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AT&T: Run Like It Really Wants to Lose


Dropping calls, offending customers, and ignoring reality.

Editor's Note: Welcome to Love It or Hate It, a regular dual-column feature that will capture the love-hate relationship America has with some of its biggest, most controversial companies. For past columns, click here. For the opposing view on AT&T, see AT&T: Bigger, Better, Faster.

The number of indiscretions made by AT&T (T) in 2009 is more than just a tad overwhelming. As its image took a savage beating and its customers grew increasingly frustrated with its service, AT&T appeared to be in a race with AIG (AIG) to execute a record number of embarrassing business maneuvers and high-profile gaffes in a year's time.

At this point, there's very little reason for any of us -- especially customers -- to forgive AT&T. A Consumer Reports survey in December ranked AT&T dead last in overall customer satisfaction and marked abysmal scores in service quality, staff knowledge of problems, and the likelihood of having an issue resolved.

And iPhone (AAPL) users in the US -- who are stuck with the exclusive carrier -- have contended with a gamut of issues. (See also, Apple and AT&T: Together Forever?)

Proud owners of Apple's prize smartphone are few and far between in New York City, one of the world's densest metropolitan areas where the iPhone boasts a 30% dropped call rate. In other words, if you're using an iPhone in midtown and only one out of four calls fails, consider yourself lucky -- a sentiment echoed at the SoHo Apple Store Genius Bar.

For much of the year, iPhone customers also dealt with a lack of MMS, a feature that allows users to send photos as text messages which is available in even the most basic cell phones. When customers weren't in the dark due to a service outage, they occasionally had to wait a few days for a voicemail to arrive. (Hope that second interview wasn't important). And by now, iPhone owners in the States have given up hope of ever seeing the promised tethering feature on a non-jailbroken device.

But AT&T assured the public that it was on the mend. To show how concerned it was with troubleshooting any issue that could arise, AT&T released an iPhone app that documented any area that experienced a dropped call or voice static and uploaded that location to the network. An honorable move if, of course, the app didn't fail in those areas.

The terrible service has become so difficult to deny that it was even mocked in a Weekend Update segment on Saturday Night Live -- a program not exactly known for its esoteric observations -- and spurred the Fake Steve Jobs to launch a massive synchronized attack on AT&T's data servers. (See AT&T Braces for Synchronized iPhone Attack). But after the blogger sheepishly called off the attack a few days later -- presumably because of some "persuasive" correspondence with the FCC -- AT&T survived the onslaught and was free to ruin its coverage on its own accord.

But since last October, Verizon (VZ) made sure that AT&T wasn't getting away with any instance of bad service without being called on it.

Parodying iPhone's "There's an App for That" ads, Verizon began an ad campaign that compared AT&T's lackluster 3G service with its own, using the phrase "There's a Map for That" to illustrate Verizon's extensive 3G coverage. Because the ads were so evocative of AT&T's shortcomings, the company lashed out and filed a lawsuit. Not for any factual errors, mind you -- AT&T didn't seem to have a problem with its terrible 3G service -- but because the carrier thought that viewers would misconstrue the wispy flecks of red as the only locations where a phone call could be made. This, in spite of the "voice and data services available outside of 3G areas" disclaimer under the maps. (See AT&T's Lawsuit Only Magnifies Spotty Service).

After a judge denied the frivolous injunction, AT&T dropped the lawsuit and, instead, launched an ad campaign of its own.

Featuring Wes Anderson-darling Luke Wilson, the ads relied on more intangible superlatives like "best 3G experience" and "most popular smartphones." Ultimately, the commercials failed to connect with most viewers who found a woman fumbling with the Motorola Droid's (MOT) flip keyboard and pleading "Where's my cool phone???" as coming off a bit over the top and further evidence that AT&T was grasping at straws.

However, AT&T seemed to be in solid company last month when Steve Jobs unveiled his much-anticipated iPad with exclusive AT&T 3G coverage, crushing rumors of a new relationship with Verizon. With that one media event, Apple confirmed that it was continuing its tumultuous partnership with AT&T -- despite finger-pointing over iPhone hiccups and spawning an FCC investigation when it convinced Apple to drop Google (GOOG) apps from the iTunes Store.

But the public's reaction was far from relief. It was more like exhaustion.

After suffering through all the problems of AT&T with just the iPhone, few believe the network can handle another Apple device. Will the company website also deny metro New York sales of the iPad -- like it did with the iPhone -- claiming New York can't handle the iPad either? (See AT&T: New York City "Not Ready" for iPhone). Adding devices to a hobbled network doesn't seem all too wise at this juncture.

As mentioned before, it's difficult to defend AT&T now and I don't envy my colleague for having to provide a favorable position for the company. (See AT&T: Bigger, Better, Faster). Time and time again, the mobile provider has proven that it can't handle the traffic it receives or the criticism it deserves. Rather, the blame is displaced and the company goes on the offensive, making AT&T and its actions even more odious than the situation dictates.

But then again, as head of AT&T's mobile division Ralph de la Vega would like you to believe, it's not AT&T's fault. It's yours for not knowing "what represents a megabyte of data." (See Why AT&T Is the Biggest Loser of 2009).
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