Location: AT&T, 208 South Akard St , Dallas, TX, 75202 , United States
AT&T has stumbled into a quagmire. When it secured exclusive rights to support Apple's iPhone on its wireless network in June 2007, investors hailed the deal as a masterstroke. Here was stodgy, safe AT&T positioning itself to gulp profits from a cutting-edge technology. But AT&T and Apple vastly underestimated the iPhone's appeal. AT&T, which markets the iPhone in the U.S., simply can't handle the traffic.
The rise of iPhone Nation—with its media-savvy and data-greedy citizenry—has left AT&T with a tough set of options. It could significantly upgrade its network to handle all the new demand, but that would cripple profits. It could charge more for network access or limit what customers can do on their phones, but that would enrage the all-you-can-eat subscriber base as well as Net Neutrality types who seek to prevent telecom companies from dictating customers' options. It could permanently halt iPhone sales in overcrowded markets, but that would bring more mockery, not to mention place AT&T in the unusual position of denying consumers access to a product it doesn't even make.
To keep its uneasy equilibrium, AT&T is trying a little of everything: It's marginally increasing capacity while trying to squeeze network hogs and subtly reshape the definition of Network Neutrality.
