well the problem is that the phones are GMS and they get there timing from the base stations. CDMA phones are GPS based and the time is very close to NIST. The base stations have to have lock on 7 satellites before it can go operational so the timing is very accurate.
Definitely an AT&T issue. I noticed my clock was correct, then suddenly, it was 2 hours and 3 minutes ahead all on its own! I checked my friend's AT&T Treo and the time was exactly the same as the iPhone. It eventually corrected itself.
Since when set to automatic, the iPhone gets the time from the local cell tower, if anyone is finding it in error by a degree that is problematic, simply set the time to manual in the Date and Time settings pane.