In truth it is the Federal Communications Commission picking the fight, which centers on a single iPhone application. Aggressive action by the FCC could result in better access for developers and customers to mobile platforms still tightly controlled by cellular carriers, and that could be good news for media companies looking to expand their presence on cell phones and similar devices.
The app in question, Google Voice for the iPhone, was rejected by Apple for inclusion in the App Store at the end of July. Apple pulled several other Google-Voice-related apps at the same time, noting they were “duplicating features that the iPhone comes with (Dialer, SMS, etc).” Given these rejections, the vast majority of iPhone users (those unwilling to do some hacking) will be unable to install and use the service.
Google Voice for mobile devices allows users to perform a variety of call management, voicemail and SMS functions, all controlled through a phone number assigned by Google. Those features, especially SMS and long-distance calling over VoIP do duplicate iPhone functions. But, more importantly, they also duplicate features that AT&T currently charges customers to use.
Reacting swiftly, the FCC sent a letter to all three companies last week asking why Apple rejected the app, which is already available on Blackberry and Android phones. The Commission seems particularly interested in what role AT&T had in the decision to reject:
AT&T responded just as quickly in a public statement:
The FCC’s app store inquiry follows closely on the heels of several ongoing government reviews of cell phone handset exclusivity deals and the pricing structure cellular carriers commonly apply to services such as SMS. Those reviews could lead to formal anti-trust action against cellular providers if their business practices are found to be anti-competitive.
As phones become more powerful and embedded in our daily activities, new features such as location awareness (mobile coupons) and cashless payment systems will continue to supplant traditional media and commerce platforms.
According to a 2008 report by Nielsen Mobile [PDF], there are more than 40 million active mobile Internet users in the United States. Globally, mobile cellular devices outnumber personal computers four to one.
Cell phones are the next big audience platform. If this process leads to a bit more clarity and competition on the mobile Web, regardless of any final government actions on the anti-trust front, that can only be good for everyone in the long run.