My letter to AT&T’s CEO and the FCC

After reading about how AT&T’s CEO handles their customers, I felt an urge to fire off a letter to both their CEO as well as the chairman of the FCC, detailing exactly how I feel. You can check out further discussion and comments about this issue on gdgt.

From: Dave Schumaker
Date: Thu, Jun 3, 2010 at 2:11 PM
Subject: A concerned and frustrated AT&T customer.

Dear Mr. Genachowski and Mr. Stephenson,

I’m writing to you today to talk about four very important issues from the perspective of a customer and citizen who has paid for mobile phone service through AT&T Wireless for the past three years, and heavily relies on it every day for both professional and personal purposes.

The issues I wish to discuss will demonstrate that AT&T holds undeniable contempt and disdain towards its customers and will include the following issues: insufficient cellular coverage, early termination fees (ETFs), tethering and SMS/MMS fees, and customer service. For your convenience, footnotes and other references are located at the bottom of this letter.

I. Cellular Coverage

The first issue I’d like to talk about relates to AT&T’s lack of reliable cellular coverage in major metropolitan areas[1]. I live in San Francisco, which many users will agree, has always had temperamental cell phone service. This is probably due to its hilly topography and high concentration of data intensive customers.

In October 2009, I moved from an area near downtown San Francisco into a new neighborhood in Haight-Ashbury. My cell phone (an Apple iPhone 3GS) often experiences dropped calls[2]. This is not too surprising, as some reports have pegged the dropped call rate on AT&T at 30%[3]!

As I stated above, as someone who uses their phone cell phone everyday, the lack of reliable service puts an undue burden on my ability to conduct business and significantly affects my professional and personal lives.

This lack of consistent cell phone service also affects myself and others in other ways. On May 15th, a group of friends and I were threatened with a bicycle lock in Haight-Ashbury for refusing to give a transient a quarter. Unfortunately, none of us could make a phone call to police to report this dangerous person, since we all had AT&T phones that displayed the frustrating words, “No Service.” God forbid if something had actually happened!

Because of the above issues (work, personal, and safety), I believed that my only options were to either request a rate adjustment for my monthly bill (on the basis that I can’t actually use the phone to make calls) or to cancel my AT&T service and move to a carrier that could provide me with more reliable coverage.

After chatting with AT&T representatives on numerous occasions (most recently, April 29th, April 30th, and May 21st), I was informed that it would not be possible for AT&T to adjust my monthly rate nor waive my ETF[4]. In essence, I am being penalized and forced to pay despite the fact that AT&T cannot provide consistent service in my new neighborhood. This is neither fair nor reasonable to myself or other users, who now feel trapped with AT&T.

A temporary solution that has been suggested to me is the purchase of an AT&T 3G MicroCell device[5]. For further information on how the MicroCell works, read AT&T’s description: “AT&T 3G MicroCell acts like a mini cellular tower in your home or small business environment. It connects to AT&T’s network via your existing broadband Internet service. […] With AT&T 3G MicroCell, you receive improved cellular signal performance for both voice calls and cellular data applications like picture messaging and surfing the Web.”

In theory, this sounds like it may be a reasonable intermediary solution. Unfortunately, AT&T again demonstrates their lack of empathy of behalf of their customers and wants to charge me $150 for it. This again implies that it’s somehow my fault that AT&T cellular service is bad where I live.

II. Early Termination Fees (ETFs)

On June 1st, AT&T raised their ETF for new contracts to $325, an absolutely outrageous burden[6]. Sadly, this example of shameless greed is being duplicated throughout the mobile phone industry. Verizon announced an increase in their ETF to $350, which prompted an inquiry from the FCC[7]. These outrageous ETFs are anti-competitive, discouraging users from moving to potentially better carriers and hindering consumer choice.

III. Tethering and SMS / MMS fees

AT&T recently revised its pricing structure for data plans[8]. While AT&T removed its so called “unlimited” data plan, the revised pricing structure and its overage charges seem fairly reasonable.

However, if users want the ability to tether their mobile phones to their computers, they will be required to pay a monthly fee of $20. This onerous charge is nothing more than a “convenience” fee to allow customers to use data they’ve already been allocated and are already paying for in a different way[9]. It’s yet another example of the extreme greed that these companies will resort to.

A second example of these unreasonable and unfair fees are related to text messaging on phones (via both SMS and MMS). These messages piggy back on parts of the cellular spectrum that are already used. In essence it costs very little for carriers to transmit these messages, but customers are being charged up to $20 a month for this feature[10].

The New York Times ran a piece that explains this in further detail: “Perhaps the costs for the wireless portion at either end are high — spectrum is finite, after all, and carriers pay dearly for the rights to use it. But text messages are not just tiny; they are also free riders, tucked into what’s called a control channel, space reserved for operation of the wireless network.

That’s why a message is so limited in length: it must not exceed the length of the message used for internal communication between tower and handset to set up a call. The channel uses space whether or not a text message is inserted.”

IV. Customer Service

Rampant fees aren’t the only issue that carriers demonstrate a lapse of judgement in. Their atrocious customer service policies are second to none. The most recent example of this is a user writing an email to AT&T’s CEO to complain about their new service plans and ultimately receiving a cease and desist threat from their legal department[11].

This lack of regard for its own customers is frustrating and disappointing. This sort of behavior severely tempers my desire to ever enter into a new contract with AT&T in the future.

V. Conclusion

Both fees and the behavior of cell phone companies are out of control. Users are often left with little choice in the phones they want, the networks they wants to use, or the features they wish to pay for.

In my opinion, the above examples demonstrate that AT&T Wireless, and to a lesser extent, Verizon Wireless, show nothing but contempt and disdain toward their customers and the anticompetitive practices of the mobile phone industry severely undermine consumer trust, confidence, and freedom.

It is my hope that consumers can one day experience freedom from the ridiculous and sometimes draconian policies of mobile phone carriers and truly exercise their freedom of choice in a truly competitive free market.

Sincerely yours,

Dave Schumaker
San Francisco, CA

CC: Randall Stephenson (CEO AT&T), Julius Genachowski (FCC Chairman)


1. LaVallee, Andrew. “AT&T to New York and San Francisco: We’re Working on It.” Wall Street Journal. Published: 9 December 2009.

2. Schumaker, Dave. “A gallery of failed calls.” Published: 4 January 2010.

3. Buchanan, Matt. “Apple Genius Bar: iPhones’ 30 Percent Call Drop Is “Normal” in New York.” Gizmodo. Published: 29 September 2009.

4. Schumaker, Dave. “AT&T is an insufferable service.” Published: 21 May 2010.

5. “AT&T 3G MicroCell” Accessed: 3 June 2010.

6. Murph, Darren. “AT&T follows Verizon, jacks up ETF on netbooks and smartphones.” Engadget. Published: 21 May 2010.

7. Ziegler, Chris. “FCC gives Verizon the third degree over $350 ‘advanced device’ ETF.” Engadget. Published: 4 December 2009.

8. Ziegler, Chris. “AT&T makes sweeping changes to data plans, iPhone tethering coming at OS 4 launch.” Engadget. Published: 2 June 2010.

9. Gruber, John. “Bullshit From AT&T VP on New Tethering Charge” Daring Fireball. Published: 3 Jun 2010.

10. Stross, Randall. “What Carriers Aren’t Eager to Tell You About Texting.” New York Times. Published: 26 December 2008.

11. Patel, Nilay. “AT&T warns customer that emailing the CEO will result in a cease and desist letter.” Engadget. Published: 2 June 2010.

Hah, of course I send this letter and find out AT&T just apologized to the customer it threatened.

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