FCC looking into Apple's rejection of Google iPhone app

Google (GOOG) developed a VoIP app for the Apple (AAPL) iPhone. The software would likely have been popular, since it was designed to cut the price of phone calls. But it might have hurt the subscriber income of Apple's exclusive cellular partner AT&T (T). Apple rejected the Google app. The FCC wants to know why that happened.

The federal agency sent a letter to the three companies on Friday with the goal of getting more information on the events that caused Apple to turn down the Google product. In an exclusive article in The Wall Street Journal, the paper reported, "The FCC's letter to Google asks for a description of the Google Voice application and whether Apple has approved any other Google applications for its store."

The entire cellular industry is coming under siege by the government. Verizon Wireless and AT&T are already being investigated by the Justice Department because of their exclusive deals with certain handset to distribute popular phones. The Apple iPhone deal with AT&T is one example of this. The government is concerned that smaller carriers can't compete with companies that have the sole rights to the hottest phones.

The government appears to be at the beginning of a process of asking why the largest cellular companies and their partners run "closed" systems where they decide which phones consumers get and what software will run on them. If the government presses the cases, the industry could be in for permanent change.

Douglas A. McIntyre is an editor at 24/7 Wall St.

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