“We are very happy that AT&T is now supporting VOIP applications,” said Apple (AAPL) 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.”

But the new policy hasn’t gone over well with AT&T investors. Shares in the company slipped on the news yesterday and they’re falling still further today. AT&T (T) is trading at $26.21 as I write, down more than two percent from its open. Why? Perhaps due to concerns that the carrier might take a revenue hit when iPhone owners who are using telephony services to make cheap calls switch to low-minute voice plans.

As JP Morgan analyst Mike McCormack notes, voice accounts for $50-$60 of the $95 in monthly revenue generated by the typical iPhone user. If the average user were to drop AT&T’s unlimited voice plan ($99.99/month) in favor of its cheapest ($39.99/month), the carrier could lose upward of 20 percent of voice revenue.

That’s an ugly drop. And while AT&T might offset it by raising its data plan rates, doing so would inevitably outrage customers who are already giving it hell for poor coverage and lousy call quality.

“iPhone is an innovative device that dramatically changed the game in wireless when it was introduced just two years ago,” AT&T Mobility and Consumer Markets chief Ralph de la Vega said in a statement. “Today’s decision was made after evaluating our customers’ expectations and use of the device compared to dozens of others we offer.”

It was also doubtless made after evaluating Verizon’s (VZ) announcement this morning that it will begin offering phones running Google’s (GOOG) Android OS and its Google Voice app in a matter of weeks. I’m sure that Federal Communications Commission investigation was “evaluated” as well.

Anyway, good news for consumers–assuming AT&T’s network can handle the additional strain, which is anything but a sure thing at this point.

UPDATE: The VoIP community was quick to congratulate AT&T for the move. “All of us at Skype applaud today’s announcement by AT&T (in an FCC filing to be published shortly) that it’ll open up its 3G network to Internet calling applications such as Skype,” Skype CEO Josh Silverman wrote in a post to the company blog. “It’s the right step for AT&T, Apple, millions of mobile Skype users and the Internet itself. Nonetheless, the positive actions of one company are no substitute for a government policy that protects openness and benefits consumers. We’re all looking forward to further developments that will let people use Skype on any device, on any network.”

Interesting, given the recent flap over Google Voice for iPhone, which Apple (AAPL) hasn’t yet allowed into its iTunes App Store because it “appears to alter the iPhone’s distinctive user experience by replacing the iPhone’s core mobile telephone functionality and Apple user interface with its own user interface for telephone calls, text messaging and voice mail.”

How is Vonage’s (VG) app different? Its features and functionality are certainly very similar to those of Google Voice.

Apple won’t say, but the company did tell the Associated Press that Vonage’s app falls under the same category as other VoIP applications that have already been approved for the iPhone.

Not a week after confirming its interest in the netbook market, Nokia leapt into it, uncrating the Booklet 3G–a 2.8-pound “mini-laptop” with 3G, WiFi and A-GPS support, a 10-inch HD-ready display and a claimed 12 hours of battery life. The machine will feature an Intel (INTC) Atom processor and likely run a version of Microsoft’s (MSFT) Windows. Finally, it will support Ovi, Nokia’s (NOK) version of Apple’s (AAPL) App Store.

“A growing number of people want the computing power of a PC with the full benefits of mobility,” Kai Oistamo, Nokia’s executive vice president for devices, said in a statement. “We are in the business of connecting people and the Nokia Booklet 3G is a natural evolution for us. Nokia has a long and rich heritage in mobility and with the outstanding battery life, premium design and all day, always on connectivity, we will create something quite compelling. In doing so we will make the personal computer more social, more helpful and more personal.”
 
Quite a pledge. And one that Nokia must deliver on if it’s to become a full-fledged mobile solution provider.

“Nokia is not trying to move into the extremely competitive market for PCs in general, even though it describes the Booklet 3G as a mini-laptop. What it is doing is moving to protect its key markets,” said Gold Associates analyst Jack E. Gold. “Indeed, netbooks are increasingly being sold as mobile device alternatives (or supplements) to smartphones. Many have 3G radios included, can make voice calls (via VoIP) and are increasingly being sold and subsidized by traditional wireless carriers. Therefore, it is logical to see Nokia make this move.”

“Contrary to published reports, Apple has not rejected the Google Voice application, and continues to study it.”

So begins Apple’s response to the Federal Communication Commission’s inquiry into its rejection of the app and of its App Store approval process. Seems Google Voice was withheld from the App Store not because of any ill feeling toward Google or a nefarious request from AT&T, but because it too closely mimics the iPhone OS, including management of calls, voicemail and text messages. From Apple’s statement:

Question 1. Why did Apple reject the Google Voice application for iPhone and remove related third-party applications from its App Store?

The application has not been approved because, as submitted for review, it appears to alter the iPhone’s distinctive user experience by replacing the iPhone’s core mobile telephone functionality and Apple user interface with its own user interface for telephone calls, text messaging and voicemail. Apple spent a lot of time and effort developing this distinct and innovative way to seamlessly deliver core functionality of the iPhone. For example, on an iPhone, the “Phone” icon that is always shown at the bottom of the Home Screen launches Apple’s mobile telephone application, providing access to Favorites, Recents, Contacts, a Keypad, and Visual Voicemail. The Google Voice application replaces Apple’s Visual Voicemail by routing calls through a separate Google Voice telephone number that stores any voicemail, preventing voicemail from being stored on the iPhone, i.e., disabling Apple’s Visual Voicemail. Similarly, SMS text messages are managed through the Google hub—replacing the iPhone’s text messaging feature. In addition, the iPhone user’s entire Contacts database is transferred to Google’s servers, and we have yet to obtain any assurances from Google that this data will only be used in appropriate ways. These factors present several new issues and questions to us that we are still pondering at this time.

