Monday, August 03, 2009

The FCC Questions iPhones' Rejection of Google Voice...

Last week I received an email invitation to start using Google Voice - a new service where Google offers you 1) a personal phone number that rings all of your existing phones when people call, 2) all of your voicemail in one inbox with unlimited online storage and free voicemail transcripts sent to your phone and email, 3) low-priced international calling to over 200 countries and free SMS, and more.

This sounded at least potentially cool, so it was worth a try. The only problem was that almost immediately after Google Voice was released, Apple decided to reject it, banning its use on the iPhone and through its App Store.

The reason for rejecting Google Voice is that these "duplicate features" - meaning, the fact that Google Voice and other rejected apps like Skype allow the iPhone to be used as a (gasp!) cell phone without the user having to subscribe to AT&T - strike at the core of the exclusivity deal between Apple and AT&T.

Now the FCC is getting involved. As Wired reports, the feds are becoming increasingly interested in "mandating openness" for Appleā€™s iPhone store and similar stores run by Sprint, Verizon and even Google. In response to Google Voice's rejection, the FCC has sent out letters to Apple, AT&T, and others seeking to know more information about their practices in order to rule on their fairness to consumers.

What's really at issue here is whether those exclusivity contracts between handset manufacturers and wireless carriers, such as the one which exists between Apple and AT&T, are anti-competitive and harm consumers. Many consumer advocacy groups have called for the FCC to make wireless carriers obey the same rules that already apply to broadband providers - rules that force ISPs to let users run whatever applications they want.

It would be pretty hard to justify why the same rules shouldn't apply to both landline and wireless service providers. People ought to have the choice of what cell phone they want to buy, and also have a choice between competing service providers. The current system where consumers are perpetually "locked-in" to multi-year contracts every time they want to choose to purchase a different phone is an awful, anti-competitive practice.

Let consumers have choices, and let competitive markets run their course. The FCC ought to ban exclusivity contracts, as they exist in their current form, and untether the handset manufacturing industry from the wireless service carriers.


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