It seems anybody with a 2G cellphone will be affected, that includes first generation iPhones.

---Quote---

Cell phones, like other wireless communications devices, have
certain radio bands they communicate on. While previously the company
had been primarily relying on the 850 MHz band that offers a more
robust signal, including superior indoor reception, company technicians
confirmed to OFB that transmitters for the 2G signal used by the original iPhone and most other handsets, including most AT&T offered BlackBerry and RAZR models, have been shifted to the weaker 1900 MHz band in some areas.

This shift has resulted in customers past their 30-day return
policy, but still with relatively new phones, finding themselves stuck
with equipment no longer able to pick up signals properly in previously
strong coverage areas, even though the equipment itself is without
defect.

---/Quote---http://www.ofb.biz/safari/article/512.html

It only "helps" in the way that it gives At&T more resources to build their 3G network, however according to this second source AT&T denies the claim.

---Quote---

"I can say that this story is complete bunk. I work for at&t as a
cellular network tech and we are in no way making an 850 site a 1900 it
is far to costly there is plenty of spectrum for both sites to use the
850mhz. While there may be a few sites out there that have moved to a
1900mhz sites they would be few and far between. The issue is air
rights for one and second our sites are far to costly to change bands
on. We are talking radios/antenna's/tower mounted
amps/combiners/multicouplers etc... I love how holding two phones
together is his testing. UMTS cell phones use multiple sites at once
and that improves things greatly (just like good ol CDMA) I cant see
how this guy can make such a huge generalization."

---/Quote---

Source(s):
http://www.ofb.biz/safari/article/512.html
http://www.dslreports.com/shownews/ATTs-2G-Customers-See-A-Downgrade-99995


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