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FCC iPhone Inquiry: Prelude to Wider Probe?

After reports surfaced that Apple had rejected Google's Voice application and related offering from third-party developers from its iPhone app store, the Federal Communications Commission didn't waste any time before stepping in to demand answers.

But to many observers, the FCC's swift response suggests that something bigger could be going on at the agency than just a fact-finding mission regarding a few blocked apps.

On Friday, James Schlichting, acting chief of the FCC's Wireless Telecommunications Bureau, sent letters to Apple (NASDAQ: AAPL), AT&T and Google (NASDAQ: GOOG) asking for details about the decision to keep the search giant's VoIP application out of the app store.

Headlining the inquiry are questions about the role AT&T (NYSE: T) plays in policing the app store, revisiting a long-simmering debate that touches on an array of issues that are likely to come to a head under the new FCC.

Barbara Esbin, a senior fellow at the Progress and Freedom Foundation, a Washington think tank, told InternetNews.com that the inquiry "indicates that the FCC is taking a serious look into calls for the imposition of wireless Net neutrality mandates and prohibitions on exclusive handset arrangements, and that it considers the two matters to be closely related."

The FCC has an open proceeding looking into the consumer impact of the exclusivity agreements between carriers and device makers that keep handsets such as Apple's iPhone tied to a single network. That issue has been the subject of a recent debate in Washington, as advocacy groups and lawmakers have been mounting criticism against the arrangements.

For outfits like Free Press, an outspoken advocate of open access to the Internet and the devices that connect to it, the FCC's move signaled a welcome check on "carrier control over an exploding mobile phone marketplace," the group's Tim Karr wrote in a blog post.

The issue of open access, another area where the FCC has an open inquiry, could be at the center of the AT&T-Apple investigation.

Apple has been the subject of repeated criticism for what some see as an arbitrary policy regarding its app store. But the issue with the Google Voice app, which offers users features like a centralized number that ports to any phone and voicemail transcription via e-mail or text message, casts a longer shadow over the regulatory future of the mobile developer platform than flare-ups like the one concerning the benignly pornographic "Hottest Girls" app.

"It's going to be bringing to a head [the question of] do you allow a third-party application that will essentially cannibalize and commoditize existing business plans," Larry Spiwak, president of the Phoenix Center, a Washington think tank that focuses on telecom policy, told InternetNews.com.

AT&T has taken heat for its role in blocking access to the iPhone app from VoIP provider Skype through its 3G network, limiting access to the competing service to iPhone users connected to a Wi-Fi network.

In 2007, Skype petitioned the FCC to apply its open-access rules for telecom providers to the wireless sector. That request harkened back to the 1968 Carterfone decision, when the FCC ruled that AT&T had to allow outside equipment to connect to its wireline network, a ruling that paved the way for devices such as answering machines, fax machines and the dial-up modem.

The FCC has not acted on Skype's Carterfone petition, which could clarify the rules for handset manufacturers and carriers in determining which apps are allowed to run on their devices and networks.

AT&T, for its part, is staying mum. "We have received the letter and will, of course, respond to it," a spokesman for the telecom giant wrote in an e-mail to InternetNews.com, declining to comment further.

Apple did not respond to requests for comment.

Much of the buzz in response to the FCC's inquiry concerned speculation about AT&T's role in persuading Apple to reject the app, much as it had fought to keep Skype from taking users away from its voice network on the iPhone.

But Spiwak has his own theory.

"This may just be a broader Apple-Google type war," he said. "If we take everything at face value, it wouldn't surprise me if Apple is trying to come up with their own unified messaging service which would compete Google's."

The escalating competition between Google and Apple could be another storyline in the app rejection. This morning, Apple announced that Google CEO would resign his position on Apple's board, given that the companies are now competing in several markets, including browsers, operating systems and mobile.

Spiwak sees a unified messaging app as a natural outgrowth of that competition, though he was quick to qualify that until the closely guarded companies issue their responses to the FCC, the search for answers will remain something of a guessing game.

"The big thing to remember here is we don't know," he said. "This is all wild speculation."

The FCC asked the companies for responses by Aug. 21, but noted in its letters that it would consider requests for confidential treatment of certain information.