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Comment by idm | Hacker News Reader

On the one hand, I feel like Apple can probably hide behind the terms of its app store and be sufficiently safe from any consequences. In the short term.

Especially given the "duplicating dialer functionality" argument, this sounds a lot like AT&T has something to do with the rejection, even though Apple and AT&T adamantly deny that.

So, for the slightly-less-short-term, it sounds like Apple has an (anti-)competition issue here... and if the FCC doesn't care about it (and they might) then the FTC surely will. After all, isn't "duplicate functionality" just a secret code for "competing with our features?"

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Uh, no. Being arbitrary and protective about what products you allow people to build onto your own products is not inherently a restraint of trade.

My cable set-top box is a Cisco product. There are lots of cool things I could do with it. It controls a critical communications channel for me. I can't even swap it out for a different component. Clearly the FTC does not care that Cisco and AT&T have colluded to prevent me from modifying it.

When someone can convince the DoJ that Apple has seized control of the phone market, so that no viable alternatives exist to bring connected mobile software to market, Apple will be in a position to violate the law by capriciously denying applications. They're not there yet.

People want to develop for the iPhone because it's the best, most popular platform. They don't have to.

You and idm both make good arguments, they don't seem exactly the same. Both are reasonable. I'll throw in a third. Although "Being arbitrary and protective about what products you allow people to build onto your own products is not inherently a restraint of trade", perhaps some forms of it should be. Do we have to wait for a form of monopoly control that fits the DoJ's intervention before we fix things that may obviously be broken? DMCA protections aside, maybe its time our gov does take a stand on companies precluding us from doing what we want with something after we purchase it.

Your set-top box perhaps only should be protected if modifying it could cause serious harm to the core service provided, a service that is supposed to be neutral in what it carries. That narrow protection (if it even applies to your set-top box) should most certainly not apply to value-added user apps on a pocket computer.

If a role of government is to ensure economic growth, is it wise to use Apply as the foothold case to create rules to disallow this level of protectionism? Would the PC market have created the level of economic growth it did if IBM had controlled what software could be installed? Is it acceptable in terms of economic potential that simply because companies have the means to control such distribution now that they be allowed to?

I'm not going to say your argument is crazy, but I see the other side of it, which is that companies should be free to build product offerings they way they want to build product offerings.

So in that respect, I have zero problem with Apple locking down the iPhone. It's their show, they should be able to put it on the way they want it to.

Now, AT&T's business practices in preventing arbitrary handset manufacturers from bringing products to market is a problem, especially because they don't compete with any vendor that welcomes free handset innovation. AT&T and its mobile network competitors are colluding to restrain competition.

But I don't buy that we should be making Apple the proxy for that problem just because they managed to break a small crack in that barrier.

I may be crazy in that I don't think the gov should see this as protecting Google, but as using the case to clarify consumer rights. I'm obviously a huge fan of "I bought it, its mine, stay out of my way". Additionally, as a fan of the potential of free markets (we rarely get to see one in action, so who knows, maybe I'd change my mind if I actually lived in one), I feel Apple and other's behavior potentially creates less-free markets (its one of the many things "I believe but can't prove").

Let me setup a really crazy example:

A home builder AppleHomes is selling high quality homes at hefty discounts from other builders. Made in China, "designed" in California. About a year into selling a few million houses, AppleHomes turns on their AppleCam network. A million homes live for everyone to enjoy their reality fetish. Sorry, you can't turn off your ShowerCam, its embedded into your product. Doing so is a violation of rule 234.43B in the 1984-page ThinkOfTheChildredAct. AppleHomes is being quite generous in discounting your AppleEnergy power bill with 50% of the revenue it generates from viewers of your AppleCams.

This example is meant to sound crazy. But according to your views on business can do what it wants, isn't this scenario just as possible (though hopefully not probably)?

That's a pretty bad analogy in any case: it's like you deliberately bought a house from Apple without being able to install any additional appliances, but they will sell you more appliances, most of which made by third parties, most of which are totally unnecessary and destined to be thrown away after a day or two, but all of which have hidden cameras in them. You can install appliances Apple doesn't sell you, but then Apple will refuse to support the appliances you already have in your house, the house itself, or your lawn chair.

sorry, my example wasn't meant to mirror too much the AppStore. I was only using the Apple names as satire. My point is to show what can happen when products are sold as services and/or when a product or service can be controlled after the initial transaction.

