AT&T's really bad week: The network reputation hits keep coming

It's safe to say AT&T is ready for the weekend. The telecom giant has had a horrid week with a backlash against iPhone 3G S and complaints about the network.

It's safe to say AT&T is ready for the weekend. The telecom giant has had a horrid week with a backlash against iPhone 3G S and complaints about the network. The latter item may create the most lasting damage.

For now, much of the focus is on AT&T's upgrade pricing for the iPhone 3G S. Simply put, if you want the new iPhone and you're still under contract you won't get it for $199. You're on the hook for $399. Apple iPhone fans, the types who are used to upgrading when a new device is available, are pushing a Twitter petition. AT&T informs folks that it is listening to the complaints.

Lost in this hubbub are the anecdotal signs that the reputation of AT&T's network is taking a hit. When the Apple-AT&T exclusive iPhone deal ends we may learn that AT&T emerged with its reputation in tatters. A bad reliability reputation will last well beyond the iPhone exclusive. Let's recap the signs that AT&T's network is becoming a punch line:

  • As reported by Sam Diaz, WWDC attendees chuckled when AT&T was mentioned at the iPhone 3G S launch. Apple was laughed at when it was mentioned that AT&T would support MMS. AT&T wasn't mentioned in the same sentence with tethering. And you know that "S" is a joke waiting to happen. Speed? Try slow.

WWDC 2009: Apple unveils iPhone 3G S At Apple's WWDC in San Francisco, Apple's SVP of marketing, Philip Schiller, shows off a new, speedier iPhone. The iPhone 3G S features a 3-megapixel camera and can shoot video at 30 frames per second. The phone is available next week in the U.S and some other countries.
  • AT&T promises a significantly faster network. That's good news for iPhone users. The bad news: It's an admission that AT&T can't handle the iPhone traffic and is slow about upgrading its network.
  • Verizon Wireless is deftly taking advantage of AT&T's network troubles. Last month, Verizon Wireless chief Lowell McAdam said that AT&T’s “ceiling for their network will be the floor for our network.” McAdam called AT&T’s announcement on its network upgrade old news—about a year old. He also noted AT&T’s promises to upgrade speed are spin.
  • Even Howard Stern, who chose a BlackBerry Bold over the Palm Pre, notes that he can't make calls on AT&T's network without being dropped repeatedly. Stern's sidekick Artie Lange---and others on staff---mention that Verizon Wireless is flawless. Verizon Wireless usually has to pay for a commercial like that.

And the hits just keep coming. Don't be surprised if Jay Leno and David Letterman start knocking AT&T in monologues.  It's not immediately clear how AT&T can counter the perception that its network can't hang with heavy data usage, but it better figure out something quick.

It's nice that AT&T is listening to the iPhone pricing backlash, but it may be focusing on the wrong problem.