At issue are the data plans that never amounted to much for wireless companies until smartphones and specifically the iPhone came on strong. All of a sudden, data networks are being pushed harder than anyone ever expected. AT&T was particularly caught off guard by this and their iPhone service suffered badly.

Now, a secondary problem has arisen in that many people have several data intensive devices on their wireless accounts. A smart phone for the husband, one for the wife and a tablet. Each of these devices requires it’s own $25-30 a month data plan. This is pretty cumbersome and expensive. I have been a proponent of shared data plans for a long time now. In the same way you share phone minuets you will soon share a pool of data.

The industry, which always seems to work together on these things, thus eliminating the competition factor has decided to use the shared data pool to change the game completely. Instead of the usual unlimited data for your $30 a month, you will now have to buy into a tired system of data. The larger the data pool you want, the more expensive it will be. I totally get this model and understand it from a business perspective but here is my worry. When data was unlimited, customers did not have to worry or think about anything. They could download and run all types of applications including streaming music and video services. It’s part of what made the smartphone take off so fast. Now, if customers have to be counting bits, it’s going to put a big freeze on certain apps and innovation that will take up too much data. Mobile, Internet connected devices are only as good as the data connection they have. Capped bandwidth could have a drastically negative effect on the adoption and use of connected devices. It’s like we’re going backward. Customers are now getting less bandwidth for more money.

As far as marketing goes, these location aware connected devices hold the greatest promise for a next generation of personalized, localized marketing. Marketers should want nothing more than the most number of people possible walking around and using a wide variety of connected devices. Wireless service is already ridiculously expensive (have you looked at your bill lately?). Here’s hoping the wireless industry doesn’t commit hari-kari like the music industry did.

The latest and perhaps most shocking example is the story of Giorgio Galante, an AT&T customer who wrote emails to AT&T CEO Randall Stephenson in part to complain about several aspects of his AT&T experience. After the second email in as many weeks, Giorgio received a phone call from AT&T’s “Executive Response Team” thanking him for his feedback and at the same time warning Giorgio if he continued to email the CEO he would be served with a cease and disist letter. Threatening your customer with legal action because he tries to communicate with an officer of the company is so shockingly dumb I am at a loss for words. Is that what they teach you at B School?

It’s not the first time, however, AT&T has acted in such a way. As they were being barraged by complaints about the poor network service AT&T said it was the customers who were using too much data and they would have to look into doing something about that. Yes, our service stinks and it’s your fault mr. customer, so I will have to find a way to penalize you for that. And in fact, AT&T has now found that way, this week announcing dramatic changes to their data plans for smart phones like the iPhone. Unlimited access is gone and customers now much choose between two data plans, both with data limits and charges for going over the limits.

How does AT&T get away with this nonsense? Because they have the iPhone, the most popular cell phone in the world and you cannot buy it from anyone else. Apple may have signed a pact with the devil on this one and like it or not, there is some blowback that Apple suffers from all this as well.

I believe something needs to change drastically in the mobile world. We can no longer allow companies to sign us up for long term (2 year) contracts and then treat us so poorly. Since all the mobile companies seem to be in league with each other on most of these egregious practices, it’s going to take some kind of government action to step in and fight for the American consumer.

In the end, I don’t know what AT&T is thinking on this one. Is Giorgio Galante a pest? Unnecessarily filling up an important CEO’s email with trivial complaints? I don’t care if he is a nusense . He’s a customer, he has a right to be a nusense. He deserves to be treated with respect. He deserves an answer to his questions, not a threat of legal action.

Image via Wikipedia

NBC took a big gamble when they moved Jay Leno to primetime and it obviously hasn’t worked out. Now they are canceling the prime time show and contemplating putting him back to late night, which itself is complex now as they gave his old job to Conan O’Brien.

What caps my hide about this story, however, is the way NBC has handled the news. NBC has said the show “didn’t meet affiliates’ needs” and that the show performed “exactly as we anticipated on the network.” NBC is saying here, it’s not our fault, the show was fine, blame the affiliates. The painful truth, however, which is clear to everyone is that the show wasn’t very good and very few people were watching. Critics didn’t like it and the general buzz was bad. So if the show really performed “exactly as we anticipated on the network.” that’s pretty sad and it’s no wonder NBC is the last place network.

