Real Facts Behind AT&T VS. Verizon Debate

AP put out a good piece examining the facts between the AT&T vs. Verizon telecom ad wars. They point out that the two former baby bells: "Verizon and AT&T are both pulling away from their smaller rivals, so instead of competing with Sprint Nextel and T-Mobile USA, they're increasingly focused on each other. "

Uncle Bell, however, would like to point out that they are engaged in what will ultimately be an irrelevant argument. As Moore's law kicks in to cell phone coverage, the debate will not be about who has the best coverage, but who provides the best overall service. All the major networks are catching up on providing good blanket coverage across the United States.

But which one will separate itself from the pack and offer some real game changing service enhancement for the internet age, the way that Yahoo did when it offered a comprehensive home page, the way Apple did when it created the iPhone or Google did when it revolutionized search? It will be that cell carrier that will be able to dominate the market at internet speed.

You can the full article here:

AT&T VS. Verizon

The War Continues: Verizon vs. AT&T and iPhone

Below is a link to an interesting article discussing Apple's advertising volley in the ongoing war between Verizon and AT&T.

iPhone joins AT&T Against Verizon Ads

The article makes an excellent point. What AT&T needs to do, which Apple does, is explain WHY it's product/service is better, not just argue that it is.

This is a larger problem of mind think at the new AT&T which still thinks like the old AT&T. It thinks it can win any war in the marketplace simply by dominating market share and saturating the airwaves with ads, rather than focusing on offering something better.

Luke Wilson to AT&T's Rescue

AT&T has released a fairly effective ad in response to Verizon's "false" claims about having better nation wide coverage. Here's the link to You Tube:

Luke Wilson's Looking Good

Verizon's claims for better coverage are about as accurate as AT&T's claims of being "faster," generally it's a comparison of apples and oranges depending on where you live and how you test it. Speaking of Apples, it's interesting to note that when AT&T clicks off a list of four reasons why its service is better, two of them are because it is the exclusive provider of the iPhone. Most popular smart phone? iPhone. 1000 apps? iPhone. What exactly does AT&T have going for it but the iPhone?

AT&T probably had to respond to Verizon's claims and this isn't a bad one. The problem is, Verizon's ads are effective because people are very unhappy with AT&T coverage and speed. That doesn't mean they would be happier with Verizon, and if they have an iPhone they don't have any choice. While AT&T does have some annoying holes in it's coverage, most of it's problems with providing consistently good cell service come from the insane popularity of the iPhone and it's relentless hunger for data. One is tempted to cut AT&T a little slack in this area while it tries to keep up with the new iPhone 3Gs's sales. But ultimately, if it can't improve the speed of it's network over the next year, the charges of poor cell coverage are going to stick, and even Luke Wilson can't help.

Why AT&T isn't Apple: MSS Messaging Just Got More Expensive

Apple unquestionably made a deal with the devil when it signed on for AT&T to be the exclusive carrier for the iPhone. At the time, it really didn't have much of a choice. Making an exclusive deal with one of the major carriers was probably was the only way to get on the market and probably got them a better deal for what might have turned out to be a limited market product. (Of course, now it's the top selling smartphone by far.) Steven Jobs said at the time, and it made sense, that an exclusive deal was the only way to get the software and hardware properly integrated for things like random access to voice messaging. This is probably one of the reasons the launch of the iPhone was pretty smooth and customer satisfaction is so high.

Of course, the downside of this was that Apple had to play by at least some of AT&T's rules, and certain compromises were made. The one area where I suspect Apple put it's foot down was one flat rate unlimited data access to the internet. AT&T probably would have preferred to have a sliding scale, charging more for more use, because that's the way annoying way the company likes to do everything.

One of the areas where Apple caved in was in MSS messaging. AT&T not only charges an absurd rate for sending the cheapest and easiest data, 20 cents per 160 character MSS message, but on the last iPhone upgrade insisted that its customers pay a minimum of $20 a month (on top of their regular bill) for the honor. Oh, and if you don't agree in advance to the charge, the service is turned off so you can't get the messages if you suddenly change your mind. The contempt for the customer of this charge, for something that should basically be free, is so infuriating that I momentarily considered not upgrading my iPhone. I caved in at the last minute, but I spend every waking hour plotting to find a free alternative (Twitter anyone? Push e-mail?) to convince all my friends to switch over to. (Just a note, it's not only 20 cents to send a message, it costs 20 cents to the person getting it. That's a double rip for messages that were originally 10 cents back in the day when it was more expensive to send them.)

