I'm impressed with how quickly the FCC is responding (and that it's responding at all). The questions are thorough and well thought-out too. There's still hope...
The head of the FCC is now Julius Genowaski(sp?). He's a Internet tech guy. He's an investor and one of the principals who started the DC incubator LaunchBox Digital. I would assume he's a great proponent for net neutrality issues!
I remember being excited when I saw that he was appointed. Ironically, being as the head of the FCC co-founded a YC-ish thing, it's entirely possible that he also reads Hacker News, and almost certain that he reads TechCrunch – so it's really not surprising at all to see that they're monitoring the nerdier channels.
My favorite part is the bit where the respondents will have to specifically justify each bit they want kept confidential. To wit: Accordingly, “blanket” requests for confidentiality of a large set of documents are unacceptable.
We may actually get some visibility into the embarrassingly capricious and opaque App Store policies.
We may actually get some visibility into the embarrassingly capricious and opaque App Store policies.
I wouldn't hold my breath. This just adds a lot of busywork for Apple's lawyers. I'm sure they'll justify in detail every piece they want to keep private, and the FCC isn't interesting in pissing people off by blowing their secrets.
If Apple's lawyers can can justify that legally unlocking phones will lead to more drug deals and collapse of cell towers, they will be able to justify this.
I have to say it makes me a little uneasy how quickly this is happening. Isn't the market supposed to sort this out on its own?
I'm not familiar with the relevant law, so maybe I just don't understand. Is it illegal to run a proprietary phone platform and lock competitors out?. Isn't that basically what has always been the case in the pre smart phone era?
Don't get me wrong, I don't like what Apple/AT&T does and as a developer I'm not going to sign up to a platform that puts me in such a weak position. But I see that as an issue between me and Apple. I'm not sure why I need the government in it.
I think a free market has to be free -- that practices that stifle competition hurt consumers immediately.
I think Apple's locking out of Google is very similar to Microsoft's locking out of Netscape. It's reasonable tobring the samre monopolies law to bear, I think.
I agree in principle, but it's a difficult line to draw. There is no clear distinction between contracts that stifle competition and contracts that are legitimate means of competing.
There are all sorts of exclusivity arrangements or vendors selling only their own branded wares or that of their partners in their own store. It's not like Apple invented this scheme. For a very long time telcos selected every single application that was allowed to run on their network.
Consumers have their own means of defending against such practices. They can simply stop buying iPhones for instance. It's not like there were no alternatives. As a consumer, in this case, I have to say don't need the government.
It's not really comparable, sizewise Microsoft was much bigger than netscape at the time, and the only route to the desktop was through microsoft. The iphone is not a monopoly by any stretch of the imagination, even though the 'hip' people all seem to have them.
(hm, the implicit conclusion is that I'm not hip...)
Not the same size, but vastly more controlling. On a windows machine you could always install netscape. On an iPhone you have to download apps only from apple-approved sources.
I suppose the question is whether the concerns of one marketplace (handsets) should override theneed of another (apps). As someone who hasalready bought an iPhone for what is a considerable amount of money, I don't like the turn towards crippling a product I thought was mine.
It would be less if an issue if the iPhone weren't so popular and AT&T weren't involved. But the iPhone takes a nearly dominant share of the smart-phone market right now, and AT&T has even been convicted as a monopolist in the past. The two-year service contracts and shortage of decent competitors probably contribute, too.
It was cute when Apple locked down its operating systems, because there was no serious threat to the market -- but with two big companies involved in flagrantly anti-competitive behavior, in a market the government understands better, there's a higher standard for fair play here.
There's a pretty large number of credible competitors in the smart-phone market - RIM, Palm, Nokia, Google, Microsoft and probably a few others. Also, there are other carriers than just AT&T.
So at this point I fail to see what's the issue other than some disappointed iPhone users. Maybe there's a legal problem. We will see.
It looks like there's some pending legislation that requires immediate investigation.
"In light of pending FCC proceedings regarding wireless open access (RM-11361) and handset exclusivity (RM-11497), we are interested in a more complete understanding of this situation."
I'll bet those have something to do with the swift response by the FCC.
