Hope FCC can rein in Apple, AT&T

IPhone display at an Apple store in Santa Clara, Calif. (RJM Photo)

 I’ve been following the uproar this past week over Apple kicking Google Voice out of its App Store, some say at the behest of carrier AT&T Mobility. Now it seems the FCC has heard that uproar.

The Federal Communications Commission announced Friday it is opening an informal inquiry into why Apple removed Google Voice and some related applications from its App Store, according to a report in the Washington Post. Google Voice allows people to make calls and send text messages using a technology called voice over Internet protocol (VoIP). Google Voice issues a separate number to the user from the one assigned to the phone by the carrier, thus bypassing the AT&T wireless network. AT&T is the exclusive carrier for customers who own the coveted Apple iPhone.

"Recent news reports raise questions about practices in the mobile marketplace,” stated Julius Genachowski, the new chairman of the FCC, in the Post story. The FCC, he added, "has a mission to foster a competitive wireless marketplace, protect and empower consumers, and promote innovation and investment.”

The controversy started earlier this week when several news outlets, tech blogs and Web sites erupted with the news that Google Voice, which had been available on the App Store, had since been removed, along with third party applications that incorporate Google Voice. The App Store also has restricted Skype, another VoIP service, and SlingBox -- a service that lets a user view TV shows recorded on their home entertainment system from anywhere they can access the Web -- so they can only be used on an iPhone if the user is in a Wi-Fi hot spot, not on the AT&T network.

Apple and AT&T do not seem to have the public on their side on this. A poll conducted on The iPhone Blog shows that 79 percent of respondents want the FCC to investigate. Only 8 percent felt the FCC should stay out of it.

“Apple [and] AT&T are obviously being anti-competitive with this and it’s the FCC’s job to make sure this kind of foul play doesn’t go unheard,” stated one poster.

The two companies even lost the support of one of the leading tech bloggers in the industry, TechCrunch’s Michael Arrington, who wrote yesterday “I Quit The iPhone.” To me, this is the equivalent of Pres. Lyndon Johnson’s response to the late Walter Cronkite’s calling for an end to the Vietnam War: “If I’ve lost Cronkite, I’ve lost Middle America,” Johnson said. Substitute Lyndon Johnson with Steve Jobs and Walter Cronkite with MIchael Arrington and you get the picture.

John Britton, an AT&T spokesman in San Francisco, says Apple decides what merchandise sits on App Store’s shelves, not AT&T, according to a story in this morning’s San Jose Mercury News. But Britton declined to tell The Merc whether AT&T advises Apple on which apps may not be acceptable to AT&T.

What’s added to the controversy is AT&T’s apparent double-standard when it comes to Google Voice. BlackBerry smartphones from Research in Motion Ltd. can run Google Voice by downloading it from another application store, even if it runs on the AT&T network.

The FCC probe is preliminary; the agency is just asking Apple, AT&T and Google for information about the rejection of Google Voice from the App Store. But this move follows a previous FCC announcement of an investigation of exclusivity deals between carriers and device makers. Besides the AT&T-iPhone deal, the commission is also inquiring about the exclusivity deal with Sprint Nextel and the new Palm Pre smartphone.

Industry analyst Julien Blin of JBB Research views the controversy with skepticism. On his Facebook page, Blin wrote: “If you guys think that Sprint Nextel/Palm will adopt Google Voice, keep dreaming! Why would they? They are not stupid. They don't want to damage their voice [average revenue per user].”

Yes, the whole point of a carrier selling a smartphone is so the user racks up minutes on their voice plan. If the customer is using VoIP, they may go with a lower minutes plan than a higher one, much to the dismay of the carrier.

My take on this is that VoIP is an innovative technology that has changed the communications business for the good. Services like Google Voice and Skype enable people to communicate more affordably globally and spur economic development. For Apple to push Google Voice out of its App Store, like it broke iTunes synchability on the Palm Pre, both come off as spiteful power grabs. And AT&T’s claim that it was not involved in the Google Voice decision comes across as disingenuous.

(Palm found a workaround to restore iTunes synchability. Your move, Apple.)

It’ll be interesting to see how the FCC probe turns out. The public does own the airwaves on which wireless carriers operate. The commission has to keep pace with innovation as it moves from radio to television to telephones to wireless.