What’s Really Going on with Apple, Google, AT&T and the FCC

Apple has responded to the FCC’s request for information around its rejection of various Google (GOOG) and third party iPhone applications for the iPhone.

In short, Apple (AAPL) denies that they rejected the Google Voice application, but they go into great detail about how the Google Voice application hurts “the iPhone’s distinctive user experience.” All of those statements are either untrue, or misleading, or both.

The first part of Apple’s argument, that they never rejected the application, is “a total lie,” according to many sources with knowledge of the Google Voice application process.

The second part of Apple’s argument, that the Google Voice application hurts the iPhone’s distinctive user experience, is seriously misleading. I know this because I’ve become intimately familiar with the Google Voice service and applications over the last few months. See here, here, here and here, for example. I haven’t used the Google Voice app for the iPhone specifically, because it never launched. But I have been briefed by the Google team on two separate occasions on how the app would work over the last couple of months. Also, I’ve demo’d the Blackberry version of the app, and now use the Android version of the app.

Here’s the key language from Apple’s letter, with my comments:

Apple: “Contrary to published reports, Apple has not rejected the Google Voice application, and continues to study it.”

Reality: One third party Google Voice app developer disclosed to us in July that Apple SVP Phil Schiller told them that Google’s own app would be or already was rejected. Google also confirmed this to us later. There is overwhelming evidence that Apple did in fact reject the application.

Apple: “The application has not been approved because, as submitted for review, it appears to alter the iPhone’s distinctive user experience by replacing the iPhone’s core mobile telephone functionality and Apple user interface with its own user interface for telephone calls, text messaging and voicemail. Apple spent a lot of time and effort developing this distinct and innovative way to seamlessly deliver core functionality of the iPhone.”

Reality: This strongly suggests that the Google Voice app replaces much of the core Apple iPhone OS function. This certainly isn’t accurate, and we believe the statement is misleading. More details below, but in general the iPhone app is a very light touch and doesn’t interfere with any native iPhone apps at all.

Apple: “For example, on an iPhone, the “Phone” icon that is always shown at the bottom of the Home Screen launches Apple’s mobile telephone application, providing access to Favorites, Recents, Contacts, a Keypad, and Visual Voicemail. The Google Voice application replaces Apple’s Visual Voicemail by routing calls through a separate Google Voice telephone number that stores any voicemail, preventing voicemail from being stored on the iPhone, i.e., disabling Apple’s Visual Voicemail.”

Reality: Not true and misleading. The Google Voice application has its own voicemail function, which also transcribes messages. But it only works for incoming Google Voice calls, not calls to the iPhone. The Google Voice app in no way “replaces” Apple’s voicemail function.

Apple: “Similarly, SMS text messages are managed through the Google hub—replacing the iPhone’s text messaging feature.”

Reality: Not true and misleading. The Google Voice app doesn’t replace or in any way interfere wtih the iPhone’s text messaging feature. If someone sends a text message to your Google Voice number, the Google Voice app shows it. If it is sent directly to the iPhone phone number, nothing is different.

Apple: “In addition, the iPhone user’s entire Contacts database is transferred to Google’s servers, and we have yet to obtain any assurances from Google that this data will only be used in appropriate ways. These factors present several new issues and questions to us that we are still pondering at this time.”

Reality: Complete fabrication, way beyond misleading. The Google Voice app can access the iPhone’s contacts database, like thousands of other iPhone apps. But the Google Voice app never syncs the contacts database to their own servers. There is no option for users to do this. However, Apple offers the ability to sync iPhone contacts with Google via iTunes. So not only is Apple’s statement untrue, but they also provide this exact feature themselves via their own service.

So how did Google answer the same question in their own separate letter to the FCC, also made publicly available today? We don’t know, because Google requested that the answer be redacted. But my guess is that the answer, which the FCC has and can compare to Apple’s response, tells a significantly different (approximately the exact opposite) story:

Our sources at Google tell us in no uncertain terms that Apple rejected the application. And we have an independent third party app developer who tells us that an Apple Exec also told them back in July that the Google Voice Application was rejected.