Particularly interesting are the last two questions:
5. What other applications have been rejected for use on the iPhone and for what reasons? Is there a list of prohibited applications or of categories of applications that is provided to potential vendors/developers? If so, is this posted on the iTunes website or otherwise disclosed to consumers?
6. What are the standards for considering and approving iPhone applications? What is the approval process for such applications (timing, reasons for rejection, appeal process, etc.)? What is the percentage of applications that are rejected? What are the major reasons for rejecting an application?
Yes, this is very good. A clear definition will help most developers not waste resources on executing a great idea only to see it rejected later. The light of day clears up many issues.
Quick summary of 47 C.F.R. § 0.459, for those interested in how much will be confidential.
Confidentiality requires a "preponderance of the evidence", as judged by the acting chief (James D. Schlichting). He will base his decision off the following information:
(1) Identification of the specific information for which
confidential treatment is sought;
(2) Identification of the Commission proceeding in which
the information was submitted or a description of the
circumstances giving rise to the submission;
(3) Explanation of the degree to which the information
is commercial or financial, or contains a trade secret
or is privileged;
(4) Explanation of the degree to which the information
concerns a service that is subject to competition;
(5) Explanation of how disclosure of the information
could result in substantial competitive harm;
(6) Identification of any measures taken by the
submitting party to prevent unauthorized disclosure;
(7) Identification of whether the information is
available to the public and the extent of any previous
disclosure of the information to third parties;
(8) Justification of the period during which the
submitting party asserts that material should not be
available for public disclosure; and
(9) Any other information that the party seeking
confidential treatment believes may be useful in
assessing whether its request for confidentiality
should be granted.
Because this information was requested by the FCC, Apple/AT&T/Google can't withdraw the information if the confidentiality request is denied. They can apply, however, for a judicial stay.
Wow, how great is this? And by reading the questions, it actually seems like there is someone in a government organization that a) knows what they are talking about and b) isn't scared to write in an unequivocal way
From a person that usually follows wall street matters, this type of letter is a shot out of the blue. Wall street "enforcement" letters have so many loopholes any reasonably intelligent person could drive a mack truck through them, the wording of this sounds like someone in the government screwed up and accidentally hired someone that has competence, and gives a sh*t. What a breath of fresh air in America.
I know that this is probably not very comme il fait to say on HN, but really, I don't see what all the righteous indignation at AT&T / Apple is about.
You signed up for a highly proprietary and controlled walled garden when you got an iPhone. I did too. When you ran into some limitations you didn't like, you jailbroke it and loaded some things Apple and/or AT&T didn't want you to load.
If you don't like this whole paradigm, why get an iPhone? Why not get an Android or something else? For that matter, why does Google bother releasing an iPhone app; why not build the Android into a handset that is tightly coupled/integrated with Google Voice? Seems like that would be a fine marketing coup for the former.
I'm just not sure what there is to whine about here. Of course enhanced voice application services aren't going to be allowed on the phone because they are perceived as encroaching on possible or actual carrier revenue streams. Of course you can't put applications on it that make a "dumb pipe" of the carrier's data network in order to deliver voice. If you don't like this set of circumstances, pursue a solution by competitive means, not legislating it; vote with your feet and quit buying iPhones until the exclusive distribution contract with AT&T expires, and thusly encourage Apple to diversify its retail blend to include other network operators with more liberal approaches.
Really - what, do you expect that a de facto contractually sanctioned monopoly (AT&T) is going to act in the spirit of the public welfare or consumer choice when it perceives a conflict of interest? Seriously?
Neither the courts nor the FCC should be looking at this. Consumers just need to take their wallet elsewhere.
EDIT: I very much concur with the poster above who speculated that AT&T's 3G network doesn't have the bandwidth to handle a large amount of relatively constant (at a certain baseline) voice traffic generated by something as popular as GV. Anybody who deals with mobile issues routinely can tell you that AT&T's 3G network is positively the worst in the land, and oversubscription in many MSAs is unbearably high. You want 3G bandwidth, go with Sprint, or maybe T-Mobile.