But since I'm paying out the 20 bucks a month anyway, and the 40 cents total per message to me and my buddies, my eye was caught by the announcement on AT&T's webpage that you can now send pictures and video through MSS. Now there's other free ways to upload pictures and video from your phone for friends to check out, but it's nice that AT&T has finally caught up with a little free upgrade to it's outdated MSS service…

Oh, but it isn't free. You see, AT&T wants more money. More money, more money, more money. 20 cents for a message isn't enough. If you want to send a picture or video, it's 30 cents. Here's the link:

FEED ME!

Now, really, AT&T, are you that cheap? Are you that crazy? You're going to charge me $20 a month for a service that has numerous free alternatives (blackmailing me to prepay or not have access) and then charge anyone I'm foolish enough to send a the message to 20 cents for the privilege. And now you want 30 cents for sender and receiver?

MSS messaging is the land line of the digital age. It's a carry over from the early days of data communication. It's on it's way out. It's going the way of the dinosaur. Apple knew that, and allowed AT&T to rip some extra money from the less digitally savy and the lazy. AT&T got to keep charging an arm and a leg for something that now cost virtually nothing. Then AT&T got greedy and upped the stakes by forcing people to prepay monthly. Okay, keep your blood money, it was worth it for a flat rate for internet access.

But now, you want to make even more money off this outdated overpriced service? You're going to charge extra for pictures and video? Are you trying to insult us? (Obviously, there is no technical reason for this extra charge. The amount of actual data in a photo is a hundred times greater than a 160 character text message and a video is thousands of times greater than a photo. So the extra 10 cents has no relation to reality, it's just what AT&T figures people won't gripe too much about. Charging 30 cents for a picture just makes it even more crazy to be charging 20 cents for 160 characters of text.)

Politically, this is a huge mistake. The overpricing of MSS messaging is something that already is on customers, consumer groups and even Congress's greedy telecom gripe list. Why not offer pictures for the same price? Why not keep MSS messaging somewhat relevant in the future, rather than hastening it's demise, or risking government interference.

Now, I can see how some out of touch money crunchers at AT&T might think this is an issue of charging a little more for a new feature, just like they love to charge extra for any other feature they can think of. But what they don't understand is that people hate being nickeled and dimed like this. The internet never would have taken off so fast and so wide if there hadn't been fixed monthly pricing. If every new feature on the internet was an additional cost, it simply never would have grown into what it has.

The fact that there are so many free apps available for the iPhone is the reason people are willing to pay for SOME OF THEM. If every app cost money, the whole thing would have probably died in the cradle and if every app had a monthly charge, people would be tossing their iPhone's in the trash. Apple understood this and made sure there were free apps from the get go.

AT&T should be grateful it has this little annoying MSS cash cow attached to such a great phone that offers so many other features for one flat rate. It should either shut up, keep it's head low and milk it while it lasts, or lower it's price to something reasonable ($10 a month and 10 cents a message). For it to get greedy and try to think of ways to charge even more for it, is simply crazy.

If AT&T was smart, it would continually improve and add free features to MSS just to keep people paying that $20 bucks a month without bitching. Let anyone with the feature send pictures and video to a website for free. Connect it with Twitter for free. Let them get free coupons over MSS for discounts, etc. MSS could actually be turned into an WWW internet alternative (just like iTunes) for a base $20 a month. Why not let people send music clips over it free, or whatever?

The iPhone won't be exclusive to AT&T forever. Even if Apple doesn't insist on becoming non-exclusive, the way AT&T is going customers and the government will force the issue. So why can't AT&T see that it has a unique opportunity to create loyal customers and to build a technology base to compete into the future? Why rip off your customers so they are ready to flee the second they have a chance? Why not use this exclusive time to build good will?

Instead, AT&T is looking to make an extra dime anytime you want to send a picture of your kitten to grandma. Shame on you AT&T! And I'm not kidding.

AT&T Just Doesn't Get It: Part 3

So one last story concerning my history with AT&T before we move onto more current news.

