rumor and pure speculation floating out there during the last day on this topic.

AT&T is not “blaming” or “castigating” customers, the iPhone or any other device, nor have we spoken definitively about capping services. What Ralph de la Vega actually said was:

“But what we're doing now is making sure that we do focus groups to understand what customers are doing and how customers are likely to behave in the future. And the interesting thing is that customers are not aware, fully aware, of how they are driving traffic and what constitutes high traffic or not. For example, when we do focus groups, some customers may think that because they have a lot of e-mail traffic, that causes a lot of data. That is not the case.

What's driving usage on the network and driving these high usage situations are things like video, or audio that keeps playing around the clock. And so we've got to get to those customers and have them recognize that they need to change their pattern, or there will be other things that they are going to have to do to reduce their usage.”

When asked whether the industry needed to consider usage-based pricing, he also said:

“I think one of the first things that we need to do is we need to educate the customers. And it's something that customers today have not been used to doing, so we've got to get them to understand what represents a megabyte of data.

And so what we're doing now is we're improving all of our systems so that we can begin to give customers real-time information about their data usage and begin to get customers educated. And I think longer-term, there's got to be some sort of a pricing scheme that addresses the usage, but that's going to be determined by industry competitive factors, regulatory factors and customer [successes]. So I can't give you a prediction, other than our first area of focus is to get the information to the customers so they know their own patterns of usage.”

Reading your post, there’s a strong insinuation that we are not taking action to boost our network in the face of unprecedented growth.  Here are facts that refute that.  First, the context: We carry more smartphone data traffic than any other U.S. provider, with traffic growing 5,000 percent over the past three years. As a result, we are working aggressively and investing heavily in our network to support this tremendous growth. Our $17 - $18 billion CapEx spend for 2009 includes:

• Nearly doubling the wireless spectrum serving 3G customers in hundreds of markets across the country, using high-quality 850 MHz spectrum.  This additional spectrum expands overall network capacity and improves in-building reception.
• Adding about 2,000 new cell sites, expanding service to new cities and improving coverage in other areas.
• Adding about 100,000 new backhaul connections, which add critical capacity between cell sites and the global IP backbone network.  We're doubling the number of fiber-served cell sites this year.
• Enabling widespread access to our Wi-Fi network – the largest in the country with more than 20,000 hotspots in all 50 states – allowing them to take advantage of the best available AT&T mobile broadband connection.
• Rolling out even faster 3G speeds with deployment of HSPA 7.2 technology, with availability in six markets planned by the end of the year.
• Preparing for field trials of next generation, LTE wireless networks next year, with deployment planning to begin in 2011.  This schedule aligns with industry expectations for when a wide variety of compatible 4G wireless devices should be available.

We have seen very positive results from our efforts thus far.  In one of the most common measures of reliability – dropped calls – AT&T’s national performance is within two-tenths of 1 percent of the highest score among major providers as measured by an independent firm, with only 1.32 percent of calls dropped nationally.

With all that said, we know there is work to be done and we will not rest until customers are satisfied.  Appreciate the opportunity to have this dialogue with you.

Best,

Jamie

Snapshot analysis and comment

While I can certainly appreciate what AT&T has and is doing to address its network issues, it is clear to me that they've not done a good job of addressing customer perceptions. After all, to the customer, their perceptions are their reality until they learn the facts.

Now that I have a more complete understanding of the facts, at least from AT&T's point of view, I can better understand the challenges they face in the task of trying to keep ahead of user demand.

What is also clear to me is that AT&T and Apple jointly created this user demand and have not responded quickly enough to issues. This has allow people to react badly to AT&T's statements even though the motivation behind them was good. I can also comment that even though they've invested heavily in the solution, it has not been completely effective in providing acceptable levels of service in many cities I visit.

I personally am not happy with the network performance I've observed while working in my offices in cities such as NY City, San Francisco and Boston.  I have seen excellent performance in Tampa and spotty performance in Minneapolis, Chicago and Orlando.  Although I haven't been keeping statistics my seat-of-the-pants estimate is that in the cities mentioned, over a quarter of my calls are dropped.  Network access is slow to start up and both Email and Web browsing become extremely problematic.

This, along with the iPhone's short comings have me seriously considering a replacement cell phone and a replacement service provider.  I'll let you know what I do and why.