About your edit footnote, what do you mean by GV voice traffic? GV is not a VOIP solution, it calls your phone which uses your subscription minutes. Usage might increase a bit because international rates are lower, but I fail to see how that could overload AT&T's bandwidth.
I was under the impression that the GV client also provides some degree of VoIP client functionality.
It would be hard to see what is controversial about this proposal if that weren't present. What, is AT&T complaining about more subscription minutes being used?
AT&T is freaked the fuck out because your Google Voice number is actually portable to any carrier, completely dynamically, in perpetuity.
Number portability in the US as it is now only works if your new billing address is in the same zip code as your old number, and usually doesn't work at all when you're trying to port out of a VoIP provider or in to a PoTS line.
Really? I ported an Atlanta number from T-Mobile to Sprint without a single problem here in Seattle. They did ask me for an Atlanta zip code during the process, but it never came up as an issue.
Phone number portability (one carrier to another) is mandated by law. They gave you no problems because they mustn't. GV style portability (a virtual number that works with any carrier) enjoys no such privilege, so they can, and in Apple/AT&T's case, have, blocked it.
It's not "a virtual number that works with any carrier." I can assure you that the number is (1) natively homed or (2) ported - to a particular physical, facilities-based carrier (generally a CLEC) at any time. In a lot of places, Google Voice is using bandwidth.com's new CLEC license holdings (after they stopped being a pure Level3 reseller), and probably the usual national-level multibillion dollar folks that are interconnected to everyone, everywhere and have a lot of direct end-office trunking: Global Crossing, XO, Level3, etc.
For example, here in Atlanta, my friend has a Google Voice number out of 404-939. If you take a look at the pooling and/or NANPA assignment information for that block, you'll find it's pooled and held by bandwidth.com's new CLEC:
No, Apple / AT&T is concern about competition and letting their customers easily move between carriers, as GV permits a single portable phone number, messaging, etc.
I think the uproar is not so much about Apple banning aplications willy nilly, it is more about them simultaneously trying to portray an image (vs Microsoft, specifically) of being holier than thou, but at the same time REFUSING to state what applications are allowed and what are not. As it is, they have thousands of freelance programmers working their asses off developing awesome apps....they take the good ones, and anything that threatens their platform, the quash, and refuse to say why.
I think people want some honesty, especially from a company that uses slogans like "Think Different".
...and anything that threatens their platform, the quash, and refuse to say why
Isn't the answer already contained in your question? The real situation is that developers know that they are walking a fine line with applications that "threaten their platform". No big surprise there.
I get a feeling that banning Google Voice was an attempt to be more consistent, as some have blamed Apple for cronyism in relation to Google.
This can't end well. At the end of the day, Apple and AT&T have the right (or should have the right) to make any agreements they find necessary, and customers obviously have the power to reject the iPhone and AT&T if this matters enough to them. The government gets involved when consumers want to have their cake and eat it too -- you want the iPhone Apple & AT&T are offering BUT you aren't willing to accept their price and terms.
I know this isn't going to be a terribly popular point here, because, well, we all do want to get our way. But just consider how much you'd like to find yourself on the receiving end of one of these letters.
Not true. AT&T does not own the spectrum they use, it is a publicly owned natural resource, licensed to them under specific rules, and can be revoked by the FCC for failing to comply with the regulations.
The government is not getting involved because people want to have their cake and eat it to, (although that is a pretty good default assumption), but because there appears to be collusion involving regulated resources.
This situation is ironic. Developers must submit to their Apple/AT&T overlords if they want to play in the Apple sandbox. Now Apple/AT&T are discovering their sandbox is within a larger federally-regulated sandbox, and they too are subject to overlords. Payback's a bitch. I don't have a lot of sympathy after reading about the forced refunds for previously approved apps.
You are being over-broad with the scary word collusion. Collusion would be AT&T, Sprint, T-Mobile, Verizon, etc. agreeing to keep voice revenues for the industry high by crippling mobile data. Nothing in a carrier's agreement with a handset vendor could possibly qualify for collusion.
As for violating regulations, please find for me the regulation that they have violated. It seems to me that their present sin consists of doing something unpopular.
