Google says Apple rejected voice app for iPhone

An Apple iPhone 3GS and an Apple Macbook Pro are shown at the Apple retail store in San Francisco, California July 21, 2009.

WASHINGTON (Reuters) - Google Inc said Apple Inc rejected its Google Voice application for the popular iPhone, contradicting Apple's statement to regulators last month.

The issue prompted the Federal Communications Commission to send letters to the companies and AT&T Inc, the iPhone's exclusive carrier, demanding explanations.

The issue over Google's voice service could have far-reaching implications for the U.S. telecommunications industry. Depending on how the FCC responds, it could either pave the way for new entrants or hinder their ability to use large carriers' phones to offer discount services.

It also represents a quandary for regulators trying to promote the use of broadband among all Americans for communications, healthcare and education as wireless technology changes at such a rate that may outpace current rules.

According to redacted material made public on the FCC's website on Friday, Google said it was told of the rejection by Apple representatives after a series of meetings, telephone calls and emails.

In its response letter in August, Apple said it had not rejected the application and was still studying it because it appears to replace the iPhone's core mobile telephone functionality and user interface with its own system for telephone calls, text messaging and voicemail.

Apple maintained that position on Friday. "We do not agree with all of the statements made by Google in their FCC letter," Apple spokesman Steve Dowling said. "Apple has not rejected the Google voice application, and we continue to discuss it with Google."

The letters from the companies were in response to an inquiry launched in July by the FCC, which under new leadership is also taking a fresh look into the state of competition in the wireless industry.

The FCC, chaired by Julius Genachowski, wanted to know why Apple rejected Google Voice and what was discussed among Apple, Google and AT&T.

One quandary regulators face is the fact that Google, which is not regulated by the FCC, has the right to restrict calls or connections.

That has raised the ire of carriers like Verizon Communications Inc, AT&T, Sprint Nextel Corp and Qwest Communications International Inc. The FCC essentially told those companies in 2007 that they could not restrict calls to avoid high fees associated with adult chat lines or free conference calls by companies routing calls through rural carriers aimed at generating fees.

In the 2007 order the FCC said: "All customers will continue to be able to connect with anyone on the network that they so choose."

In the redacted portion, Google said it had no communications with AT&T.

Google said Apple also rejected the Google Latitude application over concerns it would replace preloaded maps applications in the iPhone and create user confusion.

(Reporting by John Poirier in Washington and Gabriel Madway in San Francisco; editing by Steve Orlofsky, Andre Grenon and Lisa Von Ahn)