More tech punditry

Now things are getting interesting, with the news that Eric Schmidt is off the board at AAPL. Officially, it’s because things like Chrome and Android and the forthcoming netbook OS are moving Google into competition with Apple, and Schmidt has to recuse himself from so much as a result that he can no longer be an effective board member. Unofficially, the FCC probe into what’s happening with Google Voice on the iPhone is probably accelerating what was inevitable anyway.
First things first: nobody wants to separate carrier and service more than I do. We have a third-world mobile infrastructure in this country, and that’s an insult to the third world, which usually has a much more robust system than the US has. Part of the reason is because we have no interoperability between carriers – for the average non-techie consumer, the only way you can change carriers and keep your existing phone is to go from T-Mobile to AT&T after spending enough time/money with T-Mob that they will unlock your phone. If you get an unlocked phone or are willing to unlock it, you can go the other direction as well. You could kind of sort of go between Sprint and Verizon, maybe, but you need their help and consent since they register phones by ESN rather than SIM card. And you can’t go from AT&T or T-Mobile to Verizon or Sprint, because we have two technologically incompatible wireless systems in this country.
In developing the iPhone, Apple didn’t have a choice – as stated before, if you want a GSM phone that works in both frequency bands, your choice is AT&T, period. They did try some other things – home activation, for one – that gave some indication that it might be possible to change the way things are done. That went right away with the iPhone 3G, though, as did the pricing – the iPhone 3G had the same carrier subsidy as every other phone, because selling the phone at retail is financially uncompetitive when every other phone is $200 off with a 2-year contract.
For all intents and purposes, the iPhone is no different from any other smartphone on AT&T’s network, with one exception: Apple has control of the App Store. Which means that unlike the Blackberry, for instance, all apps come from one place and can be throttled as needed. Example: last year, a Slingbox client for the iPhone was produced. AT&T balked, changed their terms of service, and now the client only works on Wi-Fi. Not only was the Google Voice app rejected, but all third-party GV apps were yanked from the store at the same time. Apple doesn’t really have a motive for doing this, but AT&T has every incentive to shut off GV access, as it has the potential not only to turn AT&T into a dumb pipe carrier but to cut in on possibly the most lucrative thing AT&T has: text messaging.
See, SMS is part of the GSM standard. SMS messages are not data as such – they are piggybacked on the control channels for the GSM network. They’re freebies on signals that have to carry through anyway – which is why text messaging holds up in times and places where you can’t hold a phone call long enough to let it ring – but in the last couple of years, the cost has doubled to 20 cents a pop, sending OR receiving. Most carriers have covered it by saying “ALL messages are now the same, 20 cents” but the fact of the matter is that this is nearly the only place on Earth that charges on the send AND the receive, and raised the price of text messaging despite the complete absence of any technical requirement that would cost them more.
Google Voice has its own SMS.
Google Voice, in short, has the potential to reduce any cell carrier to a dumb pipe provider. Think AT&T wants that? Given that their network can’t handle the data traffic they have now?
God rest Deep Throat’s soul, he was right: follow the money.