AT&T’s Seth Bloom Speaks Out on Verizon’s “Deceptive” Ads

The battle between Verizon wireless and AT&T over Verizon’s ads mocking AT&T’s 3G coverage has been a contentious one. AT&T took Verizon to court claiming the ads deceived the customers. While it lost the first round, being denied an injunction, AT&T will have another chance to plead its case at a December 16 hearing.

AT&T’s public relations representative, Seth Bloom (an employee with Fleischman-Hillard), contacted us, looking to give us his company’s views on the debate. We were happy to get some interesting responses to our questions. Our dialog is given below:

DailyTech: Is Verizon’s map of your 3G coverage incorrect? (I’m talking specifically about 3G coverage, not misinterpretation.)

SB: They chose geographic coverage. What the maps don’t show is that about 75 percent of Americans – 233 million people – can access AT&T 3G services today where they live and work. AT&T offers 3G service to roughly 81% of the customers to whom Verizon offers 3G.

DailyTech: Accuracy aside, do you feel the coverage map is deceiving? Also, as it says 3G coverage, why do you feel customers won’t be able to figure it out, if that’s the reason why you feel it’s deceptive?

SB: Yes, we feel the coverage map is deceptive and independent research has shown that Verizon’s commercials mislead some consumers into thinking AT&T does not offer any wireless service in a vast area of the country. In addition to the 75 percent of Americans – 233 million people – who can access AT&T 3G services today where they live and work, all of the activities shown in the Verizon television advertisements can be done on AT&T’s 2.5G EDGE network, which is available to more than 296 million people where they live and work and across the vast majority of the United States. The ads undermine the public’s confidence in the coverage of AT&T’s network and in how we represent that coverage.

DailyTech: What’s the worst dropped call rate posted by AT&T — by your internal metrics — for a city? The best?

SB: I can only share national figures. 3G dropped calls are down 12 percent over the previous year and nearing a 1% level, and 3G blocked calls (unable to complete on first attempt) are down 30 percent.

(Ed. Note -We tried to follow up with a second request for more information, including total dropped calls, dropped calls on the EDGE networks and dropped call rates for New York City (or New York state). We also tried to get an answer whether these studies were conducted internally or independentally by a contractor. Mr. Fleischman was unable to provide us with that info, thus its hard to say whether reports of 30 percent dropped call rates on the iPhone in NYC via Apple representatives at a NYC Genius Bar was accurate. It is clear though that most of AT&T’s network doesn’t have this many dropped calls, though the exact number remains unclear, based on the limited info provided.)

DailyTech: What steps is AT&T taking to upgrade its 3G network?

SB: AT&T invested more than any other U.S. public company in 2008, and plans to spend between $17 and $18 billion this year, with billions dedicated to the wireless network. AT&T is setting expectations and standards for the technology community, encouraging them to develop the more sophisticated hardware, software and standards to handle the volumes and applications we’re seeing on our wireless network.

We’re deploying the next generation of High Speed Packet Access (HSPA) 3G technology – HSPA 7.2 – to considerably increase the mobile broadband speeds on our 3G network.
The network improvements include backhaul enhancements that will deliver more bandwidth to thousands of cell sites this year.
We’re also in the midst of an initiative to substantially expand the wireless spectrum serving 3G customers in hundreds of markets across the country, using high-quality 850 MHz spectrum, which expands network capacity and improves in-building reception. Deployments of this 850 MHz spectrum are about 90 percent complete today.
We’re adding about 2,000 new cell sites to our network in 2009, expanding service to new cities and improving coverage in other areas. o We’re enabling widespread Wi-Fi connectivity via the largest hotspot footprint in the country with more than 20,000 hotspots in all 50 states. Wi-Fi access is free to qualifying AT&T smartphone and broadband customers, allowing them to take advantage of the best available AT&T mobile broadband connection.
We’re preparing for field trials of 4G LTE wireless networks next year, with deployment planned to follow in 2011. This schedule aligns with industry expectations of when a wide variety of compatible 4G wireless devices will be available.

DailyTech: Would it be correct to say that perhaps the wild success of the iPhone and the growth in subscription (in the U.S.) caught your company a bit off guard, and that may be one reason for the struggles? If this is true or perhaps partially true, does this mean that with time these issues will go away as the high speed (3G) capacity catches up?

SB: The iPhone is an iconic device that has changed how people access information, and our tremendous success with the iPhone is clearly driving the data traffic on our network. But keep in mind that the demand for mobile data bandwidth is also being driven by a wide range of smartphones and emerging applications and devices, so it wouldn’t be accurate to pin the growth we’re seeing today solely on a single device.

At the same time, it’s important to note that we’ve maintained the nation’s fastest 3G network throughout, and we’re investing heavily and working tirelessly to enhance and expand our network to stay ahead of demand. (And that demand has been nearly 5,000 percent in the last 12 quarters.)

To answer your question more directly: Yes, we’re seeing strong results from the network investments that we’ve made to date and that will continue. In addition to the improved dropped call rate I mentioned above, AT&T’s 3G reliability is 96.67% and 3G retainability is 98.1%. (Both are within ½ percentage point of VZ.) Customers are noticing our efforts. AT&T added more subscribers in 3Q thanVerizon, and more customers left Verizon than AT&T in the same period. (AT&T: 2M adds, 1.43% churn vs VZ 1.2M adds, 1.49% churn). Our total churn rate has steadily decreased by 14 percent over the past two years, while Verizon’s has increased by 24 percent over the same period.

DailyTech: If AT&T can’t win a decision to take the ads off the air, what strategies might be employed to counter the bad publicity? Might AT&T turn to fighting fire with fire, perhaps picking at lacking aspects of Verizon’s network or phone offerings in new ads?

SB: Our new ad, which began airing last night, is one way we’re doing just that. We are also continuing to talk directly to customers. We want customers to know that our 3G network has unique attributes that Verizon and other competitors cannot match: AT&T has the fastest 3G network and that it allows for simultaneous talk and Web surfing. We also talk about our unrivaled stable of smartphones (not just iPhone) – Bold 9700, Bold 9000, Curve 8900 and other Blackberries; HTC PURE, HTC Tilt 2 – both running WM 6.5; Nokia E71x & Surge; Garmin nuvifone, and more. Twice as many smartphone users have chosen AT&T over any other US carrier.

DailyTech would like to thank Mr. Bloom for graciously accepting our request for interview and answering the majority of our inquiries in depth.

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