Apple will OK Google Voice app -- over Wi-Fi

Both AT&T and Apple have now said their big iPhone contract forbids VOIP applications from reaching the App Store unless AT&T agrees to them

Those of us who have watched VOIP for a while now always keep an eye out for cases where traditional voice carriers act defensively to keep people from using VOIP.

Is Apple's denial or delay (???) of the Google Voice iPhone app a (rare) case in point?

When Google asked for its new (hybrid VOIP) Google Voice mobile app to be included in the iPhone app store, did the boys from AT&T whisper over Apple's shoulder: "Hey Steve, if you're going to have VOIP apps on the iPhone that directly compete with our cellular voice plans, then why are we paying you megabucks to be your exclusive service provider? This isn't what we signed up for!" If iPhone users are able to easily make VOIP calls using Google Voice on their iPhones, they can avoid using AT&T cellular minutes, which directly hurts AT&T's bottom line.

But that over-the-shoulder whispering from AT&T probably didn't happen. It didn't need to.

Both AT&T and Apple have now said their big iPhone contract forbids VOIP applications from reaching the App Store unless AT&T agrees to them. From the August 21 AT&T letter to the FCC on the matter:

"The parties' willingness and ability to assume the risk of their investments in the iPhone and of their pricing strategy were predicated, in significant part, on certain assumptions about the monthly service revenues that would be generated by iPhone users," writes AT&T's James W. Cicconi. "In particular, both parties required assurances that the revenues from the AT&T voice plans available to iPhone customers would not be reduced by enabling VoIP calling functionality on the iPhone."

(When Ciccioni writes "the parties" he's obviously talking about AT&T alone. How in the world would Apple be harmed if VOIP apps ran on the iPhone?!?!)

So it makes no difference at all whether or not AT&T advised Apple to deny or delay Google Voice's admission to the App Store. AT&T's aversion to VOIP apps had already been discussed, agreed upon, and put into the contract.

So when AT&T recently told the FCC it had no hand in denying the Google app, it was telling the truth. It had a hand in denying VOIP apps for the iPhone during contract negotiations many months ago, but not Google Voice specifically.

Still, this all puts Apple in a bit of a muddle. Apple now tells the FCC it never really denied Google's application, and that it is still considering it. But it will have to make a decision at some point. How can it please its powerful partner, AT&T, by blocking such a high-profile (and cool) app, yet not incur the wrath of the tech community and maybe even the Feds for doing so?

The answer is, they don't block it. They accept it warmly, but with a catch. Apple will accept Google Voice to the app store -- provided the app connects to the Google Voice server only over Wi-Fi networks. This might pacify Google, iPhone users and the media, while limiting the bite Google Voice can take into the iPhone calling plan revenues reaped by AT&T going forward. Apple and AT&T may reason that If people must wait until they have Wi-Fi access to use Google Voice, much of the app's appeal (on the iPhone, at least) will be lost.

However Apple and AT&T resolve the Google Voice problem, it will be a calculated risk for both. There are down-sides to any kind of resolution. But relegating the Google Voice mobile app to Wi-Fi use seems like the safest bet for both companies, economically and PR-wise. It also follows a precedent: Apple's treatment of the Skype mobile app.

That's not to say that iPhone users should be happy about it. At the end of all the talking and posturing it's just another carrier trying to make sure you and I use the services that cost the most and give the least. But iPhone users have already put up with a lot from Apple and AT&T; I guess the companies figure said users will grin and bear this one too.

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Mark Sullivan

PC World (US online)
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