After all my previous problems with AT&T led me to a weird mix of Vonage, cable internet and a single land fax line, I moved into a new office complex. Problem was, it didn't have cable access. There was only one choice for internet service. You guessed it, AT&T.

AT&T DSL was the only option in the building. So you'd think AT&T would be happy that I was forced to take their money for any hope of internet access. They were, but they wanted more. In order to get DSL, they required me to have a business phone line. No option on it. So instead of paying $30-$60 a month for internet, I ended up with $120 a month for both internet and a business line.

Pissed off, I relented, but every bill I got made me angrier and angrier. I never even used the business line and I have to say, getting rid of both bills was a least a tiny part of why I ended up closing my office and deciding it was easier to work at home. Naturally, when I delightfully informed AT&T I would no longer be wanting their business services, I got the usual offers of discounts, etc. and a push to keep the phone number to move to my next business. I declined.

But this brings up a good issue. Instead of trying to blackmail and cajole you into paying too much for stuff you don't want, why not offer something you do want? The AT&T rep on the phone was actually very nice. He simply had nothing I wanted. I admitted that I was annoyed with my previous service and pricing ("Would you like overpriced bad service for slightly less?") and that I was closing my office anyway ("Would you like to sign up for overpriced bad service at your next place of business?"). I did mention that I had an iPhone, and so I was kind of stuck with some kind of AT&T relationship whether I liked it.

And here was the missed opportunity: Why doesn't AT&T offer a Vonage like business service for iPhone users? Why couldn't the rep have offered to move my phone number onto the cloud? If I could have kept the business phone number (which a few people had) and had a Vonage style answering machine service attached to it, I might have considered it. Especially if I could access that number in some way easily through my iPhone and the internet. Of course, I wouldn't pay a lot for that service, maybe $20 a month, but we're talking about just moving around some bits. It shouldn't cost AT&T almost anything to offer such a service. If it had been $10 a month, it would have been a no brainer. I would have done it in a shot.

I would be great to have two phone numbers, one for business and one for personal, linked to my iPhone. AT&T has tremendous opportunities available to it to provide it's customers with innovate future solutions, but it seems focused on trying to milk as much as they can out of outdated services. In the process, I think they're losing a lot good will that they are going to need as telecoms race to the bottom in terms of offering cheap services.

Final note: Once I started working at my apartment the issue of internet access became a bit of a problem. Prior to that, I used my iPhone for answering simple e-mails, occasionally borrowed a connection from a local coffee shop, and went to the office when I needed full access. Now at home, I finally decided I would have to pay for a real internet connection. I figured I would get a cable connection.

But fliers from AT&T in my mailbox offered DSL for only $19.95. Wow, that was pretty cheap, and they said "No phone line required." So, AT&T finally realized that requiring a phone line was a mistake. But why did they need to say so on the flier? Obviously because there were enough pissed off former customers that they had to now explain you didn't have to pay for stuff you didn't want. Of course, $19.95 was only for a certain amount of bandwith, and the rate quickly climbed. What was stupid about this, is we know that in reality it costs very little extra for AT&T to give more bandwith, and yet they are so determined to try to milk every dime out of you they offer an low rate in hopes that poor people will pay that, and if you got more money they can charge you more. After all my bad experiences with AT&T they were last on my list of companies to get service from (unless forced to). So what did I go with cable?

Nope. While I was trying to make up my mind, my apartment started offering a Wi Fi connection for free.

So, in conclusion, the giant AT&T has lost $120 a month from me. Because it charged $120 rather than $60 a month I wasn't even willing to consider paying it $19.95 a month and stalled on getting internet service long enough to end up with it for free.

The reality is, the world is moving toward free internet access. Maybe these teleco giants, like AT&T will be able to stop it through their monopoly power and government lobbying, but probably not. More and more free internet connections are going to be available and less an less people are going to have to pay for service in order to simply connect.

Until that happens, AT&T can make a ton of money. But rather than spending it on trying to stop the inevitable, or bleeding their current customers dry, why not try to figure out what kind of services people will still pay for once there is world wide free access?

