Musings on the iPhone

iPhone 3GSIn just a couple of days Steve Jobs will get up on stage and share with the world the newest addition to the iPhone family. I was an early adopter of the iPhone and upgraded to the iPhone 3G on day one. However I skipped the 3G S last year because I wasn’t eligible for subsidized pricing and wasn’t sure there was enough to justify paying a premium for the new device. With the exception of iPhone 3G S launch day and the surrounding hoopla, I really haven’t regretted that decision. Well, I’m once upgrade eligible for a fully subsidized iPhone, (plus $18 upgrade fee) yet I’m not sure I’ll be pulling out my credit card on June 7th. Here’s why the purchase of this iPhone is a tough decision for me:

AT&T’s Poor Network

AT&T LogoAnyone who follows me on twitter or listens to my occasional ranting knows that my AT&T service sucks. I live in a city with a population of over 260,000. Not a metropolis by any means, but still large enough to justify reasonable cell coverage. AT&T has been a miserable disappointment. Sure, every city has their dead spots, that’s to be expected. But I have bad service just about everywhere I go. Voicemail can be hours delayed, my phone regularly doesn’t ring, even with 5 bars of service and text messages sometimes show up timely, sometimes not. I love the iPhone, but I hate AT&T.

Complicating matters for me personally is that my home is in a known dead spot for all cell phone providers in my city. Because of the geography of the land, we have an area that is recessed between a series of hills and has notoriously bad coverage. There have been efforts to get a tower in my area for years, but because the area contains a major park, two schools and several hundred residential homes, there has been community concern over the possible health risks associated with a tower. (Apparently there are those who think the cell towers are going to cause children to grow gills or something.)
The Verizon Question

Verizon Wireless LogoThe “experts” have gone round and round over the issue of AT&T exclusivity. The generally accepted notion is that the original exclusivity deal was for 5 years, but that there may have been modifications to the contract. Buzz seems to be at an all time high that a Verizon iPhone is coming but no word on when.

I had Verizon before and still had that same dead zone around my home. But generally after I left home and traveled around the city and state I had no problems making and receiving phone calls and messages. So for me, Verizon would likely have the same dead zone in my home, but probably be better service overall.

Also, let’s be real – everyone hates their cell phone company. They all suck. It’s 2010 and we sill haven’t figured out a way to make cell phones operate reliability. As one blog post pointed out, the grass may not be any greener over on the other side. We all saw how AT&T’s network crumbled under the iPhone’s popularity, what makes us think Verizon’s network will be that much better?

Let me weigh in with my two cents regarding this issue: I think we’ll see a Verizon iPhone within the next 2 years. Or put another way, I think anyone who signs a new 2 year contract with AT&T when the iPhone 4G comes out will be faced with a decision as to whether or not they want to switch carries badly enough to pay the early termination fee to dump AT&T. I do not think we’ll hear any announcements about a Verizon iPhone at WWDC.
Early Termination Fee

This just has me fuming. You may have heard that effective June 1, 2010, AT&T is drastically increasing their early termination fee on smart phones, including the iPhone. The ETF increases from $175 to $325. AT&T did lower the ETF by $25 on non-smart phones from $175 to $150. I should also note that for iPhones the ETF drops $10 a month for every month into your 2 year contract you go. Their rational is that the current ETF does not adequately cover the phone’s subsidy.

This may be true, but let’s just say the timing is interesting. True, Verizon made a similar move in raising early termination fees last year, (Verizon’s ETF is $350 and drops every month as well) but one can’t help but wonder why AT&T is doing this now. Part I’m sure is related to the iPhone 4G release, but is some part of it related to the fact that they know their exclusivity deal is coming to an end and they want to make sure that they can take one more swipe at their customers as they jump ship and head for Verizon?
The Promise of the Microcell

AT&T MicrocellI’ve got mixed emotions on this one. First off, when the heck is AT&T going to release the damn thing nationwide? We’ve been promised the Microcell for over a year now with the nationwide release being right around the corner. Then AT&T announced the Microcell came out of the “testing phase” in Mid-April but it still isn’t available in most areas. Apparently AT&T has to push out a network upgrade for the device to work with the towers. I check the AT&T website every day, no Microcell yet.

I’m not sure I like the idea of the Microcell. Of course I like the option for customers who have very poor AT&T service to have an alternative way to use their phone. But, I already pay for AT&T service that I can’t use. On average, I use around 200 minutes a month on my phone, not because I don’t want to use any more minutes, but because I can’t. My phone doesn’t work in the areas where I make most of my phone calls. So because AT&T has poor service, I have to pay them another $150 for a device to connect to my broadband to supplement their network. That doesn’t quite seem fair. I pay for the minutes, I can’t use them so I have to pay for the Microcell and I have to pay for the broadband. By the way, for the first time in years, I also now pay for a home phone line because I can’t use my cell phone at home.

If AT&T had some kind of policy that would provide the microcell to customers for free or at a drastically reduced cost if there were documented network issues in their area, I would feel much better about this whole situation. Unfortunately, they’ve got me. I can’t make a call, I don’t want to give up my iPhone, so I’ll pay the $150 for the microcell. But all the while, I’ll hate them a little bit for it.
What to do?

While writing this blog post I called up AT&T customer support. They were polite and tried to be helpful, as always. Unfortunately they had no news on the possibility of any new towers or Microcell availability in my area. One thing I do have to say for AT&T is that their customer service has been great. So long as you’re polite, the AT&T reps will do their best to help you and throw a couple of bucks credit at you for you troubles. Unfortunately, they can’t build a tower or upgrade a network. So for now, I sit and wait as I have been for the past year.

Which brings me to the question of what do I do next? A lot of that depends on what’s announced at WWDC. I’ll have to see how magical and revolutionary the new iPhone 4G really is to justify me upgrading and how strong Steve’s reality distortion field is. Although I’m doing the best I can to mentally prepare myself for iPhone launch day and resist the urge to immediately pre-order an iPhone online, we all know there’s a pretty decent chance of that happening.

My iPhone 3G is adequate for my needs for now, but my AppleCare is due to expire soon and with the new iPhone 4.0 OS having limited functionality on the 3G iPhone, I’m really about due for an upgrade. At some point I’m afraid I’ll drop my 3G or it will finally die and I’ll have no choice but to buy a new iPhone. But for now, it’s adequate for my needs.

A lot also depends on the Microcell. Right now I don’t even have the option to use the Microcell, but I can’t help but wonder whether I could live with AT&T another two years if I could reliably make and receive calls in my home. This would alleviate about 80% or more of my problems. It won’t solve my problems everywhere, but it’s a start. Assuming of course I can actually buy it at some point.

Depending on the new pricing that is announced on the iPhone, it looks as though the cost of buying an iPhone at the subsidized rate and paying the early termination fee is a few bucks cheaper than buying a contract-free iPhone. I might also look at waiting a while and trying to pickup a refurb or gently used 3G S or 4G without a contract.

I’m sure I’m not the only one facing this dilemma. I’d be curious to hear what others are going to do. Leave a comment below with your thoughts.