I know I am connected to 700Mhz but wouldn't 700Mhz have better coverage than 850Mhz since it's a lower frequency so it's able to handle distances and building penetration better. I think the older phones were tri-band meaning they only did 900/1800 and 1900 and later 850 was added to the phones since Cingular added 850 to their towers before the AT&T Wireless merger. AT&T Wireless actually spin-off from AT&T Corp and then when SBC bought AT&T, it seems like they all became part of AT&T Corp again.
Better coverage perhaps, but slower speeds, although LTE on 700MHz is going to be faster then EVDO Rev. a on 850MHz. Again, I can't say for sure, but moving customers from an optimized 850MHz network to two new bands could result in a very different customer experience. I watched Verizon re-do an Alltel tower next to the building I worked in at the time. Adding 700MHz involved messing with all of the antennas on the tower. Not sure why that was the case, but I could see it impacting reception.
Cingular had 850MHz assets in a lot of the SBC territory, while PacBell and BellSouth were largely 1900. AT&T also had both 850 and 1900, depending on the region. When AT&T merged with Cingular, they were forced to divest themselves of a lot of 850MHz where they had both A and B side spectrum. Oddly, Verizon was not subject to the same requirements when they bought Alltel.
AT&T Wireless Services - Wikipedia
History of AT&T - Wikipedia
AT&T Mobility - Wikipedia
It is a complicated history, but it is almost like AT&T was never split up.