IPhone maker Apple Inc told U.S. regulators it has not approved Google Inc's Voice application, which could challenge the wireless industry's giants, because it interferes with the iPhone user experience.

Apple told the Federal Communication Commission (FCC) on Friday that the Google app appears to replace the iPhone's core mobile telephone functionality and user interface with its own system for telephone calls, text messaging and voicemail.

Contrary to published reports, Apple has not rejected the Google Voice application, and continues to study it, Catherine Novelli, Apple vice president for worldwide government affairs, said in a letter to the FCC.

The letter was in response to an inquiry launched last month by the FCC, which under new leadership is taking a fresh look into the state of competition in the wireless industry.

The FCC, chaired by Julius Genachowski, wants to know why Apple rejected the Google Voice and what was discussed among Apple, Google and AT&T Inc, the exclusive U.S. carrier for the iPhone.

Responses by the companies were due on Friday. The FCC had no immediate comment.

The application by Google, which has entered the wireless market with its own smartphone operating system called Android, is seen by some as a competitive threat to the voice services that come with the iPhone.

AT&T was not asked about the matter by Apple at any time, nor did we offer any view one way or the other, said Jim Cicconi, AT&T senior executive vice president for external and legislative affairs.

T-Mobile, a unit of Deutsche Telekom AG, provides service for Google's Android.

ROLE OF VOIP

The issue could have far reaching implications for the U.S. telecom 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.

With some prodding from several U.S. senators, the FCC is also reviewing exclusive handset arrangements between wireless carriers and cell phone makers and how they affect competition and choice in the marketplace.

Experts are watching what role online calling features, such as voice over Internet protocol (VoIP), will play in the fast changing wireless industry.

Apple said it does not know if there is a VoIP element in the way Google Voice calls and sends text messages but said it has approved some VoIP applications like Skype, owned by online auction site eBay Inc, for use over Wi-Fi but not on AT&T's 3G network.

Apple said there is a provision in its agreement with AT&T that obligates Apple not to include functionality that allows a customer to use AT&T's cellular network to originate or terminate a VoIP session, without first getting AT&T's permission.

Apple honors this obligation, Novelli said.

AT&T, however, said it regularly reviews its policies regarding certain features and capabilities, leaving open the possibility of allowing the use of VoIP on its network.

We plan to take a fresh look at possibly authorizing VoIP capabilities on the iPhone for use on AT&T's 3G network, Cicconi said.

Google also filed a response letter with the FCC but portions concerning why Apple rejected its Voice application were redacted.

The Mountain View, California-based company said in the letter that it had no additional proposed iPhone applications pending with Apple.

(Reporting by John Poirier; Additional reporting by Sinead Carew in New York and Gabriel Madway in San Francisco; Editing by Gary Hill, Toni Reinhold)

Electronics Android Apple Google