In this particular example, if AT&T had a Vonage type cloud service for business phone numbers, I'd probably still be paying it monthly for that extra phone number. What AT&T needs to do is start thinking outside the box. Moore's law is going to apply to the internet. The price of getting bits is going to get cheaper, and the amount of bits you can get is going to get faster. AT&T is at a crossroads. It can continue to think like IBM did at the beginning of the PC revolution, as a company that provides physical items (PC's or physical connections) and fade out of the market (perhaps focusing on business service). Or it can become the telecom version of Microsoft. Create software that can provide services that people need and will pay for, regardless of how they get access to them. Or become Apple and split the difference.

AT&T Just Doesn't Get It: Part 2

Continuing on the spotty history with the "new" AT&T that prompted this blog, to make a long story short, problems with my internet cable service forced me to get a land line again at my business fax number so I was once again brought into the AT&T fold. But says a lot that as a busy guy who likes to keep things simple and is willing to pay a little more for quality service, I felt it necessary to have a cable internet hookup, a Vonage voice line, and a single AT&T fax land line. It was not only a lot cheaper than letting AT&T provide these three services, but also slightly more dependable. Obviously the opposite should be true. It should be a snap for AT&T to offer all three much cheaper.

Anyhow, once I was forced back into AT&T's circle I got a call from a very nice AT&T business rep. She wanted to know why I only had a single fax line, and could she talk me into using AT&T for everything. I said I doubted it, and she said that regardless, she was going to be my new business rep. She would provide the personalize assistance I really needed to handle all my problems. I said that that sounded nice, but I was busy so maybe she could start by sending me her e-mail and I could get back to her with my needs.

Well, she said she wasn't allowed to use e-mail.

Oh.

So this giant telecom company had a policy not to allow it's business reps to use e-mail to service their clients. Really? She asked if she could call me back some time when I was less busy and I said fine. But if you aren't even allowed to use e-mail, I doubt you'll every be able to help me much.

Half a dozen left messages later, with me scratching my head as to why I would bother answering them, and my business rep quietly disappeared. Now this was a couple years ago, and I hope AT&T has since loosened it's no e-mail policy, but the bad taste of it all still hangs in my mouth. It's hard to measure the long term impact of these kind of missteps on a huge brand like AT&T, but I think they add up.

Also, consider for a moment if instead of fighting e-mail, AT&T had an aggressive policy of using it? Wouldn't it be great to have an on-line business rep who you simply dashed off an e-mail to whenever you had a problem? Surely these could be handled by cheap off shore workers who could create a "virtual" business rep.

Of course, e-mail is problematic if your company relies on confusing customers to make money, or provides lousy service and it's really interested in fixing it. You don't want a hard copy digital paper trail with dates and times of every problem, every overcharge, etc. But long term, AT&T will simply have to get it's act together or it won't survive. It really won't be able to compete once everyone gives up their land lines and they have to rely on providing better service and prices.

AT&T Just Doesn't Get It: Part 1

The title of this post will probably become a recurring theme on this blog, because for a giant corporation that offers technology services, AT&T seems completely out of touch with how to use technology to service their customers.

Case in point came after I canceled my business land line in favor of Vonage. I got a call on my old phone number from an AT&T rep asking if I would reconsider. I patiently explained that their service has been insanely bad to the point of rarely working and woman sheepishly offered various discounts and incentives to go back to it. Even she seemed embarrassed when I asked why I would pay anything for something that did work, but she had a script she had to play out. Ridiculously, the offers involved various complicated discounts on long distance an other areas where AT&T had already lost any competitive edge against all sorts of flat rate service providers.

On one level, I can sympathize with AT&T's dilemma. They made (and still continue to make) a fortune off old land lines owned by old people afraid to embrace new technologies or too lazy to search for cheaper alternatives. There isn't a good reason to fix the old copper wires until they're ready to put in optical wires and over complete internet and media services. Moreover, they have to know eventually they're going to have to lower rates to be competitive with alternatives, but why do it now while they're still making money off these suckers?

That's simple economics, and I understand that. But what they need to stop is deluding themselves that it's smart to waste peoples time trying to delude them back into the fold once they've left. Perhaps they have some statistics that indicate that if they have phone banks in India call back old customers and offer flimsy discounts to return to service, they can milk those old cows for a little longer.