In other words, there is strong evidence that Apple is, well, lying.

Which also is the easiest way to explain Apple’s long rambling letter to the FCC. Why go into so much detail about the problems with the Google Voice application, and then say that it was never rejected? If the app does actually replace all of those core apple phone, contact and SMS features, why not reject it out of hand? I don’t believe anyone would say Apple made the wrong decision if that laundry list of nonsense had any truth to it (we have an answer to that, below).

Multiple sources at Google tell us that in informal discussions with Apple over the last few months Apple expressed dismay at the number of core iPhone apps that are powered by Google. Search, maps, YouTube, and other key popular apps are powered by Google. Other than the browser, Apple has little else to call its own other than the core phone, contacts and calendar features. The Google Voice App takes things one step further, by giving users an incentive to abandon their iPhone phone number and use their Google Voice phone number instead (transcription of voicemails is reason enough alone). Apple was afraid, say our sources, that Google was gaining too much power on the iPhone, and that’s why they rejected the application.

Apple seemed to be fine telling Google and others that the real reason they wouldn’t accept the Google Voice app on the iPhone was a fear of being turned into little more than a hardware manufacturer over time as users spent more and more time on Google Voice and less time on the competing native iPhone apps. Or simply letting people believe that AT&T was behind the rejection. Until the FCC got involved, that is. Then Apple denied the rejections and directed the FCCs attention to misleading or simply untrue factual statements about the App.

Of course, now both Google and AT&T (T) are required to tell their side of the story to the FCC, too. And those stories aren’t adding up.

What Happens Next?

Here’s what we believe Apple is preparing to do next. Their statement that they haven’t rejected the app, along with the long laundry list of complaints (none of which are true) tells us that they’re backtracking, and fast. Sometime soon, we guess, Apple will simply accept the Google Voice application. They have to - any serious investigation into the app by the FCC will show that the complaints around the app are unfounded and that it does none of the things Apple accuses it of doing. So Apple will save face by simply asking Google to ensure that the App doesn’t take over native phone, sms and other functions, and doesn’t sync the contacts to Google’s servers. Google will comply (they already have), and Apple will graciously accept the application.

But we’ll all know exactly where Apple stands - jealously guarding control of their users and trying to block Google and other third party developers at every turn from getting their superior applications in front those users.

This isn’t about protecting users, it’s about controlling them. And that’s not what Apple should be about. Put the users first, Steve, and don’t lie to us. We’re not that dumb.

Original post

Comments

[Roger Knights:]

Arrington has an insider's perspective, based on his contacts, not an arm-chairist's. His assertion about Apple's rejection is based on more than speculation, but on quotes from decision makers. His vision is evident in his earlier detailed article about Google Voice's breakthrough usefulness--not just on its being popular.

Aug 23 08:44 AM

[hrant:]

Disagree ! Google has its own phone so chove this app in that and leave my Iphone alone .
Google cannot competre so is using FCC . shame !

Aug 23 11:04 AM

[sleepy:]

Apple is tied by exclusive carrier agreements. These exclusive carrier agreements are the means whereby Apple did the FCC's job for it, and bust wide open the mobile internet (making a financial killing at the same time). Apple achieved this by demanding affordable unmetered mobile internet access, while protecting the carrier partner's high margin voice revenues; in exchange the carrier partners got growth in a saturated market.

I am sure Apple is ready and waiting for regulators to take over this unacknowledged public service, so Apple can move forward itself with internet based voice services. Equally I am sure Apple does not want to be holding the door open for Google and others while still pinned down by these exclusive carrier contracts. Regulation on this would mandate that third party internet based voice services must be permitted on any mobile data contract, and that's a tough rule for the lazy carriers to swallow. All the players (Apple, Google, FCC, AT&T) must know this is what underlies the public role-playing.

I find Mr Arrington's take on it superficial and unnecessarily offensive to Apple.

