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AT&T Addressing Network Performance in Manhattan and San Francisco, High-Bandwidth Users

The Wall Street Journal reports that AT&T Mobility CEO Ralph de la Vega noted at an investor conference today that the company is continuing to work to address network issues in Manhattan and San Francisco, areas with high densities of iPhone and other smartphone users who have been experiencing subpar performance.

Those two cities see especially high smart-phone penetration, which has put pressure on AT&T's data network. The company expects to see gradual improvements in New York and plans to replace some microcells in San Francisco, he said.

"This is going to get fixed," Mr. de la Vega said. "In both of those markets, I am very confident that you're going to see significant progress."

Despite recent improvements centered around deployment of the 850 MHz spectrum in many of AT&T's markets, complaints have continued to surface, with Apple support staff even apparently acknowledging that a dropped call rate of 30% was considered normal in New York City.

De la Vega also addressed the ongoing issue of high-bandwidth smartphone customers, noting frequently-cited data showing that 3% of smartphone users are responsible for 40% of data traffic. In response to this issue, de la Vega reiterated AT&T's general plan to "incentivize" customers to reduce their data usage.

With about 3% of smart-phone customers driving 40% of data traffic, AT&T is considering incentives to keep those subscribers from hampering the experience for everyone else, he said. "You can rest assured that we're very sure we can address it in a way that's consistent with net-neutrality and FCC regulations."

While specific plans have yet to be rolled out, de la Vega suggested that simply offering users greater insight into their bandwidth usage has been shown to reduce their demand. Over the longer term, however, AT&T is likely to shift to usage-based pricing, although any such changes would be based on industry standards and competition and on regulatory guidelines.