I think what they can't calculate as easily is how incredibly annoying such calls are and how much they soil their already tarnished corporate image. In areas where they know they are going to be upgrading to optical lines, I think it would be a lot smarter for them to just give up on lost customers, and spend that money for phone calling on speeding up the upgrade. Then when an AT&T rep calls, they have something real to offer and maybe a better shot they will be listened too.

Welcome to the AT&T Critic

When the "new" AT&T came back from the dead after a merger of baby bells (broken up from the "old" AT&T) I was rather surprised when they embraced what was a historic, but rather unpopular corporate brand. AT&T was not a name that inspired warm fuzzy feelings from former customers, like say Lego or Chips Ahoy. Nor did it even inspire much in the way of quiet respect for past glory, like say IBM or Xerox. The name AT&T first and foremost reminds one of giant uncaring business monopolies that really need to be busted up if there is going to be any progress for mankind. In fact, AT&T was the most famous example of a corporation whose government forced breakup almost immediately brought about progress and change. Kind of like when the Death Star exploded.

So when a bunch of baby bells with local monopolies merged with a third place national cell phone carrier, what kind of message where they trying to send when they choose to revive the name of such a famous corporate villain? We're they trying to be ironic? Where they trying for some revisionist history, kind of like the re-embracing of Stalin in Russia today? Nope.

Because it quickly turned out the new AT&T was determined to be exactly what was hated about the old AT&T. It would be huge, force itself into your life, charge too much and provide lousy service all because you'd have no choice. It would be reviled and not care, and use its bulk to push around both customers and the government. It would gain market share not by offering innovation, but buying up telecom landscape and raising the rent.

Once my local baby bell had been renamed AT&T my business voice, DSL and fax hard line phone bill went up, became more confusing, and service deteriorated. Of course, the local land line had been in decay for some time, and service had always been neglectful, but something about slapping a bright new AT&T logo on a ridiculous bill for long distance access seemed to add insult to injury. The phone would frequently go dead, repair men would take days to locate and repairs would only last for a few weeks. Repair men would openly discuss the fact that the infrastructure was completely decayed and simply needed to be replaced. But there wasn't anything they could do about it because AT&T was waiting to install high speed lines some time in the next decade to offer cable services. But that would be after congress passed legislation allowing it to bully it's way into that market. In the meantime, I was expected to pay high land line fees for lousy service to finance their lobbying efforts. I cancelled my service and went with a combination of Vonage and cable internet access which was also spotty and too expense, but somewhat less annoying.

In fact, the new AT&T's greatest immediate accomplishment was to make much hated cable service a little less hated and to hasten the death of traditional land lines with they monopolized in many parts of the country. Fighting net neutrality and cell phone service interchangeability is another area where they come off just a little better than people advocating the kicking of puppies.

Unfortunately, the reason monopolies need to be busted up is because they work so well. So when the iPhone came out, and Apple was forced to make a deal AT&T to get access to their cellphone towers, I was also force back into AT&T's spiked embrace. Once again, I was forced to pay high fees (20 cents per text message? Excuse me?!) and accept marginal service that borders on sadistic (Pay more to upgrade my phone than buy a new one? Excuse me?!). I've seriously considered giving up my iPhone just because I revile AT&T so much. But my iPhone is so cool, what to do?

Well, if you can't beat them, start a blog. At minimum, I now have a public forum to voice my complaints so my friends and families can be spared them. And, who knows, maybe AT&T isn't really evil. Maybe they are interested in trying to provide good service at a reasonable price, and maybe a little constructive criticism from an outsider is just what they need to improve.

Maybe, just maybe, I could make a tiny difference. After all, this isn't the old days of Ma Bell when there wasn't any competition. As much as AT&T tries to buy up and dominate rather than innovate, there are limits to it's power. If it doesn't improve it's service and polities, I really do believe it will not survive. And there have to be people inside that company that know that.

The internet does provide 15 minutes of fame to anyone willing to use it, and lucky enough to say the right thing (or wrong thing) at the right time. Who knows, perhaps some sparklingly insightful observation or criticism from this blog will be Googled by the right AT&T executive just as he prepares his powerpoint for a presentation. "You see, the blogsphere hates this…"

You, dear readers, can assist by adding your own brilliant comments, linking to this blog and feeding me any insider tips to keep things interesting. You can contact me at mackaybell@gmail.com.

Sincerely,

Mackay Bell

(Ma Bell's cranky Uncle)