The headline in the New York Times didn’t really say it so I will – AT&T points fingers at their customers for the slow network performance we’ve all experienced with our iPhones. Because we iPhone users actually USE our devices as they were designed (well except those features that have been blocked by the carrier), AT&T wants to claim that we are just a bunch of selfish bandwidth hogs causing such a strain on their 3G network that it’s affecting not only other iPhone users but ALL users of their network.

Here’s what I find most interesting, AT&T’s CTO John Donovan made the statement “It’s been a challenging year for us. Overnight we’re seeing a radical shift in how people are using their phones. There’s just no parallel for the demand.”

Overnight? WTF are you talking about? The iPhone 3G had been out for over a year and you even had the orig iPhone that provided some indication of a NEW type of smartphone. But the last quote is really the most interesting and why I believe AT&T failed badly – “There’s just no parallel for the demand.” No parallel?? How can this come from a CTO of such a large company?

So why do I think this is incompetence? Think about it. You have the exclusive carrier deal with the hottest phone from the super brand Apple. The iPhone is not like any other smartphone, it’s more like a laptop – yes AT&T, a laptop. You’re telling me that AT&T did not factor in data usage from net users and that they only looked at other smartphones? Clearly they did not think this through or really understood what the iPhone was about.

The iPhone represents a paradigm shift in mobile communications. People want to be connected wherever they are at all times. They don’t just want to just talk to someone or check email – they want to explore, discover, keep informed and even be entertained. Just look at the macro trends over the last 5 years. Always on connection growth, online video consumption, social games, texting and of course social networks. And over the last year twitter opened even Google’s eyes to the consumer demand for real time information. All of this data was available to AT&T had they taken a step back and really appreciated what they had.

Now some of you may say that AT&T did consider all of this to which I would retort then they either had really bad forecasting or they ignored this data and decided to screw us iPhone users and squeeze out as much profit as possible by oversubscribing the network and not worrying about delivering the experiences they market.

Both are very viable but let’s say they DID foresee this demand yet chose not to start building out their network ahead of the curve as that would cost money and drain the monopoly profits they would get from this deal. How could they get away with this?

If we weren’t consumers but rather a business customer AT&T would be held to an SLA (service level agreement) and be liable for compensation when their services fell below the SLA threshold. Now I don’t know about you other iPhone users out there but I’ve personally not had any adjustments to my bill to credit me for their poor network. Maybe there’s an opportunity for a clearinghouse or type of business that monitors carrier network service levels and gets us a credit when the carriers fall below the threshold. Assuming they could get the cooperation of the carriers it might have enough demand from consumers. Eh, who am I kidding. As long as the carriers have their exclusives and continue to force locked in contracts they have no incentive to honor what they sell.

Click here to read NYTimes article