The Reason Why AT&T Sucks Is Important - Ordinary Times

This week my family and I will be firing AT&T as our cellphone service provider. I decided to write about this decision as well as its complete lack of vendor consequences for two reasons. One reason, obviously, is my rather pitiful and bitter attempt at personal catharsis. But the second reason is that AT&T actually serves as a great illustration of how the social benefits we attribute to our “free market system” evaporate once corporations reaches a certain size.

But before we get into all that meta, let’s take a moment to make this all about me.

This past April my wife and son stopped in an Oregon AT&T store to pick me up an iPhone cable. While there, a saleswoman approached them. Did my wife know that AT&T had new, lower rates that might save us money? Did she have just ten minutes to do a customer-profile review and see if we could lower our monthly bill? Though it took quite a bit longer than the promised ten minutes, it seemed to have a happy ending: The AT&T representative signed us up for a new plan that would cost $80 less a month and give us an additional five gigs of data download. Hurray for us!

Fast forward three months, multiple phone calls, an online “smart-chat” and an in-person stop at an AT&T Retail location to talk to someone face-to-face, and it appears that today those changes will (maybe?) finally be implemented.[1]

Without dipping too far into the pages of notes I’ve kept trying to keep track of what various AT&T folk have told me on any given day, there are basically two ways you can look at our wireless account. One way to look at it — the one I am obviously inclined to take — is that our family was over-charged $80 for each the past three months, and that we racked up nine $15 overage penalties we never would have been charged had the change been made as promised. (That, for those keeping score, comes to about $375.) The other way to look at it — and, to be fair, the way that AT&T’s contracts do indeed state we should — is that they can charge me whatever they like in these circumstances and so there isn’t technically any overcharging being done. There are more details than that, obviously, but they aren’t so material to my larger point. Well, except maybe this last one: A month ago, they did promise to credit me $50 for my trouble. And while they technically did this, they also added about $50 in debits to my bill so that the goodwill half-Benjamin I was expecting wasn’t ever realized.

When I finally went into the retail store, I sat for over an hour while the manager poured over our records.  Eventually, unable to figure out why AT&T was charging what me what it was under the circumstances, the manger just picked up his phone and called the AT&T customer service center. We were both told by a manically peppy woman on speakerphone that, effectively, I could go blow myself. At the end of this interaction, the woman on the phone asked me if I felt fully comfortable with my interaction with AT&T. I answered truthfully that I now felt pretty comfortable leaving AT&T. The woman on the phone, who was obviously not paying attention to my actual answer, read from a script and cheerfully thanked me for continuing to choose AT&T. (The store manger had the common decency to be completely unable to look me in the eye after that.)

And here’s the thing: I truly went in with an attitude that if they gave me anything — anything — I would be willing to stay. I tend to be a loyal customer, and over the past six years my professional relationship with them has been delightfully out-of-site-out-of-mind. They didn’t bother me; I didn’t bother them. Also, there is this: had a salesman not pitched a new plan to my wife in April we’d have never had our expectations changed.

In fact, it’s kind of ridiculous how little it would have taken for AT&T to keep me. A free phone case thrown in for the phone they were trying to sell me to replace my son’s defective one would have done it, certainly. But so too would just this: An apology by anyone I spoke with, or even a remark that even though their internal systems weren’t made to help people in my situation, an acknowledgement from someone that it kind of sucked for me. But none of those things happened, and the reason they didn’t is this: No one at AT&T really cares if I’m a client or not. They don’t have to.  And the reason they don’t, ironically, is because that’s the way the free market — the real one, not the one on paper — actually works in a large democratic society.

The way we’re encouraged to think about the free market is that, on the whole, it inadvertently creates socially positive outcomes for consumers.   If a company offers consumers one price and then charges them another higher price, consumers will go elsewhere. Because of this, the companies that provide poor service or less than honest tactics will suffer financially and be forced to either change their practices or suffer financially — perhaps even to the point of going out of business. This, to a great extent, is the quid pro quo we all sign up for in a capitalistic society.

But with a company the size of AT&T, there is little downside to providing poor and/or dishonest service. Consumers enter contracts that tie them to the company over long periods of time, and most of the overages charged — mine included — are of a size that make it cost more to change (or challenge in court) than to put up with over time. And unlike, say, a small start-up tech company, the regulations that limit the kinds of recompense consumers can and cannot demand from AT&T in almost any situation are written by AT&T.

But for the sake of argument, let’s stipulate that occasionally someone like me actually decides it’s worth the hit in the pocketbook to break contract and leave.  What’s more, I might tell all of my friends.  (Or — who knows? — maybe even write a blog post!)  How might AT&T shelter itself from those kinds of customer losses?

Well, they might take solace in the various subsidies their lobbyists help secure from the government, such as the $14.5 billion in tax subsidies they were awarded between 2008 and 2010, or the additional $1.3 billion they were given to help capture market share in rural areas during that same period, or the $420 million taxpayer-funded tax refund they received in 2011 after paying zero in federal taxes.

What reason, then, does AT&T have to respond to customer complaints, other than to fulfill their minimum regulatory requirement of acknowledging that someone has one before telling them to fish off and stop bothering them?  The answer, of course, is “none.”

At their size, AT&T no longer makes-or-breaks its bottom-lines in what we consider “the traditional marketplace.” With their massive $128 billion annual revenue stream, they now follow that other business model. As with Comcast, Time-Warner and Verizon, what AT&T’s actual customers think of them has been rendered irrelevant by a separate marketplace, one in which only those with a certain amount of wealth can partake. Why spend money on satisfying the consumers, when they can spend pennies on those dollars to ensure the system is rigged so that they don’t have to?

Of course AT&T doesn’t care if I come or go. They don’t have to.

This, when you get right down to it, is the ultimate inherent weakness of the market system in a nation of 300 million. It just is. Sure, different people will try to sell you their political cure-alls. One guy over here will tell you that if we just add the right regulations all will be well; another guy over there will promise that if we just strip away enough  regulations these things could never happen. And somewhere else, I’m sure there’s some other guy has some magic fairy dust he’d like to sell you. They’re all wrong. In a system that rewards greed, greed wins out. Period. Doesn’t matter what the political stripes of the people in charge are, things are what they are: a round thing is a round thing, a wooden thing is a wooden thing, and system built on greed is a system built on greed. It just is what it is.

That being said, if anyone can recommend a wireless provider that deserves my business — as opposed to having simply greased the right palms to be handed it — I’m all ears.

[1] There was also this added bad-service bonus: This week my son let me know his phone’s wi-fi wasn’t working. We took it to the AT&T store to see if it needed servicing. We were told it needed a $15 part, and with that it would be just like new — and if it wasn’t, they would swap out the phone for a new one. We bought the part, and then sat and waited. After about an hour, the AT&T guy let us know that:

1. The phone was broken and couldn’t be fixed, and

2. He couldn’t refund us the $15 for the part we just bought, and

3. He couldn’t swap out the phone, because this phone was one that replaced a defective new phone in March. That original defective phone had a 1-year warranty, but — as we would have known if we’d read the fine print of something at some point — this phone only had a 90-day guarantee, which had expired last month, and

4. They would be happy to sell us a new phone with an extended contract for the low, low price of $199.

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