AT&T Nixes Google Voice on the iPhoneAT&T Nixes Google Voice on the iPhone

For real creativity to flourish in the mobile space, we have to take the decision making out of the hands of the monopolists.

The unholy alliance strikes again. Google has confirmed that the Google Voice application for the iPhone has been removed from the iPhone app store. VoiceCentral, who offers a service similar to Google Voice had their iPhone application pulled as well. As Apple is typically close to Google, the immediate speculation was that the app had been pulled at the request of AT&T Wireless, the sole carrier who can offer the iPhone here in the US. Clearly AT&T's concern is that the free SMS and deeply discounted international calling services offered on Google Voice could potentially eat into their revenue stream. John Gruber of Daring Fireball confirmed through a source that this was indeed the case.I have expressed my view on the unholy alliance more than once, and use that moniker to refer to the exclusive distribution deals struck between carriers and handset manufacturers that tie a subsidized handset to a long-term cellular contract. This may have been a good strategy to launch the cellular industry, a time when cell phones were basically "phones." When the differences among cellular handsets were largely cosmetic, the downside of these exclusivity deals was probably acceptable.

However, the cellular industry has long passed the launch stage, and despite the carriers' convoluted logic to maintain this business model, this plan is clearly having a detrimental impact on the mobile industry as a whole. The Google Voice flap is not a first. AT&T has put the kibosh on apps that may have resulted in a negative impact on the revenue stream before. Last year they canned NullRiver's tethering application for the iPhone, and as of today, they still don't support an iPhone tethering capability.

The Google Voice move is taking this paranoia into a new arena. We all know that Google is promoting their own mobile operating system, Android, that will be competing directly with the iPhone. Android will be an open operating system, though today only T-Mobile has a handset, the G1 from HTC, that supports it. A number of other manufacturers including Motorola and Samsung are developing Android-based devices, so it appears that "Android" will be available over different carrier networks, but the Android devices will still be offered on the terms of the unholy alliance.

What is clear is that as the mobile industry continues to evolve, we can expect even more strange entanglements and more convoluted competitive conflicts. The only predictable outcome is that the carriers use whatever leverage they can muster to shape the development of the mobile industry to their advantage.

Networks are networks and devices are devices. The carriers' position that handset manufacturers would not invest in developing new handsets in a truly competitive market is too ludicrous to merit comment. However, don't expect the handset manufacturers to argue too loudly on their own behalf. If the carriers will bulldoze their customers this aggressively, we can only imagine the implications to a supplier who strays off the reservation.

Even if exclusivity ended and subsidized handsets were offered as an option, it could well be that many customers would still opt for the subsidized option. However, for real creativity to flourish in the mobile space, we have to take the decision making out of the hands of the monopolists. Enterprise users have the most to gain, because handset exclusives are just one more impediment to mobilizing productivity-enhancing applications that can help drag us out of this recession. It's time to cut the Gordian Knot.For real creativity to flourish in the mobile space, we have to take the decision making out of the hands of the monopolists.