Is AT&T Secretly Controlling Your iPhone? The FCC Wants to Know (And So Should You)

The Federal Communications Commission's plan to investigate the blocking of Google Voice over the iPhone signals the agency's new resolve to address public concerns about carrier control over an exploding mobile phone marketplace.

And the move couldn't have come soon enough. As millions of users are opting to upgrade to Internet-enabled "smart phones," carriers have begun blocking access to applications and the free-flowing Web by controlling what these phones can and can't do.

The agency's Wireless Telecommunications Bureau on Friday sent letters to Apple, AT&T and Google seeking answers to a series of questions about the blocking of the new Google application.

The FCC Steps Up

It's just the latest in an unfolding agency investigation into wireless practices.

Earlier Apple and AT&T decided to block Skype and Sling Media in the App Store, programs which compete directly with AT&T services. The carriers continue to maintain that the blocking of services and applications over the wireless Internet doesn't violate the established FCC standard for openness.

The FCC's New Enforcer: Chairman Genachowski

After less than a month in office, FCC Chairman Julius Genachowski is not buying it, and is taking a serious look at the lack of competition, consumer choice and openness in the wireless Internet sector.

The FCC announced in June that it would investigate exclusivity agreements that lock particular phones to carriers, while soaking consumers with high termination costs should they decide to go elsewhere.

But Friday's move takes the issue one step further, indicating the FCC's new "proactive approach to getting the facts and data necessary to make the best policy decisions," according to Chairman Genachowski.

The data on market concentration are pretty damning for carriers: Four wireless service providers (Verizon, AT&T, Sprint, and T-Mobile) account for 90 percent of the U.S. market. Across the board these carriers seek to have ultimate say over the phones and applications that can run on their networks.

They also limit Internet access to certain services, and keep subscribers locked down via predatory mobile phone contracts that levy massive fines against those who seek a better deal with a competitor.

AT&T Doublespeak

The FCC hopes to determine whether Apple and AT&T are working in collaboration to block certain wireless applications in favor of others. AT&T maintains that Apple makes all decisions on applications. But Apple seems to consistently block applications including Google Voice, Skype and Sling Media that threaten AT&T's bottom line.

This spring, Free Press urged the FCC to confirm that wireless networks must adhere to the Internet Policy Statement, which protects consumers' right to access any online content and services on any device of their choosing.

Surprisingly AT&T has in the past voiced public support for this position when its lead lobbyist Jim Cicconi was quoted in the Washington Post: "The same principals [sic] should apply across the board. As people migrate to the use of wireless devices to access the Internet, they...certainly expect that we treat these services the same way."

But while AT&T has acknowledged that open Internet principles should apply to the industry, it's acting to do the opposite: deciding what iPhone customers can and cannot do.

An Open Internet by Any Means

The FCC investigation is encouraging. At a time when carriers seek to become gatekeepers to the next generation of Internet access, the agency must re-assert our right to an open Internet -- whether accessed by desktop computer, laptop or mobile phone.

The right solution is to allow access to all applications and services without discrimination via any Internet connection.

If wireless carriers continue down the path of anti-competitive blocking and favoritism, Congress and the FCC should step in to set a better course.

Follow Timothy Karr on Twitter: www.twitter.com/TimKarr

Comments

[LBCityGirl]

The first thing the FCC should do is declare iPhone's marriage to AT&T null and void. Apple was foolish to couple with AT&T. Imagine how much better sales of the iPhone would be if the iPhone were free to be used with ANY cell service provider!

[countryjoe8]

Apple did approach Verizon but they told apple to keep walking. You have to remember that at the time, most companies didn't believe the iPhone would be a success. Microsoft laughed at them and mocked them at their annual developers conference. They approved Verizon, but was told they were not interested.

You also have to remember that the amount of control Apple was requesting over the phone's design, distribution and software was unpresidented. Before the iPhone, carriers usually had the final say over what features and software would be available. In some cased, they also had the final say on the phone's design.

At&t took a big gamble at the time giving up control and signing the contract they did with Apple. It has turned out to be a good deal for them so far. At&t's financial reports show that even though At&t subsidizes the iPhone, their per phone profit is still more for the iPhone than any of their other phones.

I'm sure that when Apple's contract with At&t expires next summer, they will open the phone up to Verizion. You can already see that happening oversees with some of their other carrier partners. Plus it just makes smart business sense to make the phone available to Verizon customers now since Verizon is not the largest carrier in the US.

[DialectDerelict]

Verizon has the most customers with the acquisition of Alltell. Largest carrier.

[DialectDerelict]

Alltel

[XCITIZEN]

Does not surprise me. Every time I walk past an ATT store, with all their iPhone marketing, I think of the role ATT played and continues to play in the warrantless wiretapping of American citizens.

[proudloudlib]

How does Google Voice affect A T & T's bottom line? And when did they block it, because I've got it on my phone, and it works ( I just checked).

[countryjoe8]

They didn't block it. What happened is that a new Google Voice app was denied acceptance in the App store. Also, a few older apps like GV Mobile were simultaneously removed from the App store. At&t has denied involvement in the decision, but I think they are lying.

When users are allowed to make long distance VOIP calls, they are bypassing the At&t network and At&t won't be able to charge them long distance. That's how it affects At&t's bottom line.

[chazzcam]

You are correct, Google is reducing AT&T's bottom line by reducing long distance calling. Just to clarify a little though, Google Voice is not currently using VOIP, though my understanding is that at some time in the future they plan to. Currently it is just a connecting service, similar to a calling card, where you dial into your GV number, then punch in the recipient's number. The app simplifies the procedure, allowing you to click one button, and be connected (the google number calls you, and when you pick up, it connects you to the recipient). GV Mobile operated like this, and thus AT&T asked to have it removed.

And yes, AT&T did ask to have GV Mobile removed, as I said below, I have a screenshot of a user complaining to an appstore rep about his GV Mobile being deleted, and the rep said that it was a great program, but AT&T requested it be removed. Here is a direct link:

http://www.modernbandit.com/2009/08/fcc-investigates-at-apple-google-love.html

AT&T is clearly operating in an anticompetitive way, but hard to say if violative of antitrust laws. In any event, the FCC can regulate the airwaves in just about any way they see fit, so though anti-trust issues may be the driving force behind the inquiry, the FCC can regulate even where anti-trust case law is not controlling.

[chazzcam]

Not only was the Google app rejected, but a third party app called GV Mobile created a while back to have similar functionality, which had been available on the Apple App Store, has been removed as well. What's even more interesting is that a Apple customer service representative apparently claimed the GV Mobile app was removed at AT&T's request. This all happened a couple of days ago, the same time that Apple rejected the official Google application.

I recently started a blog following legal issues related to white collar crime and cyber terrorism. I have an in depth analysis of this issue for any who are curious:

http://www.modernbandit.com/

[GayIthacan]

"Surprisingly AT&T has in the passed "

'Past' dear, not 'passed'

[eyeroll]

[XCITIZEN]

And I love how you didn't even bother to comment on the story. Just on here to correct the grammar of other people? My my...