Apple 2.0

Covering the business that Steve Jobs built

The FCC is asking Apple and AT&T all the right questions

August 1, 2009: 7:16 AM ET
Google Voice

Google Voice. Art: Google Inc.

[NEWS FLASH: Google CEO Eric Schmidt has resigned from Apple's board. See here.]

Sometimes you've just got to love the government.

Case in point: the inquiry that the U.S. Federal Communications Commission launched Friday into why exactly Apple (AAPL) decided to reject Google's (GOOG) powerful Google Voice call-management system for the iPhone, and what role AT&T (T) played in the decision.

Hundreds of reporters -- from the tiniest blogs to the most powerful national newspapers -- have been trying since Tuesday to get to the bottom of the story and have run into the same brick wall. The problem is, none of these companies are under any obligation to answer their pesky queries.

But companies do have to answer to the FCC if they want to provide telephone service in the United States. And on Friday, letters sent to Apple, AT&T and Google asked all the right questions. (You can read them yourself below the fold.)

But first, a bit of background.

The reason everyone is making such a fuss about Google Voice is that it solves -- in theory, at least -- so many of the problems created by modern telephony.

Google Voice started life in 2005 as GrandCentral, a company that offered a single unified life-time phone number in the area code of your choice that would ring all your phones -- home, cell, work, vacation home, etc. It also unified your voice messages, putting them in a single voice mailbox on the Web. And it let you tweak the system to your heart's content, setting up different away messages for different callers, blocking telemarketers and collection agencies, choosing to ignore, erase or listen in on incoming messages, and so on.

Google bought GrandCentral in 2007 and seemed content to let it rot, as GigaOm's Judi Sohn put it her widely reposted January editorial "Will the Last One to Leave GrandCentral Please Turn Out the Lights?" But it turned out that Google had been secretly working on it all along, and in March it unveiled a new and improved version -- redesigned and renamed Google Voice -- with some brand new features, including free conference calling, dirt-cheap international calls and various tricks for turning voice mail into e-mail,

As David Pogue put it in his New York Times review: "If Google search revolutionized the Web, and Gmail revolutionized free e-mail, then one thing's for sure: Google Voice, unveiled Thursday, will revolutionize telephones."

Group asks FCC to probe iPhone Skype restrictions

All of which helps explain what there was such outrage earlier this week when iPhone users learned that Apple had formally rejected the Google Voice application and was systematically removing from the App Store any Google Voice-related apps that had already been approved.

"Until recently, Apple has managed the store in a generally benevolent, if not somewhat incompetent manner," wrote TechCrunch's Jason Kinkaid in Apple Is Growing Rotten To The Core. "But now things are taking a turn for the worse."

Why did Apple reject the Google Voice? Did it do it for its own reasons, or did AT&T twist its arm? If so, why does AT&T support Google Voice for its BlackBerry users? What is the nature of Apple's relationship with AT&T? Or, for that matter, with Google? And how, exactly, does this whole App Store approval process work?

The FCC asks all these questions and more in the letters linked to below. The agency has a mandate to make sure telephone service is available to all Americans who need it, even in remote rural areas.

It has launched a broad investigation into the kind of exclusive deals that have, for example, let Apple sell iPhones to AT&T's customers but not Verizon's (VZ).

We wish them them well.

To learn more about  Google Voice, see the list of features here or watch Google's You Tube video, pasted below.

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About This Author
Philip Elmer-Dewitt
Philip Elmer-DeWitt
Editor, Apple 2.0, Fortune

Philip Elmer-DeWitt has been following Apple since 1982, first for Time Magazine, and now on the Web for Fortune.com.

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