I have no hatred of Apple. I am a fan of their products and use them daily. I think they are doing pretty much what any other company in its position would do. If society doesn't want this sort of behavior, we have to regulate against it. That's how we control the boundaries of what companies can do.

I think this case of Apple/ATT/Google is a good battleground for fleshing out these issues before for example, the nature of things like books changes drastically. Apple isn't the only one testing these boundaries. We've seen the music companies try. Now we're seeing inroads in Books. What happens when every product becomes a service? What happens when every product must be extended through the same provider that you made the initial transaction?

While right, I don't think Apple's crossed any of the important barriers: what you agree to upon buying an iPhone is pretty much what you get.

There are enough competitors to ensure that Apple isn't stifling economic growth. The last thing we need is the government saying what policies any arbitrary company can or cannot have with regard to its products. That is a sure way to prevent economic growth.

Please don't encourage government involvement. SOX did a good job of killing the IPO market. We don't need more of that love.

> It controls a critical communications channel for me.

I believe the critical difference, insofar as the FCC is concerned, is that the cellular telephone spectrum is a public resource and as such they can impose certain restrictions on the companies to whom they partitions slices of that public resource that fall outside of the normal bounds of anti-competition law.

I don't believe that cable is regulated the same way.

Yeah that would be a great argument if DirecTV didn't use licensed spectrum and have exactly the same constraints --- not to mention a 10+ year history of booby-trapping their hardware to stop people from changing anything.

I'm confused by your previous two comments. You seem to be advocating that government's failure to regulate/enforce effectively in the past implies that it should continue to do so.

If Apple ends up being the one hit first, so be it. I expect the goal of well governed policies would be to extend a specific case into reifying expectations and enforcement of others.

Don't change the terms of the discussion. I'm not advocating for anything. I'm saying that what Apple is doing is the same thing other tech companies have been doing for 10+ years without getting sued by the FCC; the only reason we're debating Apple is because they waved a red flag in front of us by giving us any kind of real dev environment.

Since you mention it, the FCC just might call _you_ the criminal if you tried to modify your cisco box... :)

I won't claim to understand what's cooking in the DoJ or the FTC, but from my armchair, it seems like there's at least an argument here.

I wonder if this has come up before with different platforms, where a competitor was denied access to the platform basically because they were a competitor.

I can imagine this being the case with highly regulated industries (e.g. the TV/cable example), where the government is basically the gatekeeper of new competition, but here (i.e. Google Voice) it's not an issue of regulation.

"Uh, no. Being arbitrary and protective about what products you allow people to build onto your own products is not inherently a restraint of trade."

I think Microsoft would have a different opinion about that given their experience with the government in the 1990's and still to this day about what they allow and pre-install on THEIR own OS.

Microsoft had a monopoly. The DoJ went to huge lengths to prove Microsoft had a monopoly. You can't have a monopoly in "iPhones"; you have to have one in smart phones. Look at the numbers.

Clearly the FTC does not care that Cisco and AT&T have colluded to prevent me from modifying it.

How do you figure they 'clearly' don't care? Isn't it just that nobody is making enough of a fuss about it for them to do anything about it?

I hate what Apple is doing with their app store. But the fact that the FCC or the FTC would even be involved in this is ridiculous. At least under their current mandate which is to prevent large scale market abuse.

AT&T has sold 10.4 million iPhones as of 2Q 2009 (http://arstechnica.com/apple/news/2009/07/att-activated-24-m...). Compare that to 271 million Mobile Phones in use right now in the U.S. (http://en.wikipedia.org/wiki/List_of_countries_by_number_of_...). That's a little over 3% market share.

So Apple isn't big enough to have an impact on the larger market which makes the government attacking them unjustified. They just gets a lot of hype which makes them a ripe target for an overzealous FCC.

I promise I'm not gunning for any legal action here (cause I get so much done w/ my Apple tools) but...

http://gizmodo.com/5240272/federal-trade-commission-investig...

FTA: "The biggest issue here seems to be that Apple and Google share two directors, in this case Eric E. Schmidt and Arthur Levinson."

Basically, I don't claim to know why this stuff happens, or why X investigates Y... and you know what? Maybe you're right that it _would_ be ridiculous.

