The Day AT&T Learned Moore’s Law (it’s not when you think it was)
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Last weekend a story in the New York Times blamed the bad reputation of AT&T’s wireless network on iPhone technical problems, not the AT&T network at all. Going further, Global Wireless Solutions, a network testing company, said the AT&T network is actually faster than Verizon’s, backing to a certain extent AT&T’s now-aborted legal effort to silence Verizon Wireless commercials that said otherwise. I doubt this is actually the case. Last summer as my family and I wandered across the United States in our old Winnebago motor home equipped with two iPhones from AT&T but also cellular data from Verizon, I can say with some certainty that Verizon coverage was consistently better, no matter what the Times has to say.
But the real issue here, it seems to me, is the obvious gag order successfully imposed on giant AT&T by Apple. Now that part I believe.
Apple and Steve Jobs (they are one and the same) feel a tremendous need to control stories about them. No other computer company I know of has sued its own customers to silence them, yet Apple did just that a couple years ago. Steve Jobs now reportedly controls most of the copyrighted photos ever taken of him, which is why editors and TV producers keep using the same few shots over and over again. The company, too, imposes on its commercial partners a virtual gag order. That’s the case here with AT&T, which apparently isn’t allowed to refute Verizon’s network performance claims even if AT&T has contrary data.
I’ve seen this before. PortalPlayer (now part of nVIDIA) was under a similar gag order when I went there in 2006 to shoot a NerdTV interview. PortalPlayer designed the innards of all early iPods, yet the people I spoke with at the company weren’t even allowed to acknowledge that Apple was a customer, much less that it represented 85 percent of their business. “We aren’t allowed to say their name in any context,” my interview subject told me. “They want the world to believe that all iPod technology was invented in Cupertino.”
And so it is with AT&T where the wireless carrier reportedly could respond to Verizon’s claims but generally doesn’t because doing so might piss-off Steve Jobs.
That must be very frustrating for AT&T (unless of course, as I suspect, Verizon is correct in its claim to have the better network). But the kind of inferiority complex it implies — one that would have the company accepting such a galling deal from Apple — shows up near the end of a long history of bonehead moves by AT&T or by its earlier incarnation SBC — Southwestern Bell Communications — one of the original Regional Bell Operating Companies.
Consider, for example, SBC’s onetime ignorance of Moore’s Law, as described to me recently by a friend who used to work there:
“Do you remember Americast? It was a cable TV joint venture between SBC and Ameritech. I was involved in evaluating set top boxes for that mess. They finally settled on a box and in the telco tradition signed a contract requiring the manufacturer to make ‘the same box at the same price’ for 10 years. The execs who cut the deal thought they had really won big because (they were convinced) the cost of the box had to increase over the next ten years. But, they really signed a contract requiring the company to build a box that looked the same, had the same connectors and the same functionality for the next 10 years. Then I asked if they had figured-in Moore’s Law?
“They, being Telco Executives, had never heard of Moore’s Law. When I pointed out that the cost of the electronics in the box should drop by a factor of between 8 and 16 over that ten years, they denied that there could be such a thing as Moore’s Law or it would have shown up in all their other purchasing. About a week later my boss asked me to write a memo on Moore’s Law and hand deliver it — paper only — to the President of TRI, later known as SBC Labs, now a tiny part of what is left of AT&T Bell labs. I was later told that paper copies of that memo circulated widely among executives at SBC.
“SBC had a corporate purchasing culture based on the idea that everything gets more expensive over time. I guess that is an example of people who should know better investing in things they didn’t understand. In this case they had an entire building full of people who did understand the technology but were either not consulted or were ignored.
“The SBC executives didn’t believe they needed help because they were experts. I mean they had to be experts to become executives, right? ”
Right.
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