AT&T Ends Internet Calling Ban on iPhones

By Joelle Tessler, AP Technology Writer

WASHINGTON (AP) — AT&T Inc. said late Tuesday 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 amid a Federal Communications Commission 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.

It also comes ahead of an FCC vote scheduled for later this month on "network neutrality" rules, which would prohibit broadband providers from favoring or discriminating against certain types of Internet traffic flowing 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 U.S. and has particularly alarmed wireless carriers because it would also apply these rules to wireless networks.

AT&T said late Tuesday that it has informed Apple and the FCC that "it has taken the steps necessary" 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. "We are very happy that AT&T is now supporting VoIP applications," said Apple spokeswoman Natalie Kerris. "We will be amending our developer agreements to get VoIP apps on the App Store and in customers' hands as soon as possible."