AT&T and Apple: Cutting Ties That Overbind

After months of criticism from various consumer groups, it has been speculated that telecom giant AT&T is closer to allowing the use of VoIP applications over its 3G data network on mobile devices such as Apple’s iPhone.


3G access has been an issue over the past few months due to the fact that iPhone voice applications such as Skype can only be used in areas where the device can connect to the internet over a WiFi network.  With increasing pressure coming both from consumers and a Federal Communications Commission suddenly wary of strict exclusivity arrangements between manufacturers and carriers, it is not unreasonable to expect that VoIP over 3G will arrive before too long.

While changes are not going to be made immediately, AT&T and Apple continuously explore possibilities for allowing the release of VoIP applications, such as  Google Voice,  which Apple insists is still being considered for approval.

With pressure from consumers growing for this type of service and with  the FCC having launched an inquiry into Apple’s iPhone application approval process, it is within the realm of possibility that the barriers  preventing VoIP over 3G will be  reduced, or even eliminated.

Contrary to recent news reports and blog assertions, both AT&T and Apple deny that the carrier has “veto” power over applications Apple puts on its popular iPhone App Store. But, recent filings with the FCC do detail an agreement between the two companies that specifically rule out VoIP applications that transmit voice streams over AT&T’s 3G data network.

Ostensibly, the companies have maintained, such a limit is necessary to protect network efficiency and to limit network congestion. Still, it’s difficult to ignore the potential challenge to AT&T’s cash cow company executives fear: If a subscriber can use the company’s 3G network to transmit telephone calls, AT&T stands to lose substantial revenues in calls not placed over their cellular networks.

This has, of course, led to the release of VoIP applications for the iPhone with severely limited capabilities.

Business VoIP provider Ring Central, for example, provides a business grade phone solution for its clients, complete with an auto-attendant and dozens of other features typical of a business class phone solutions.  But Ring Central’s iPhone application is extremely limited in terms of functionality.  The application allows users to place calls from their iPhone with the appearance that they are still in their office; all other standard features such as the auto attendant or company directory are not available.

It’s limitations like this that have prompted a newly energized Obama-appointed FCC to launch official inquiries into exclusivity arrangements, such as AT&T’s and Apple’s. And with consumers becoming increasingly aware that such back room agreements — and not technology —  limit what they can do with their expensive mobile devices, demand for change is growing — and true VoIP on the iPhone, and other smart mobile devices, may only be a short time away.