Tuesday, December 29, 2009

It's All Just A Little Bit of History Repeating

This is a post about AT&T, but first I'd like to take a little peek at recent history.

Remember AOL? No, not the sad shell of a company that TW is finally having surgically removed. I'm talking about the AOL of the mid-90s. The muscle-bound, money-machine that scooped up new subscribers by the millions.

Well, way back in 1996, that AOL, anticipating an unfulfilled hunger for online-time, and anxious to scoop up even more subscribers, made a bold move and switched from hourly billing to flat-rate pricing for unlimited access. If you're old enough to have participated in those heady years of tech nirvana, you remember what happened. System traffic jams of unimaginable proportions. And they were unimaginable because even though AOL had done usage modeling, made informed predictions, and beefed up their server farms, they weren't even close. Usage demands surged past their most optimistic expectations leaving them reading headlines like "America Offline." There was almost nothing wrong with their usage modeling formula, they'd just neglected to incorporate one important data point: human behavior. This was an all-you-can-eat plan that didn't give you heartburn, so when users were offered an unlimited Internet connection for a flat rate, they did the logical thing. They just kept it running.

That same year, AT&T got into the ISP biz and launched WorldNet, also for a flat-rate. And, what do you know, they also ran into usage issues. In fact, by 1998, accessibility rates during peak times were so dismal that they infuriated their users (isn't it cute how some things never change?) by arbitrarily cutting them off after three hours. 

At first, Mike Keady, a company spokesman, announced that although it was a test, they'd probably make it policy. But he later withdrew that statement and said they'd study the results before making a decision. He explained that the policy was implemented to save the network from overcrowding. Now here's where it gets interesting. Keady said, "We implemented the time-out simply because some people are hogging the network. We found that 4 percent of users were using 50 percent of the resources." *

So, at long last, here's my point. AT&T's WorldNet experience was miserable to all involved, but shouldn't it have been instructive? Isn't it a fundamental rule of any organization to analyze failure and course-correct to avoid repeating costly mistakes? Guess not because in an extraordinary example of "a little bit of history repeating" (song credit: Propellerheads), AT&T seems to resurrected their 1998 script and has handed it to AT&T president and CEO of Mobility and Consumer Markets, Ralph de la Vega.

In response to dismal iPhone service, particularly in high-use urban areas like San Francisco and Manhattan, according to an AP report by Peter Svensson, de la Vega told stated a group of investors that while AT&T is upgrading its network, it's also giving high-bandwidth users incentives to "reduce or modify their usage." He said that 4 percent of AT&S's smartphone users were consuming 40 percent of their broadband capability, and "the company is [...] working on getting the data hogs to cut down their usage." OMG! It's deja vu all over again.

As an iPhone user who lives in Manhattan, I have a high level of interest in AT&T's service problems. Except, if I'm understanding Mr. de la Vega correctly, he's saying it's not AT&T's lack of performance at issue, he's saying it's actually my fault. That even though I'm paying a nice chunk of change for a service plan that includes Internet connection, downloads and data transfer, I should have understood that when they said "unlimited" what they really meant was, "unlimited up to the point where your selfish, bandwidth hogging habits begin to tax our insufficient broadband capabilities, silly girl."

OK, Ralph. My bad. But wait, remember 1998? When AT&T thought the answer to an overtaxed data network was to cut people off? How'd that strategy work out?

"There is fashion, there is fad
Some is good, some is bad
And the joke is rather sad
That it’s all just a little bit of history repeating"

History Repeating by the Propellerheads

1 comment:

Anonymous said...

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