This is a valid point, but I'm not convinced that it's OK for companies to act/co-operate in a way that is this detrimental to their customers just because they aren't supposed to be competitors. Based on the questions asked, the FCC seems to be trying to find out if this exclusivity agreement is harming consumers or not, which seems like a decent goal. If this inquiry leads to some transparency from Apple/AT&T, so much the better, right?
Apple and AT&T should have every right to be as opaque as they want. If you don't support their policies and pricing, switch to another carrier and buy another phone.
In a completely non-monopolistic scenario, which this is, the government should have no concern whether a company's action's harm customers or not, since the customer has complete choice in whether to buy the service or not.
This is precisely a situation in which the customer wants to have his cake and eat it too. Regulated resources are by definition a case when the customer wants to have his cake and eat it too.
The FCC said why they wanted this information. They wanted this information as part of its examination of net neutrality and exclusive phones. The FCC doesn't even look at collusion and antitrust - the FTC does.
The idea that there's some monolithic "government" is juvenile at best.
The idea that there's some monolithic "government" is juvenile at best.
Thank you. It should, however, be noted that as Goldman Sachs rehires, the government will get bigger. Oh wait, I forgot that I'm not Matt Taibbi, so scratch that last sentence.
Collusion is defined as "secret agreement or cooperation especially for an illegal or deceitful purpose" at m-w.com. I would think this qualifies, and I used this word instead of the more inflammatory conspiracy, which would also be technically accurate. I was not using it to be scary, I was simply trying to describe the circumstances as they appear at the moment.
The FCC is investigating to see if any regulations had been violated; proof and a finding of guilt or innocence will come later, but it seems to me there is probable cause to investigate at this point.
The spectrum is a natural resource, but what about the devices? It will be interesting to see the extent to which the FCC can regulate devices offered on a carrier. I'm hoping some sort of number portability / anti-compete clause lets them push GV through and force some openness on Apple's end in regards to app approval.
Unfortunately, the iPhone is NOT a publicly owned natural resource, but maybe phone numbers are.
And your iPhone, once you've paid for it, is not Apple's anymore. Its yours.
Congress has passed legislative caveats around the DMCA for cell phones. Meaning you can unlock them. Well at least I haven't seen Apple or anyone else yet sue someone or call the FBI for someone doing so. So I guess they don't want to test the waters around whatever legislation actually was passed (of course, I don't read hundreds of pages of legislation, so I'm speaking off stuff I"ve read about it). The purpose of such legislation is part of enabling consumers to not be bound to a carrier. I don't know what else exists, but its clear Congress has made some progress on letting cell manufactures know that carrier freedom is on the landscape.
This can't end well. At the end of the day, Apple and AT&T have the right (or should have the right) to make any agreements they find necessary ...
So can I have the right to broadcast my own GSM signal in the 900 MHz range, or a perpetual sweet-heart franchise agreement with my local municipal government to run last-mile internet to my neighborhood's houses?
These are natural monopolies we're dealing with. My options are constrained to carriers that have been granted guaranteed access to public airwaves by the FCC. The carriers then use technical (carrier locks), legal (contracts), and social (difficult cancellation processes) means to lock consumers in.
The carriers then collude with handset makers to restrict consumer choice further by locking handset features, and restricting the applications that they run. There are ways around this (such as buying third party unlocked, unrestricted phones), but carriers and handset makers leverage their government-backed market position to discourage consumer adoption.
There is nothing natural about a monopoly (or in this case, oligopoly) ordained by government. And that is the problem that should be addressed directly. Current government policies create an absurd amount of artificial spectrum scarcity.
Edit: Obviously I wasn't clear here -- I should have been straightforward rather than going with a clever turn of phrase. I meant to say, as a point of accepted definition, that government-granted monopolies are not 'natural monopolies.' Natural monopolies are monopolies that occur 'naturally' in the market because of conditions or extreme capital requirements.
I didn't have to read the Wikipedia page. I linked to it for your benefit because you were degrading someone's comment when they were using a term that anyone with any exposure to economics would be familiar with.
