This Thursday, the FCC will have it’s regular Thursday meeting. However, reports indicate that one of the items to be discussed will be a full-blown investigation into the mobile Internet, with the goal of protecting the consumer. What kick started this? On Saturday, Bena reported on the letter sent from Apple to the FCC, defending its actions regarding the Google Voice application. This has developed into a complex story, with four large entities involved. The FCC, Google, Apple and AT&T are now at the centre of a feeling that has been growing globally – that iPhone exclusive deals with operators could not only lead to anti-competitive behavior, but seriously damage consumers themselves. In this article, I’ve tried to boil the story down to its basic elements, and take a look at what it could mean.
What started all this?
At the end of July, it was reported that Apple had rejected the Google Voice app for the iPhone. Questions were immediately asked about whether this had been a result of interference from AT&T – the holder of the exclusive iPhone contract for the USA. Google Voice would allow all voice-calls from a user to be made at lower rates through Google. It couldn’t bypass AT&T completely, but it would have both reduced revenue and rendered AT&T into just being where you buy your data from (the dreaded “dumb pipe” scenario).
The FCC had obviously been waiting for a chance to tackle the iPhone issue, as it immediately issued questions to the three companies involved – Google, Apple and AT&T. The response from each company makes for damn interesting reading.
What does Apple have to say?
The main thrust of the FCC questions to Apple was to ask why it rejected the Google app, and if AT&T had anything to do with it. First of all, Apple claims that it has not rejected the Google Voice app. It hasn’t approved it yet, but Apple says it is still examining the application. It goes on to explain why it has problems with the Google Voice app in the first place – because it hi-jacks Apples highly popular smartphone interface. The essence of the problem is that the iPhone has the first smartphone interface that really connected with the public at large. Understandably, Apple is extremely protective of this interface. It claims that Google Voice would replace many of the iPhone core functions with Google functions instead. Is anyone surprised that Apple would object to an app that essentially transforms its most prized product from an Apple phone into a Google phone?
What does Google have to say?
Googles’ response to the FCC is extremely frustrating. What the FCC primarily wanted to know from Google was what Google Voice does, why did Apple say it rejected it, and does it think that AT&T/Apple offer similar services?
Google explains the core functions of Google Voice – it’s an application that would enhance both voice and messaging services, and allow users to share a single “Google phone number” across multiple devices. The app would allow users to access their Google voicemail and SMS from the iPhone, and place calls and sends texts to their iPhone contacts through Google Voice. However, Google was careful to point out that Google does not provide the actual telecoms pathways necessary for these services. In other words, it would be using the AT&T network.
Where it becomes frustrating is in the answer to the question about why Apple said it rejected the app. That entire section is redacted. There is simply nothing there.
What does AT&T have to say?
In it’s own response to the FCC, AT&T neatly side-stepped the matter. It stated that since AT&T and Apple entered into their iPhone agreement before the App Store existed, AT&T has absolutely nothing to do with the Apple approval process for apps. However, both Apple and AT&T confirmed that Apple DOES have to check with AT&T before it taking “affirmative steps” to enable a VoIP service over the AT&T network. So while AT&T claims it has no influence over app approval, Apple would have to directly seek the permission of AT&T to allow any VoIP app that would run on the AT&T network.
While Google Voice isn’t a VoIP service, it does perform exactly the same function that annoyed AT&T about VoIP in the first place – using the AT&T network to run it’s own voice service for cheaper than AT&T does. However, AT&Ts official line is that it “had no role in any decision by Apple to not accept the Google Voice application… was not asked about the matter by Apple at any time, nor did it offer any view one way or the other.”
In this case, says AT&T, the decision to not allow the app falls completely with Apple.
What we think?
I think the FCC has picked the wrong fight here. I won’t deny that the habit of Apple to enter into exclusive contracts has raised a few eyebrows. That was excusable in the early days, when AT&T was taking a definite risk in being the very first operator to pick up the smartphone. But the iPhone is a proven piece of kit now – people love it. The device will definitely sell in any country it enters. For Apple to lock out every operator except one in every country the iPhone sells in does smack of anti-competitive behavior. It reduces the choices available to the consumers to just one. More specifically, and more to the worry of the FCC, it offers that single operator the opportunity to take that advantage and wield it to the detriment of other companies, from operators to developers.
Unfortunately, that doesn’t seem to be what’s going on in this specific instance. I think Apple has a damn good argument for delaying on Google Voice. The iPhone was a tremendous risk, and it paid off for Apple. It took a huge amount of development and effort – and there’s no good reason that Apple should just let Google swing in afterwards and yoink all of the branding. It is possible that AT&T had something to do with it – they do have a motive to get involved. However, Apples reason is good enough on its own that I believe that FCC has jumped the gun here, and has chosen the wrong thing to make its stand on.
