• by Mark Walsh  @markfwal, September 3, 2009

Smack in the middle of The New York Times home page today is a story on AT&T's 3G network straining under the load of data-gobbling iPhones, leading to dropped calls, slow download speeds and angry customers. The article has clearly struck a chord, zooming to the top of NYTimes.com's current list of most popular stories as iPhone owners email each other to celebrate the very public vindication of their collective frustration.

Certainly the story hasn't gone unnoticed in the halls of the rejuvenated Federal Communications Commission either, where newly-appointed chairman Julius Genachowski has already launched an investigation of the exclusive handset agreements for which the AT&T-Apple deal for the iPhone serves as Exhibit A.

John Donovan, AT&T's chief technology officer, conceded in the Times article that meeting the network demands of the iPhone in the last year has been "challenging." The story went on to explain steps the carrier is taking to upgrade service including putting up an additional 1,200 cell towers and improving existing cell sites by adding fiber optic connectivity to speed data delivery.

The changes are expected to be completed by next year. One lesson from AT&T's experience powering the iPhone is that if a carrier does have an exclusive deal on a hot phone-the hottest phone in AT&T's case-it better have the capacity to handle the heavier traffic load. The Times story points out that other networks could become strained as well by the growing use of more sophisticated devices.

Maybe so. But if the iPhone was offered by more than one carrier the burden of meeting its increased bandwidth demand would be shared by multiple networks, reducing the strain on any single operator. The major wireless carriers say they don't want to become merely "dumb pipes," selling voice and data services with little difference at commodity prices. But AT&T's performance with the iPhone has shown that even the smartest smartphones aren't worth much without a reliable, if "dumb," pipe to run on.