I don't want to quibble about this forever, but you're still missing my point. I said there wasn't anything natural about a government-granted monopoly because government-granted monopolies are not "natural monopolies" (in the academic economic sense of the phrase). I asked if you read the WP page because I felt that if you had, and had read my comment as well, that it would be clear to you that was my point.
Yes, but they are allowed to continue to exist under government scrutiny. Most local utilities are set up this way. If you're the first there, you usually get to be the only supplier.
We're quibbling about terms, and I always fear at this point in a thread that the need to be right might overwhelm continued reading comprehension. But in economic parlance, if (let's say) a power company came to be a dominant monopoly in a given area without government support, that would be a natural monopoly. If the government then stepped in to regulate the power company as a utility and simultaneously excluded competitors by government force, the power company becomes a coercive monopoly. Is it still a natural monopoly? It's hard to say, because conditions change, but the government grant of exclusivity remains constant. Maybe a new technological innovation would have let a competitor emerge, breaking the natural monopoly. But we would never know as long as the government continued to exclude competitors by force of law.
We may just be disagreeing to disagree at this point. I'll let you have the last word here.
But we would never know as long as the government enforced the coercive monopoly.
This is a one-sided description and a false dichotomy. A non-regulated natural monopoly can be just as suppressive as a government enforced-coercive monopoly. A regulated natural monopoly does not also require the creation of a government-enforced coercive monopoly.
Please provide an example of where this has ever been the case. That is, where a company without a government grant of exclusivity (or other sorts of government favoritism) in a market has been able to 1) sustain that monopoly for more than a few years, and 2) to leave their customers worse off than if the business had never existed in the first place.
That example discusses a naturally competitive situation and how that wasn't apparently optimal. No one was worse off for the companies existing, and they weren't even monopolies, making it irrelevant to our discussion here. The example claims society was better off when the government established monopolies that could be profitable. The government could have done that at any time -- the existing private companies didn't provide any impediment to that. So that's all fine and good, but how does that answer my question? I'll let you have the last word.
Clearly you didn't read it closely enough. They were worse off for the lack of an affordable water supply leading to a lack of sanitation and epidemic.
The inefficient private solution stayed the adoption of a publicly administered one.
You're right about reading comprehension degrading. So I'll spell this out simply. When Local Power Company establishes a regional power grid, they are the largest by virtue of being the first. Economies of scale prevent other firms from coming into the market. They would have to build an entirely separate, but redundant, power grid without any indication that customers, who need power to begin with, would purchase from them. This means they have, as the Wikipedia page reads, "an overwhelming cost advantage over other actual or POTENTIAL competitors." (Emphasis mine) This is why the government often steps in and legalizes the natural monopoly.
Both. The first market entrant has "... an overwhelming cost advantage over other actual or potential competitors".
Municipalities also have natural incentives to provide sweet-heart franchise agreements -- it's generally too expensive to do otherwise once the infrastructure is in place, often partially subsidized.
And that is the problem that should be addressed directly. Current government policies create an absurd amount of artificial spectrum scarcity.
Liberalizing spectrum allocation policy -- or opening the airwaves to anarchy -- wouldn't solve the problem that wireless telecoms is a very strong natural monopoly.
Monopoly? Last I checked there were multiple competing mobile carriers. You do have to put a lot of capital at risk though to be a national carrier. Which is exactly the point, really. Someone put a lot of capital at risk, and now that their bet has worked out, the regulators want to step in and tell them how to run their business and (in many cases) how much return is fair for them to get from their investment.
Regulation of this sort is the same as partial nationalization, and has the same effect to a measured degree. When people anticipate that the returns on their winning bets will be 'moderated,' or that they will have to set business policies for the 'greater good,' they will in the future make less risky bets or put less capital at risk.
Monopoly? Last I checked there were multiple competing mobile carriers. You do have to put a lot of capital at risk though to be a national carrier. Which is exactly the point, really. Someone put a lot of capital at risk, and now that their bet has worked out, the regulators want to step in and tell them how to run their business and (in many cases) how much return is fair for them to get from their investment.
Natural monopoly. Not the same thing.
