AT&T's $5 Outage Credit Has Sparked An Uproar, But Are We Expecting Too Much?

Last Thursday, over 70,000 AT&T subscribers had their cell service interrupted. Some customers lost service for up to 12 hours. AT&T is now offering a $5 credit for those affected as compensation. Understandably, not everyone is happy with this number, especially after discovering that the outage was caused by an error from AT&T and not some unforeseen cyberattack, as some speculated.

Many customers have taken to social media to make the case that $5 is insufficient. Customers argued that a five-dollar bill wouldn't even get you a cup of coffee in this economy. Questions have also been raised about if the government can get AT&T to cough up more dough.

Teresa Murray, the consumer-watchdog director at U.S. Public Interest Research Group, told MarketWatch that the Federal Communications Commission provides no recourse for such an event. The FCC is the independent government agency tasked with regulating telecommunications. Murray explained that there's no law that says ”if your cellphone is out for one day or half a day or a week, that the phone company must reimburse you X amount of dollars or X percentage of your bill." So, are people overreacting, or is $5 a reasonable payout?

Putting a monetary value on the service loss can provide some insight. J.D. Power says the average cellphone plan is $141 a month, or around $4.70 a day. In theory, AT&T's compensation is enough for someone who lost even 12 hours of service. However, not everyone was impacted the same by the outage. Some may not have noticed it at all. Others may have experienced a significant negative impact. 

For example, some may have missed out on business opportunities because of the outage and lost money. AT&T also put some customers in the more serious situation of being unable to contact emergency services. AT&T CEO John Stankey's letter to employees following the incident acknowledged this issue, saying, ”Outages sometimes have outsized impacts on some subscribers that may be greater than the face value of the credit."

Even if $5 makes sense to some, there were still jokes going around that the cell company would simply raise everyone's bill next month to recoup the money. This would be a form of cramming, where a cell company adds charges with vague words such as "service fee" or "membership" on a bill. Still, if you are eligible, the $5 credit will automatically get added to your AT&T account within two billing cycles, whether you think it's fair or not.