FCC Probes Apple, AT&T after Google App Rejected: Statement by Consumers Union

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08/03/2009

WASHINGTON, D.C. – Joel Kelsey, policy analyst for Consumers Union, the nonprofit publisher of Consumer Reports magazine, made the following statement today about the FCC’s inquiry into why Apple rejected the Google Voice application for the iPhone. The commission sent letters on Friday to Apple, Google, and AT&T, which is the exclusive U.S. carrier for Apple’s iPhone. Apple today announced that Google’s chief executive Eric Schmidt is resigning from Apple’s board.

Joel Kelsey: “Google found a way to offer many innovative calling services for free, plus international calls for very cheap rates. Network owners and cell phone manufacturers may want to charge customers for these kinds of services. It wouldn’t be surprising if Apple and AT&T wanted to block this innovative application from iPhone users, and that underscores the need for the FCC to take action to protect competition in the wireless marketplace. A competitive marketplace does not block innovations like this one.

“In the past, when carriers wanted to block an application, they would leverage their exclusive relationships with handset makers. Google and other software innovators have found a way to get over that hurdle, but their applications are still being blocked. If consumers don’t like it, they face high switching costs and are forced to give up the investment they have made in their phone.

“It’s encouraging to see the FCC trying to get to the bottom of why consumers are being prevented from using this new service.”

Media Contact: David Butler, 202-462-6262, dbutler@consumer.org

Consumers Union, publisher of Consumer Reports, is an independent, nonprofit testing and information organization serving the consumer. We are a comprehensive source of unbiased advice about products and services, personal finance, health, nutrition, and other consumer concerns. Since 1936, our mission has been to test products, inform the public, and protect consumers.