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AT&T OK’s Net calls on iPhone

By Joelle Tessler
Associated Press / October 7, 2009

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WASHINGTON - AT&T Inc. said late yesterday that it will begin allowing iPhone owners to use Internet calling services on its wireless network.

The phone giant, the exclusive wireless provider for Apple Inc.’s iPhone, has until now allowed Internet calling services to work on the popular device only over Wi-Fi connections. Those connections generally have limited mobility and therefore present less of a competitive threat to AT&T’s core wireless calling business.

The move comes two months after the Federal Communications Commission sent letters to AT&T, Apple, and Google Inc. asking why the Google Voice messaging and calling application has not been approved for use on the iPhone.

It also comes amid an FCC inquiry into competition in the wireless industry. Among other things, that inquiry will examine handset exclusivity deals, such as AT&T’s agreement with Apple giving AT&T exclusive access to the iPhone.

In addition, the FCC is scheduled to vote later this month on “network neutrality’’ rules, which would prohibit broadband providers from favoring or discriminating against certain types of Internet traffic over their lines.

FCC chairman Julius Genachowski, one of three Democrats on the commission, wants to impose net neutrality rules to ensure that broadband providers don’t abuse their power over Internet access to favor their own services or harm competitors.

His plan faces stiff opposition from the phone and cable companies that provide most broadband connections in the United States and has particularly alarmed wireless carriers because it would also apply these rules to wireless networks.

AT&T said late yesterday that it has informed Apple and the FCC that it has taken the necessary steps to enable Voice over Internet Protocol - or VoIP - services on the iPhone over its 3G wireless network. AT&T said it made the decision “after evaluating our customers’ expectations and use of the device compared to dozens of others we offer.’’

The company already allows subscribers to make Internet calls over its 3G network using other wireless devices.

Apple welcomed the announcement and said it will amend its developer agreements to get VoIP applications on the App Store as soon as possible.

Genachowski also praised AT&T’s move.