$250 is AT&T’s new penalty to loyal customers for upgrading with each new release of the iPhone. AT&T’s change in policy to extract this extra fee seems especially unreasonable while they still do less well than their competitors with more dropped calls, slow downloads and spotty coverage in any part of San Francisco with lots of geeks, hipsters or hills.

So if you have an iPhone 4s, what should you do? (Here’s the best explanation I can find for eligibility to upgrade.)

Since the first iPhone upgrade, every year when Apple releases a new phone, AT&T has given it’s best upgrade pricing to those who bought the latest model when it was released.  I know, because I’ve bought that phone for that price every year (except the year Apple had systems problems and had to make an exception and give me one free in order to sell it to me at all). One year they threatened to charge more (for 3GS owners upgrading to the 4), but folks raised so much stink that they went back to the old policy.

Perhaps because it is an election year, AT&T really sounds like a politician here. It simply denies inconvenient truths, and sticks to its guns even in the face of facts.

They’re telling me that you have to pay a $250 early upgrade fee and that has always been the way it works.  I calmly but repeatedly asked the supervisor I spoke with at AT&T if he could get someone to explain why the change, and to possibly make an exception for me.  I said I’d be happy if he could just pass the message up and have someone get back to me. He kept denying that there has been any change, insisting that this is the way it has always worked, at one point taking offense and accusing me of saying he didn’t know his job.

As an AT&T customer since before the iphone I’ve paid them about $10,000 for my individual service bills since I got my first iPhone.  Though I pay for a (grandfathered) unlimited plan, I’m a moderate user, with a couple hundred minutes, a bit over 100 text messages, and about 2 gigs of data a month. So the extra $250 is just a blip of noise in the overall expense.

I just wouldn’t care about giving them the extra $250 if AT&T consistently gave me good service. But I’m still frustrated with their dropped calls (though thanks for reducing them by 35% in SF according to one of their recent local billboards), slow data (I’m amazed at how slow downloads and spotty coverage in any part of San Francisco with lots of geeks, hipsters or hills. Despite having one of their microcells, I can’t get good coverage at home (the microcell never seemed to work consistently as signal strength from nearby towers goes up and down so rapidly by demand that you can’t consistently stay on the microcell, and it’s the handoff that often drops).

So it was damn tempting to switch to Verizon or Sprint when it looked like it would cost the same $250 to drop AT&T that they are were going to charge me anyway. In fact, if I can get some good data on the Verizon iPhone 5 experience in San Francisco that says it is considerably better, I’ll still switch anyway.

Here’s what It seemsAT&T will do (if you call in and escalate to a supervisor) is give you 6 months messaging credit.  If you have unlimited text messages, that offsets about $120 of the upgrade fee.  I went ahead and went with that option for now. (You have 30 days to return the phone if you aren’t satisfied with it.)

For me, I’d probably do fine on Verizon’s unlimited minutes, unlimited message, 4gb data plan for $110 per month.  That’s actually $10 cheaper than what I pay AT&T (who throttle unlimited data users when they hit 3gb per month anyway).  Well, maybe $5 cheaper (I have a corporate discount with AT&T, but they don’t apply it to my voice minutes, so I get 21% off messaging and data).  Sprint is even cheaper, but it looks like they have spotty and slow LTE (and much slower where you can’t get LTE)

Honestly, even with their small concession, I hope I don’t regret not switching.

Does anyone know how the Verizon and AT&T LTE networks are likely to survive the onslaught of iPhone 5s in San Francisco and in other major cities?  All the network maps I can find don’t seem to provide specifics for LTE.

If you’re an AT&T user with an iPhone 4s, what did you decide to do in terms of upgrade vs. wait or switch carriers altogether, and what was your reasoning?