I don’t know why companies feel they cannot admit failure. Customers will not punish you for failure, only continual failure and an inability or lack of desire to fix things. This is why AT&T is taking such a beating lately. Their network is failing in certain cities and they have been slow to correct the problems and even admit the seriousness of them. That’s what people are most upset about. Admit openly and honestly you have a problem and than get on it. Customers will be patient, for a time. But if you will not admit your failures and you issue trite press statements that smack of ridiculousness in the face of the facts, you will be punished. We are in a very media savvy society; people understand the game now. It would have been so easy for NBC to say something like, we are constantly innovating and pushing the envelope with our content. Jay Leno in primetime did not work the way we imagined so we are changing things up. We anticipate an exciting new line up, including our popular late night programming.

Bill O’Reilly likes so say his show is a “no spin zone”. The entire world is a no spin zone now. PR people are traditionally trained to control the story, even guide it if you can. A traditional PR approach to this NBC/Leno story would be to control the damage on what is basically a negative for the network. But of course the problem is there is no control anymore and there doesn’t even need to be any damage. By admitting your own failure and presenting a plan to correct things and move forward you take away the very weapon others could use against you. When the emperor has no clothes, he shouldn’t parade around as if he does. It’s a new media world now and we can all see you naked.

AT&T has been in hot water with their customers lately. Spotty network coverage in critical areas like San Francisco and New York have customers angry. Add to that comments made by AT&T CEO of mobility last week that blamed customers and their heavy data usage for the problem and things are just getting worse.

Dan Lyons of Newsweek who writes as “Fake Steve Jobs” wrote a blog post positing that if iPhone users all used data heavy apps at the same time on a particular day it would choke the AT&T network as punishment for their poor service and lack of respect for customers. Dan may have written the post with tongue in cheek but some of his readers think it’s a great idea and it’s been gaining steam across the Internet.

Teachable Moment

Parents often call this a teachable moment, and if this plan goes off it certainly will be.

Lesson 1: You cannot hide from your customers anymore. All of your faults will be exposed and spread widely among friends and foes. The opportunity is in your reaction and response.

Lesson 2: Be very careful what you say because customers are listening and your words will be amplified and once again spread widely. AT&T’s implication that they may penalize customers for heavy data usage went over like a lead balloon and was the spark for this latest outrage.

Lesson 3: Never, ever blame your customers for your problems. Payback’s a bitch so they say and your customers have many ways to hurt you now. A nasty letter to the editor is the least of your problems.

Part of the problem with the iPhone is that it is a GSM technology phone, so it will not currently work with Verizon or Sprint. Apple would have to develop a new handset altogether. If the new generation iPhone is LTE, however, this would open up a world of possibilities as it would be technologically compatible with most vendors. I think at this point we may see the ending of the long standing exclusive arrangement with Apple and AT&T. And if Apple ships the phone before AT&T can roll out it’s LTE network, AT&T stands to loose a great deal of customers. AT&T has been running at least a year behind Verizon technologically for the past several years, so I see a dark future for AT&T. AT&T’s customer satisfaction has also been plummeting lately due to their inability to handle the iPhone as it is today.

Bottom line: Apple and its’s customers stand to be big winners and AT&T stands to be a big looser unless AT&T can latch onto another phone that knocks the iPhone out of the box.

I don’t understand why they need to put these kind of restrictions on the service. My other favorite coffee shop, It’s A Grind, provides free open access, no questions asked. And when I am there, I always buy a coffee. The Starbucks program reeks of corporate think. Let’s look at all the risks and mitigate them. God forbid we trust our customers because given the chance they’ll rip us off. 98% of Starbucks customers will buy a coffee while there, so there’s no real reason to require it with the card and how many will sit there all day and suck access? Not many. And those that do are going to be thirsty and hungry and will most likely buy more stuff. I would rather see Starbucks and AT&T trust customers to begin with and apply restrictions in the future if real problems surface. But like the music and film industries, corporate America still feels the need to control their customers and has a basic lack of trust for them. This, of course, runs completely contrary to the spirit of the Internet and the new world of business online. Maybe, just maybe if you treat your customers with respect they will give you back the same.