The cellular industry has seen massive consolidation and reduction in consumer choice over the past 15 years -- the existing 5 national wireless carriers (AT&T, Verizon, Sprint, T-Mobile, U.S. Cellular) are comprised of literally hundreds (if not thousands) of formerly independent regional carriers. Cingular itself started as a conglomeration of 100+ regional carriers, before a few more mergers made Cingular into the new AT&T.
This is not a particularly strong testament to consumer choice and competition in the face of a natural monopoly.
I see no reason why Apple and AT&T - who are corporations, not people - should have the right to do as they please. Our government grants corporations the ability to exist because doing so is beneficial to society. If a corporation is doing something that is harmful to consumers - and potentially society as a whole - then I want the government to step in.
Corporations are just collections of people (except for the grant of limited liability, which is really an abuse).
Too often, I think, we judge 'harmful' by the impossible standard of "could I imagine things being better if I could force others to do things exactly my way" rather than "would we be better off if they didn't exist at all."
So that is to say, sure, if a company is actually causing a harm, in the legal sense of the word (committing fraud, breaking contracts, etc.), then they should have to pay restitution for that. That's what the law is for. Not to second-guess how companies could better serve their customers.
Corporations are also legal entities that are separate from the people that comprise them, so they shouldn't have the same kind of rights an individual would.
Not necessarily. Some of the FCC's questions are simply about clarifying policies. Maybe the average consumer won't read through (or care about) a list of prohibited app or app categories, but it sure would help developers.
That's nice and all, but no one is forcing developers to support Apple and AT&T either. Apple was never really thrilled with the idea of having third-party developers. Let's not be too patronizing to AppStore developers -- they all knew (or should have known) what they were getting into. Apple's agreement has always put developers at their mercy.
Apple is manufacturing and selling telecommunications devices. That being the case, the FCC's purview extends well beyond simply clearing the devices for interference. That's the standard a device is held to if it may emit EM radiation, but that emission is not meant for communications purposes, AIUI. The bar is set rather higher, and the FCC's powers rather deeper, if the EM spectrum the devices emit on is actually meant to be used for communicative purposes -- particularly if it uses a licensed band.
There are no legal proceedings, the FCC is just asking so it can have the full story. If AT&T is leaning on Apple, then it is possible that AT&T is illegally using the radio spectrum we licensed to them. They need to know what's going on, though; they don't want to guess.
You've hit the nail on the head. It's not what Apple's doing - it's what the carriers may be doing. Given the way the carrier market works at the moment, consumers do deserve competition protection. The FCC is quite right to stick its oar in here, even it it's only to say "hey guys, I'm watching you".
Anyone think a lot of apps are rejected due to AT&T network not being able to handle bandwidth intensive or highly popular apps?
The network is not able to handle the load now and if they allowed Skype, Sling and others it probably be even worse. Though if iPhone was not exclusive to them, a lot of their problems would be solved!
This is an argument that can fly with Skype and Sling, but not with Google Voice. When you make a call on Google Voice, you're still using your regular AT&T minutes (in other words, it's not going over the data connection).
Sure that's why I said apps that are bandwidth intensive or highly popular.
Although just recently released GV if released on the iPhone would become a staple app; free SMS. Thus, with everyone using it would put a further strain on AT&T's already drained network, as well cut into PROFITS. So, it could possibly be both.
There is a Techcrunch article where AT&T disavows any actions in this regard. (As always, take with grain of salt. Gruber says its AT&T's fault, etc etc)
I know the FCC doesn't care much about the rest of the world, but I am hopeful the questions and answers might force some reevaluation of restrictions to make AT&T happy being worldwide enforced. (Speaking specifically of Skype not being allowed to do voice calls on 3G, no carrier in Sweden would object to it)
Also these applications exist and are allowed on other phones on AT&T. Of course the popularity of the iPhone, bundled with the App Store single point of distribution makes it possible for AT&T to insert themselves and have any control. Perhaps if they'd be willing to build out their network more instead of fighting the future.
It was inevitable that the feds will step in. If MS would have controlled any software running on Windows then how good would have Windows be? But that would have never fly!
Same here once you release a software product that carries an API you policing it can result in an unwanted results!
