Why Won’t AT&T Admit to Its Wireless Network Problems?

ref_iphone3g_pairLast summer, when Apple (s AAPL) introduced its 3G iPhone device, I brought up the issue of AT&T (s T) not being ready for the data usage brought on by the data-centric touchscreen phone. Company officials of course denied having such problems, assuring me that they were ready.

Ready or not, a lot of people signed up for AT&T’s service, and many were soon disappointed by the lack of backhaul bandwidth. For me personally it got so bad, that I switched away from the iPhone (which I love, by the way) to T-Mobile’s 8900 BlackBerry and a plain old phone from Verizon.

AT&T keeps denying that it has any network bandwidth problems and continued its state of denial in an article in the New York Times this past weekend. Kristin S. Rinne, senior VP of architecture and planning for AT&T, blamed the phones and the chipsets on handsets for some of the problems.

Bad news for them – the article coincided with the South by Southwest (SXSW) Festival, which is attended by hordes of iPhone-totting early-adopter techies. AT&T’s network choked and suddenly everyone was up in arms. And then Ma Bell got in touch with Stacey, who reported that AT&T was boosting its network capacity.

How did they do this? By switching on 850 MHz band on eight cell towers to blanket the downtown Austin area. This was in addition to the existing capacity on the 900 1900 MHz band. AT&T is going to make the same arrangements in San Francisco and New York by end of 2009, AT&T Mobility CEO Ralph de la Vega told Engadget.

This move to fix the bandwidth issue is a clear sign that AT&T knows it has network problems. It is time for the company to step up and acknowledge that this is indeed the case, and make a clear and coherent statement on how it is fixing it. By not doing so, it is clearly selling 3G phones (iPhone and BlackBerry Bold) under false pretenses. I think this is where the new FCC should step up to the plate and force their hand!