As the pivot point driving service subscriptions and package revenues shifts to the OS environment, touch interface device and apps store triumvirate, a large degree of the controversy surrounding open access has shifted to wireless communications networks. Change agent Apple has become the focus of FCC investigation because of the role it now plays in determining which applications are permitted into the iPhone’s avowedly open applications environment.

The issue of how regulators, suppliers and operators define the openness of networks and devices has again come into focus as the FCC considers complaints by Google that Apple has restricted Google Voice from being available for the iPhone. Operator AT&T has responded that they have not stipulated that G Voice or other applications cannot run on their network, so long as they adhere to security and service agreement requirements.
AT&T's response letter to the FCC Google Voice inquiry:

FCC: "Question 1. What role, if any, did AT&T play in Apple’s consideration of the Google Voice and related applications?"

AT&T: "AT&T had no role in Apple’s consideration of Google Voice or related applications."

Apple's response is that they have not made a final decision yet, but that they do object to Google Voice altering the iPhone user interface and imposing its own.

FCC: “Question 1. Why did Apple reject the Google Voice application for iPhone and remove related third-party applications from its App Store?"

Apple: "Contrary to published reports, Apple has not rejected the Google Voice
application, and continues to study it. 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."
This raises a host of issues, including how applications are tied to devices in open environments, the degree of tying of products and applications caused by the unique agreements IP device suppliers have with operators, and whether this amounts to anti-competitive activity.

At first glance the choices available to wireless subscribers seem numerous:

• In the first place, users may select from multiple wireless network and virtual network suppliers.
• Users have numerous choices of devices that operate on each network including ‘unlocked’ devices obtained independent of the operators supply chain.
• There are increasing applications and extended services being offered by operators, device suppliers and third party sources.
• There are alternate choices including WiFi, WiMAX, and LTE. For example, the 700MHz spectrum has specific requirements for open devices and open applications.

Therefore, operators and their suppliers tend to argue that it should be acceptable to restrict applications from changing the way the interface of devices is structured or otherwise ‘interfere’ with the specific packaging of devices and applications that they or their partners have developed.

This issue shares similarities with the spate of battles over the Microsoft Windows PC OS environment; in most cases it is not a matter of outright restriction of applications but a matter of prominence. The EU and other regulators have judged Microsoft to be exerting monopolistic control over applications packaged as part Windows. Whether applications are included with initial installation of the software or have equal ‘product placement’ on the front shelf/front page of the Windows platform or are buried in the program menu has been of critical importance to authorities and commercial interests in open access to the consumer.

The mobile environment has unique constraints and obligations as determined by regulators and anti-trust authorities. While greater control is needed for traffic that travels over common wireless interfaces, differences are being diminished as wireless networks propel toward IP broadband.

From what we see shaping up for this current difference of opinions, we think that Google is likely to prevail.
But will Apple decide to push back harder in order to stem what is likely to lead to greater opening of their iPhone platform to Google and other competitors? If so, Apple could force the FCC’s hand to rule more decisively.

The degree of openness of applications that run across devices on mobile networks will become even more important to how Verizon and AT&T make use of their LTE deployments. On the one hand, these networks present a major step forward in bandwidth and ability to deliver higher QoS needed for many applications. On the other hand, neither operator wishes to become a utility provider of a fat pipe on which flows the revenue capturing applications of content of third party providers.

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For more information you can contact the author at robert@maravedis-bwa.com

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