EDIT: (posted in reply to TomOfTTB, below) I completely agree that it's a separate issue from the GV product. I mention it because there was recent discussion of the FTC, Apple, and Google.

I don't think that's related to the Google Voice issue. In fact, if anything I'd think it runs contrary to that investigation. The FCC investigates shared board members to prevent companies from unfairly collaborating. In this case it's a case of the two companies in question being opposed to each other. So it's a completely different issue.

The Google Voice app in no way affects AT&T. Even with Google Voice, cell phone minutes and data are still used. SMS revenue is potentially at risk, but PNS is a bigger threat to that than Google Voice.

Apple is very likely acting alone. Have I missed something?

It's not a question of how much AT&T has to lose, it's a question of what Apple has to gain.

Here, yes, AT&T has something to lose if the app is allowed. Maybe it's not much, but it's something.

What does Apple have to gain by denying this app? In fact, they're the _only_ ones who have anything at all to lose by taking such action.

EDIT: good points in reply to this... (I can't reply any deeper in the thread, so I'll just acknowledge it here)

AT&T already allows Google Voice on other phones. I find it fascinating that so many people continue to blame AT&T well after it's very clear that they had nothing to do with it. They just can't imagine that their poor little underdog Apple would limit competition on their device.

Apple has a lot to lose if this app is allowed. Search and maps is already provided by Google. Add in call management, voice mail, and SMS and you have a phone almost completely powered by Google software -- that's not a position that Apple wants to be in! Their excuse of "duplicate functionality" really is an honest answer. Remember, they also denied Latitude.

> AT&T already allows Google Voice on other phones.

I'm not too 'up' on the state of cellphones on AT&Ts network, but how many of these cellphones even give AT&T the ability to ban a specific app?

How many of these phones allow their owners to install apps from a 3rd party (i.e. an 'app store' is not the only source of software)? I'm not saying that AT&T is at fault here, but the argument that AT&T has other phones that they 'allow' to use Google Voice on, is a bit far from the truth (i.e. iPhone is one of the only phones that AT&T would have the ability to 'ban' an app on).

> They just can't imagine that their poor little underdog Apple would limit competition on their device.

That's not necessarily the case. There are a lot of people that are part of this 'discussion' (I'm not talking just the discussion on Hacker News) who hate both Apple and AT&T. Some people want to see this as proof that both companies are evil. Please don't get bend out of shape over the Apple apologists. Though they are loud, they are a minority.

> how many of these cellphones even give AT&T the ability to ban a specific app?

If AT&T wanted to block Google Voice, they could easily do it from the network level.

> iPhone is one of the only phones that AT&T would have the ability to 'ban' an app on

The assumption here is that AT&T some measure of control but there doesn't seem to be any evidence of that. Wasn't the entire deal with AT&T that Apple maintains all the control? That's why there isn't a T-mobile iPhone instead. We know of the contract stipulation from AT&T that requires Apple prevent high-traffic applications and VoIP but that seems to be it. Apple seems to more than willing to take all the responsibility -- why should anyone assume differently?

I'm guessing AT&T's loss would be in allowing a toehold on number portability. Your current choice is: work hard to get sucky_cell_provider_X move your number to sucky_cell_provider_Y. The process isn't transparent to most consumers. Google comes in as proving a free value add service that also aids the process of number portability. Once this happens to a large enough user base, there should be losses and price pressure to the provider as there becomes more options for the consumer. This route is not what AT&T or any provider wants.

This is what any industry doesn't want. With Google providing a 'front-end' to your telephone service the actual providers like AT&T become a commodity. No industry wants their product to become a commodity.

exactly. Commoditization happens and we should remove some barriers that keep it from happening. I beleive that things becoming commodity and becoming subsumed into our social/economic fabric are critical to evolution.

Is there no number portability in the US?

There is now, but barely. The vast majority of cell users don't know about it and most people I have talked to that moved their number said it wasn't that easy. Google may both make it easier and certainly raise awareness.

What does AT&T have to lose since they allow this on other phones on their network? How many times do people need to be reminded of this fact?

What does AT&T gain from Apple rejecting the Latitude app?

More users of Loopt, perhaps? They make some money off of that: http://www.wireless.att.com/source/connect/loopt/

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