Sunday, August 23, 2009

Apple to the FCC: "You see? You see? Your stupid minds! Stupid! Stupid!"

Well, okay, that's actually a line from "Plan 9 from Outer Space", but someone at Apple was thinking along those lines when they responded to the FCC's questions last Friday concerning Google Voice. (You can find Apple's entire response here.) After indulging in seven paragraphs of marketingspeak, Apple claims that it hasn't actually rejected Google Voice, which TechCrunch's Michael Arrington disputes; his sources inside Google assert that Apple did, in fact, reject the application. (We don't yet know Google's side of the story, because it redacted the section of its response to the FCC dealing with its discussions with Apple.) However, Apple states its case for why it would likely reject the application, a case that doesn't stand up to even the most cursory examination.

Apple claims that the Google Voice application replaces the functionality of Apple's carefully-crafted Visual Voicemail and text messaging features. In fact, it does no such thing. Google Voice sets up an additional phone number for the user. If the user chooses to give out their Google Voice number, and if they've configured Google Voice to forward calls to their iPhone, then and only then does Google Voice replace the iPhone's voicemail functionality for calls placed to their Google Voice number. If someone sends a SMS to the user's Google Voice number, the user would access the message through the iPhone Google Voice application instead of the iPhone's own SMS feature. But, if someone calls the user's iPhone directly, then the iPhone's voicemail system is used, and if they send a SMS directly to the iPhone, the iPhone's own capabilities are used. Google Voice doesn't usurp any functionality of the iPhone--it adds additional capabilities.

Apple also charges that the Google Voice application copies the user's entire contacts list to Google's own servers, which Michael Arrington again claims is untrue. Even if the charge is true, Apple itself enables the user's contact list to be copied to Google's servers via iTunes. Why is it okay when Apple does it but not when Google does the same thing?

Apple seemed to believe that the FCC wouldn't or couldn't figure out how Google Voice actually works. Making the assumption that you can baffle the U.S. Government with B.S. is dangerous. It reminds me of Jim Allchin's infamous testimony during Microsoft's antitrust trial, when he presented a bogus video purporting to demonstrate that Internet Explorer couldn't be removed from Windows without causing the operating system to slow down or malfunction. The Government shot holes in the video and Microsoft was forced to withdraw it. Microsoft subsequently admitted that it also falsified a second video that purported to show how easy it was to install Netscape Navigator on Windows.

Microsoft did a lot to destroy its own credibility in the course of its antitrust trials, and even though it managed to avoid serious damage through a "sweetheart" settlement with the Bush Administration, the company is still paying the price.

The FCC has a great deal of power over AT&T, but if Apple independently made the decision to ban Google Voice, as both it and AT&T claim, there's very little that the FCC can do. Apple's market share in mobile phone and smartphones is too small to claim that the company is a monopolist, so there's also very little that the U.S. Department of Justice can do. (DOJ could charge Apple with perjury in its response to the FCC; good luck trying to get that to stick.) The Federal Trade Commission might be able to take action, but I'm not sure what its grounds would be. So, Apple is probably not at risk for prosecution, but its reputation is every bit as much at risk as Microsoft's.

Apple's public behavior concerning the App Store has already changed substantially since the FCC issued its inquiry letter: Phil Schiller, Apple's Senior VP of Marketing, has personally written a developer and a blogger to explain the App Store approval process and state that improvements are underway. The response to the FCC made public a number of key details about the approval process, such as the average number of weekly filings and the number of reviewers. A formal appeal process for rejected applications also seems to be in the works.

With all that, however, Apple needs to approve Google Voice as an application, to try to put the immediate crisis behind it. In the long run, it should allow iPhone users to install applications from any developer, whether or not they've been approved by Apple, as Google's Android operating system does. Not only would this lessen government scrutiny, it would eliminate a huge reason for jailbreaking the iPhone.

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