It obviously sounded like a good idea in 2007 when Apple and AT&T signed a multi-year exclusivity agreement but a few short years later, it became evident the agreement between Apple and AT&T wasn't turning out as planned.Wired has an in depth article on what went wrong. From a user perspective, it is easy to see the key issues. First, AT&T's network reliability wasn't up to the bandwidth burden iPhone users began to inflict on it. Unlike previous mobile devices, the first iPhone was a joy to use online. It had a browser that made all other mobile browsers look like Lynx by comparison.

The next generation of iPhone introduced the App Store and then the real downloading began, but this time at 3G speeds. Millions were sold and AT&T's network couldn't keep up. Nowhere was this more evident than at a convention or conference where techies were gathered. The iPhones in attendance could bring down all communications from the local towers.

Then the 3GS was introduced which included tethering and video messaging. This worked great all over the world, except for the United States, where AT&T blocked the two services to keep the network from melting down.

AT&T hasn't been sitting still of course. It just seems to be one or two steps behind the current demand from users.

Given the success of the platform, Apple felt it could dictate terms. The article states there were discussions to restrict high-bandwidth activities to WiFi, like YouTube. Apple wasn't buying it though. Why should they hobble their crown jewel? Unlike most carrier-hardware relationships, AT&T is the one that was unable to call the shots.

For the full chronicle thus far, check out the article. I am waiting for the book on this saga to be written. I am wondering if AT&T will finally get the network up to speed and resolve most of the issues or if Verizon will begin selling the iPhone and take enough share away from AT&T that their current network will be able to handle the traffic.