Aug 23 11:45 AM

[showme:]

..."briefed by the Google Team" ... "our sources at Google tell us" ... "multiple sources at Google at Google tell us" ... "Google also confirmed this." Is this what's called "hearsay?" Anybody want to come forward with identities and exact quotes? Has Mr. Arrington compared Apple's, AT&T's and Google's FCC responses to confirm "those stories aren't adding up." Well, we don't know yet. Lots of spin here and little documentation...

Aug 23 01:00 PM

[mikefarr:]

The Trojan Horse part of the argument is important. Everyone tries to get one of their products as standard fare on the other guys'. Google chrome on Mac and Win. Safari and iTunes on Win. Google Voice on the iPhone. Adobe Flash, Sun Java on the iPhone (will never happen). Sun didn't even pretend that Java on Win was anything other than a Trojan Horse which is why Microsoft came up with their own incompatible version. It's a successful strategy. Today, what percentage of the record number of switchers from Win to Mac have been due to iTunes/iPod/iPhone users on Win simply completing the journey?

Back in early days, Microsoft did a version of Basic for the Apple II. It became a standard on the machine. When this happened it gave MS enormous leverage over Apple. They refused to re-license Microsoft Basic for the Apple II, effectively killing it, unless Apple licensed them part of the Macintosh UI. Apple had no choice.

I had the same thing happen to me when my company was bought our key technology licensor at less than we thought fair value. It's a lesson you only have to learn once.

Aug 23 01:54 PM

[Dialectical...:]

Author: "Reality: This strongly suggests that the Google Voice app replaces much of the core Apple iPhone OS function."

It is statements like this that kill your argument. Apple is merely saying a PHONE app replaces the core functionality of their PHONE. And they have a point. They are not saying it replaces the OS and implying that this is what they're saying is misleading in the extreme.

I like both companies and I think the whole VOIP thing needs to be (and will be eventually) worked out. But I don't begrudge Apple for saying, "Gee no Google, you can not put your phone app on our phone, thanks." Who would expect them to do otherwise?

Aug 23 02:29 PM

[User 149220:]

What about the iPod users? Why do they have to follow what happens to the iPhone users. Let the iPod users have the Google Voice App.

Aug 23 04:12 PM

[Henry Buttal:]

My only comment is that it is easy to maintain your moral high ground, and claim you "do no evil", when you require the FCC to redact your statement. This, to me, undermines your whole pro-Google argument.

For obvious reasons, the carriers don't want VOIP rent seekers and free riders on there expenses network. They will fight it, and I am sure that Apple is required to fight it as well.

Aug 23 04:44 PM

[Warnin4U:]

So when did anyone acquire the right to tell Apple how to run it's company. How much Apple stock do you own. I think so many living in our country don't understand the basic tenants of capitalism that they actually believe that every company is owned by the welfare department. If you don't like Apple, don't buy their products. I vote with my wallet every day. Why do you spend all your time whinning about much that is little consequence? What are you doing for others? Wouldn't it benefit all more if you spent a little time mentoring underprivileged kids or working in a soup kitchen?

Aug 24 08:38 AM

[jbritely:]

when does the At&t exclusivity end?

Aug 24 12:29 PM

[drewmn:]

"(transcription of voicemails is reason enough alone)."

Really?

Is the author actually utilizing Google Voice, because I am.

The transcription feature is like most other things google has put out beyond its core search (think android, google voice, gmail, et al) It is over hyped and under performs.

Everyone of the transcriptions I have received is gibberish. Google voice was suppose to send me a .wav file of my messages, but does not. I can do everything google voice does with my vonage phone, but Vonage does it much better.

Aug 24 01:40 PM

[hamsami:]

This is what you call small brain thinking.

Aug 24 02:29 PM

[jack dee:]

Believe it or not, Apple's OS could run on any home built box or any dell, but Apple chooses to block it, there is no tech reason that OSX does not play well with others , it is merely apple blocking box makers from licensing its OS and opening up the PC market.

Expect the US and EU to compete to be the one to bring apple to heel

Aug 24 03:45 PM

[boisterousbob:]

I don't understand. Of course AAPL are trying to prevent GOOG from placing compelling voice telephony apps on their phone. As an AAPL shareholder you would expect nothing less. I don't see why this is even a story.

