The company's MicroCell, a mini-cell tower that resembles a modem, works with a user's broadband home connection, easing the load on the wireless carrier's network while providing a better signal within a 5,000-square foot area.
AT&T is running a trial of the device in Charlotte, N.C. There are two pricing plans. The first is $150 for the MicroCell, with no additional monthly charges. The second is $50 for the device (after a $100 rebate) and a $20 monthly plan for unlimited calls made using the device for subscribers with Individual or Family Talk plans, said Steven Schwadron of AT&T.
"With this program, AT&T is offering customers more choice," he said. "In this case, it is a good option for customers that previously had no solution for better wireless coverage, no matter how many billions are spent on the macro network."
But some iPhone users are angry about the idea of having to spend more to get the kind of service they feel they're already paying for and should be getting. The least expensive monthly plan for an iPhone is $69.99 for 450 voice minutes and unlimited data. Text messaging is extra.
"Since this is something that's designed to fix holes in AT&T's coverage, I fail to see why I should pay $19.99 a month for the darn thing," wrote Michael Santo, editor-in-chief of RealTechNews.
"This is ridiculous," wrote an iPhone user on the MacRumors.com forums. "I live in Los Angeles and still get horrible service at my house. So now I'm supposed to pay more money because AT&T can't get its act together?"
Another person, from the Charlotte area, purchased the MicroCell and is pleased: "Setup and activation took less than an hour, and now I have 5 bars throughout my house where as I used to only have 1 bar of 3G," he wrote on the same site.
Easing the network burden
"Seems like you should be able to charge AT&T for a 'Broadband Usage' charge since they are using your broadband to get the signal into your home, which is what you're already paying AT&T for in the first place," said Allen Nogee, In-Stat wireless and infrastructure technology analyst.
"For AT&T, every (MicroCell) purchased by a customer is coverage and capacity they don't have to provide, and backhaul they are getting for free."
The MicroCell will work with iPhones, as well as other cell phones from AT&T. But AT&T is the exclusive carrier of the iPhone in the United States, and its popularity is a double-edged sword for the company.
The phone is a huge seller, but with its data-intensive capabilities and programs, it also adds to the load on the company's network. As it is, some iPhone users complain of network slowness or inability to get reception at all.
Service may get slower. Starting Friday, users of the iPhone 3G will be able to send photos and audio clips along with text messages, and iPhone 3GS users can also attach video clips. Multimedia messaging, as it's known, is a feature that many other phones have had, but has been slower in coming to the iPhone.
Apple made the feature available in June with the release of its iPhone 3.0 software, but AT&T set Sept. 25 as the MMS launch, with the company saying it has been working "for the past several months to prepare our systems and network to ensure the best possible experience with MMS when it launches."
First 3G 'femtocell'
AT&T's MicroCell — also known generically as a "femtocell" — is one way of relieving some of the burden on the wireless carrier. In the past year or so, femtocells have started being used by other wireless carriers, including Verizon Wireless, Sprint and T-Mobile.
But none of their devices are capable of handling 3G — or third-generation — wireless service, which can better deal with intensive uses such as Web surfing, e-mailing and watching and sending videos.
Mark Siegel, AT&T spokesman, said there is no timetable on how long the Charlotte trial will last, and doesn't know "when we might move into other markets."
Femtocells can be plugged directly into a cable or DSL modem, or a wireless router.
While femtocells may be a solution for some, "If a user doesn't have good coverage in their home, then they need to ask themselves, how many other places might coverage be lacking where a femtocell is not going to help me, like when I'm in the mall, or my office, etc.?" Nogee said.
"If coverage is mainly lacking in your home, and you have dropped your wired phone, then maybe a femtocell is a good answer for you, since you are already saving money by eliminating your wired phone."