FCC Sticks Its Nose Into Google Voice App Flap

Citing pending reviews of wireless open access and handset exclusivity, the Federal Communications Commission, under the leadership of Julius Genachowski, has launched in inquiry into the reasoning behind Apple's (Nasdaq: AAPL) rejection of the Google (Nasdaq: GOOG) Voice application for its App Store.

To recap, Apple informed Google last week that it would not include Google Voice in its App Store for the iPhone. The application lets users send free text messages, make free domestic phone calls and make international calls at low rates. Although it never said so, the conventional wisdom is that Apple made the decision in deference to its carrier partner AT&T (NYSE: T) -- and possibly future partners -- whose own wireless offerings might have been undercut by Google Voice.

AT&T officially has no role in such decisions -- a fact it's emphasizing as the FCC inquiry gets under way. The provider's official response to the current flap is that AT&T does not manage or approve applications for the App Store. It has received an inquiry from the FCC and will respond to it, according to a statement provided by spokesperson Michael Coe.

Such protestations, though, apparently have fallen on deaf ears at the Commission. In its letter to Apple's VP of government affairs, Catherine A. Novelli, the FCC asked several pointed questions of Apple, such as "Did Apple act alone, or in consultation with AT&T, in deciding to reject the Google Voice application and related applications?" and "Does AT&T have any role in the approval of iPhone applications generally (or in certain cases)? If so, under what circumstances, and what role does it play?" and "What roles are specified in the contractual provisions between Apple and AT&T (or any non-contractual understanding) regarding the consideration of particular iPhone applications?"

Apple did not return MacNewsWorld's call requesting comment in time for publication.

Implications for All App Stores?

The FCC does not appear inclined to limit its inquiry to AT&T's possible undue influence in the decision-making. It has asked Apple what other applications have been rejected for use on the iPhone and for what reasons. It wants to know if a list of prohibited applications -- or categories of applications -- is provided to potential vendors/developers. If so, is this list posted on the iTunes Web site or otherwise disclosed to consumers?

Indeed, carriers and software providers building their own app stores are certain to be interested in the full list of questions the FCC is posing to Apple, as they could be required to field the same questions at some point.

The FCC has also asked about the standards for considering and approving iPhone applications, and the approval process for such applications -- such as timing, reasons for rejection, appeal process and so on. It also wants to know the percentage of applications rejected and the major reasons for rejecting an application. The Commission is declining to comment beyond Chairman Genachowski's statement announcing the inquiry, spokesperson Jen Howard told MacNewsWorld.

Scoring Political Points?

To some, it appears the FCC's inquiry is a stretch of its stated mission to ensure a competitive wireless marketplace.

"It is not clear where the FCC is getting its jurisdiction for this inquiry," Ryan Radia, an analyst for the Competitive Enterprise Institute, told MacNewsWorld. Such an inquiry would more appropriately come from the Federal Trade Commission or the Department of Justice, he said.

"My speculation is that the recently confirmed FCC chairman is looking to make some headlines, scoring political points over the anger about Apple's rejection of this app," Radia said. "It gives him the appearance of working for the benefit of consumers."

Walled Garden

The FCC does have the right to launch this inquiry, contended Jonathan Kramer of Kramer Telecom Law Firm.

"What is confusing is that this looks like a software issue -- not an access issue," Kramer told MacNewsWorld. Ultimately, though, that is what it is about : fair access to wireless networks.

It's unlikely Apple will find itself embroiled in a long dispute with the FCC, assuming it has been transparent with consumers about its App Store and connectivity, added Kramer.

It is within Apple's right to keep an application out of its App Store, which has been a walled garden ever since its inception, he said. "As along as Apple doesn't actively bar users from accessing Google's voice applications by, say, data address blocking, then it should be fine."

AT&T, though, is another issue. It would be responsible for any lack of connectivity to certain sites.

"After all, Apple's iPhone does nothing by itself -- it is AT&T's network that provides the connectivity and can block connectivity to a competitor if it wants," noted Kramer.