That said, I am in the minority who, as am iphone and touch owner, absolutely hate the aapl user experience. I find their software counterintuitive, and difficult. Ever tried playing a random video file on either device? You have to jump through hoops to get it to play because aapl are "preseving their user experience" by only allowing very specific and limited formats to be playable and forcing you to convert the file at great and unnecessary complexity.

AAPL take great steps to preserve ownership of their platform, frequently to the detriment of a user who is trying to get an AAPL device to do something that many other devices can accomplish quite easily.

Again, as an AAPL shareholder you want them to do this and continue to convince people to pay for the priveledge. As an owner of an AAPL decive, you probably want quite the opposite. Just choose your posing and hope....

Aug 24 05:59 PM

[rgbscan:]

I think what the author fails to take into account is the core way Google Voice works. For an insider supposedly versed in the google voice app, I find this post to almost be deliberately misleading. You give out your google voice number and it rings you at home, on your cell, and at work (or any other number) simultaneously. This way you only have to give out one number - the google number. All of that traffic then funnels through the google voice app for calls, texts, and voicemail.

This DOES alter the experience of iPhone users. The author themselves points out that if you get a call on your iPhone number it rings the iPhone and if you get a call to your google voice number it rings through the google app. Being that the app's entire purpose is to replace your existing phone (i.e. iphone) number and redirect it through google, voicemail and text messages too I think Apple has a valid point. If you're a google voice user you're giving out your google number - not your iphone cell number, otherwise what's the point of having it?

The author is correct in a very narrow view that the Apple text, voicemail, and phone call features still work even with the Google App installed. If however you look at the larger picture - the google apps purpose of REPLACING the Apple apps - you can see why Apple would be taking a hard look at it.

Apple's main area of innovation is in the user interface and user experience. This app replaces the core functionality of the iPhone by funneling texts, voicemail, and phone calls from Google and provides an entirely different experience. You can see where a user would be confused having two places to send or receive this info. Did I get my text for the meeting in Apple's SMS app or in Google voice? Hmmm.... let me go look for it. With Apple's "it just works" mentality this would certainly run against that spirit.

Aug 25 10:15 AM

[rgbscan:]

He didn't quote anybody or list sources. He just said he had them. That is not a legitimate way to prove your case.

Here, I can do that too. A key goverment official just called me to tell me Obama is resigning! :-)


On Aug 23 08:44 AM Roger Knights wrote:

> Arrington has an insider's perspective, based on his contacts, not
> an arm-chairist's. His assertion about Apple's rejection is based
> on more than speculation, but on quotes from decision makers. His
> vision is evident in his earlier detailed article about Google Voice's
> breakthrough usefulness--not just on its being popular.

Aug 25 10:18 AM

[jack dee:]

this is going to end up with a lot of tears.

Apple setting itself up for an EU super attack.
Apple Blocks browsers,
Blocks third parts apps,
blocked Rimm from itunes.
this is already more than MSFT ever did. And remember kids you dont have to be a monopoly to be in breach of the law.

I am guessing EU will require.

1 pub all APIs ipod itunes iphone etc
2 allow all browers on iphone and Mac
3 allow third party unapproved apps of all kinds on all iphones.
4 divest apps store.

Aug 25 01:50 PM

[jack dee:]

“ The Commission must do its part.....It must not rely on one vendor, it must not accept closed standards, and it must refuse to become locked into a particular technology – jeopardizing maintenance of full control over the information in its possession ”

Neelie Kroes

Aug 25 01:53 PM

[gwhizofto:]

Nokia had the same trouble with IBM and Apple too. It decided to preserve its brand as the highest priority. It makes sense for Apple to insist on maintaining control of the branding of the device, which is pretty deep into the behaviour, style, L&F etc. Google can be altruistic in some circumstances, but now it's scale alone causes side effects that cannot be seen as 'benefiting mankind'

Sep 01 01:21 AM

[JW.USC:]

Like all of your dates?


On Aug 25 01:50 PM jack dee wrote:

> this is going to end up with a lot of tears.

Nov 09 05:04 PM