Why AT&T canít win its Ďmap for thatí spat with VZW
It seems the more AT&T (NYSE:T) pursues its grievances with Verizon Wireless (NYSE:VZ, NYSE:VOD) the more it gets egg on its face. The two have been engaged in an ad battle over the last several weeks over the truths and fictions about AT&Tís 3G network ó a battle that has spilled over into the courts and the media, as AT&T tries to force VZWís commercials off the air. Ultimately, itís a battle AT&T canít win. Itís arguing over nuances. And the more nuanced the discussion about AT&Tís network becomes, the more perceptions of AT&Tís network will suffer.
AT&Tís big complaint is that Verizonís ads only depict its 3G network coverage, creating a false impression that AT&T doesnít offer service of any kind in the vast majority of the country. The argument doesnít hold much water because VZW is clearly taking aim at the 3G network, but the whole issue of coverage is a red herring. VZW is looking for an easy way to demonstrate what is at the essence of the ads: AT&Tís 3G network leaves a lot to be desired. A map with huge swathes of white spaces in between the metro markets highlighted in blue does the trick. But the problem with AT&Tís network isnít so much where it doesnít offer 3G coverage, but where it does.
AT&T rightly points out it has high-speed packet access (HSPA) networks covering 75% of the U.S. population, while the spaces in between are filled with 2G EDGE networks. If you happen to be in the 25% that doesnít have 3G coverage, your data speeds are going to suck if you have the iPhone. But what Verizon hasnít pointed out ó yet ó is that connection speeds often arenít much better if youíre living in the blue. AT&Tís 3G network in the major metro markets isnít just spottier than its 3G coverage, but also millions of iPhone and other smartphone connections have squandered what capacity is available. In many major metro markets the 3G network is so overloaded, connection speeds have been reduced to sub-2G levels, and in some cases 3G-capable phones are being shunted down to the Edge network
Thereís another claim of AT&Tís with which Verizon could start taking issue: the title of the fastest 3G network in the U.S. While technically true ó AT&T could theoretically support a data connection as high as 3.6 Mb/s compared to VZWís 3.1 Mb/s ó AT&T doesnít have the highest capacity network in the country. AT&Tís HSPA downlink channels are 5 MHz wide, while Verizonís are only 1.25 MHz, meaning VZW has double if not triple the 3G capacity of AT&T in many markets by virtue of having multiple carriers deployed. Remember wireless networks arenít like cable modems or DSL lines. This is shared capacity weíre talking about. It doesnít matter if your network is twice as fast if your network has to support three times as many connections.
These are hard concepts to explain in a 30-second commercial to a general public whose understanding of wireless data can be boiled down to ď3G fast; 2G not so fast.Ē But AT&T has given Verizon a venue to express its sentiments in far more detail: the courts. VZW has already made the most of that pulpit, claiming the ďthe truth hurtsĒ and, more to the point: ďAT&T failed to invest adequately in the necessary infrastructure to expand its 3G coverage to support its growth in smartphone business, and the usefulness of its service to smartphone users has suffered accordingly.Ē
Those are quotes lifted from Verizonís court filing, and they are being bounced all over the Internet media echo chamber by bloggers and mainstream journalists, many of them iPhone users living in some of AT&Tís most problematic markets such as New York and San Francisco. Theyíre understandably frustrated with their own and their readersí poor AT&T 3G experiences so far, and the Verizon-AT&T spat gives them an opportunity to vent those frustrations. You canít tell me AT&T didnít see this coming.
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