Saturday, August 1, 2009

FCC questions Apple on blocked Google software

FCC questions Apple on blocked Google software

Apple Inc. has been asked by federal regulators to explain why it won't allow Google Inc.'s voice application to run on the iPhone.

The Federal Communications Commission on Friday sent letters to Apple and AT&T Inc., the only wireless phone company allowed to sell the iPhone, to explain the decision. The agency asked them to respond by Aug. 21.

The informal inquiry appears to reflect the tougher approach that regulators in the Obama administration plan to take toward business, if they believe competition is being threatened.

The FCC is already looking into the wireless-industry practice of exclusive handset deals in which only one carrier is allowed to sell a certain device.

AT&T, for example, has had exclusive rights to sell the iPhone for more than two years. Only Sprint Nextel Corp. (S 4.00, -0.02, -0.50%) can sell the Palm(PALM 15.73, +0.28, +1.81%) Pre while Verizon Wireless has exclusive rights to the BlackBerry Storm.

Critics complain that such deals hinder competition and deny consumers their choice of network provider.

"Recent news reports raise questions about practices in the mobile marketplace," FCC Chairman Julius Genachowski said in a statement.

Google's voice application performs some functions similar to Apple's own software tools and it potentially could enable iPhone users to communicate more cheaply - the result of which could be less revenue for Apple and AT&T.

Apple (AAPL 163.39, +0.60, +0.37%) and AT&T (T 26.23, -0.11, -0.42%) could not immediately be reached for comment, though AT&T has said that Apple decides which applications to allow on the iPhone.

Google (GOOG 443.05, -2.59, -0.58%) said in a statement late Friday: "We will continue to work to bring our services to iPhone users, for example by taking advantage of advances in mobile browsers. We will supply the information that the commission has requested."

If the FCC does not find the answers satisfactory, the agency could open a formal investigation.

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