Why wouldn't iPhone automatically switch to Edge during a 3G outage?

Earlier there was a 3G outage in the Philadelphia, Southern New Jersey area. My iPhone 3GS would simply display "NO SERVICE" unless I turned 3G off. If I turned 3G off, the phone would start using Edge and would work. If I turned 3G back on I got "NO SERVICE" again. This was happening for a number of iPhone users in my office.

Someone else in my office with AT&T has a regular phone that supports 3G and it automatically switched to Edge when it lost 3G service. How come the iPhone doesn't do that?