Question 2. Did Apple act alone, or in consultation with AT&T, in deciding to reject the Google Voice application and related applications? If the latter, please describe the communications between Apple and AT&T in connection with the decision to reject Google Voice. Are there any contractual conditions or non-contractual understandings with AT&T that affected Apple’s decision in this matter?

Apple is acting alone and has not consulted with AT&T about whether or not to approve the Google Voice application. No contractual conditions or non-contractual understandings with AT&T have been a factor in Apple’s decision-making process in this matter.

In a response of its own, AT&T (T) also said this was the case:

1(a). What role, if any, did AT&T play in Apple’s consideration of the Google Voice and related applications?

AT&T had no role in Apple’s consideration of Google Voice or related applications.

1(b). What role, if any, does AT&T play in consideration of iPhone applications generally?

The Apple App Store is owned, operated and controlled by Apple, not AT&T, and Apple makes the decisions regarding the specific applications that are approved for use on the iPhone or included in the Apple App Store. AT&T does not participate in Apple’s day-to-day consideration of specific applications, nor does Apple typically notify AT&T prior to including applications in the App Store. Apple also does not usually advise AT&T after specific applications have been added to the App Store, which reportedly contains more than 65,000 applications. AT&T has had discussions with Apple regarding only a handful of applications that have been submitted to Apple for review where, as described below, there were concerns that the application might create significant network congestion.

And what is Google’s (GOOG) public reply to the whole affair? Nada. The company had more to say to the government, via a response to FCC queries. But in the copy of the document that’s been released for public consumption, the most interesting stuff has been redacted. To wit: “What explanation was given (if any) for Apple’s rejection of the Google Voice application?…Please describe any communications between Google and AT&T or Apple on this topic and a summary of any meetings or discussion.” (Click on text below to enlarge.)

Now that’s a little odd, isn’t it? Why would Google ask the FCC to redact portions of its statement? Says Google: “[Because the redacted] information relates specifically to private business discussions between Apple and Google and, as such, it constitutes commercial data ‘which would customarily be guarded from competitors.’”

That satisfy your curiosity? Doesn’t satisfy mine, either.

(Peter Kafka contributed to this post.)

UPDATE: AT&T may not participate in “Apple’s day-to-day consideration of specific applications,” but its presence is still felt during the approval process. From Apple’s (AAPL) response:

There is a provision in Apple’s agreement with AT&T that obligates Apple not to include functionality in any Apple phone that enables a customer to use AT&T’s cellular network service to originate or terminate a VoIP (voice over Internet Protocol) session without obtaining AT&T’s permission. Apple honors this obligation, in addition to respecting AT&T’s customer terms of service, which, for example, prohibit an AT&T customer from using AT&T’s cellular service to redirect a TV signal to an iPhone. From time to time, AT&T has expressed concerns regarding network efficiency and potential network congestion associated with certain applications, and Apple takes such concerns into consideration.

UPDATE: An interesting nugget from AT&T’s statement:

It is widely recognized by economists and jurists that parties to strategic alliances in competitive markets may enter into contracts to promote and protect their respective business interests and to refrain from taking actions adverse to those interests.12 Consistent with such lawful, economically efficient practices common among parties to strategic alliances, including participants in the mobile wireless marketplace,13 AT&T and Apple agreed that Apple would not take affirmative steps to enable an iPhone to use AT&T’s wireless service (including 2G, 3G and Wi-Fi) to make VoIP calls without first obtaining AT&T’s consent. AT&T and Apple also agreed, however, that if a third party enables an iPhone to make VoIP calls using AT&T’s wireless service, Apple would have no obligation to take action against that third party….AT&T indicated to Apple that it does not object to Apple enabling VoIP applications for the iPhone that use Wi-Fi connectivity (including connectivity at more than 20,000 Wi-Fi hotspots operated by AT&T that may be used by iPhone customers for no additional charge) rather than AT&T’s 2G or 3G wireless data services….we plan to take a fresh look at possibly authorizing VoIP capabilities on the iPhone for use on AT&T’s 3G network.

That’s not nearly as bad as the $10.3 million loss the company posted in the fourth quarter of 2008. Still, it’s not pretty. Especially given some of the company’s other metrics. Vonage (VG) lost 6,000 net subscriber lines during the quarter at a time when you’d expect the souring economy to be driving cost-conscious consumers into its waiting arms. Churn rose to 3.1 percent from 2.9 percent. And ultimately, the company ended the quarter with 2,583,861 subscribers, fewer than the 2,610,360 it had a year ago.

In its earnings release, Vonage said it has tapped TBWA\Chiat\Day, “a firm known for creating impactful messaging on highly regarded brands,” to do something similar for it. But is that even possible with a not-so-highly-regarded brand like Vonage?

“If you’re selling something or running a campaign–if you want to do that in the traditional world, then you would set up an 800 number, for example,” Stefan Oberg, the head of Skype’s business division, told ZDnet. “But 800 numbers are local to a country. So if you’re an international business, you have to set up 800 numbers in many countries. Now a company can have a button on their webpage or refer to Skype in an ad, and it’s like a virtual, global 800 number.”

As I said, a compelling proposition. But will enough companies take Skype up on it to really cause a significant increase in revenue? Particularly in a market as competitive as business communications? A market in which traditional phone companies are already peddling their own VOIP offerings?

Still, the Silicon Valley start-up, which officially opened its Web-based telephony platform to third party developers this morning, is generating a lot of buzz for its Flash/Flex-based telephones (see video below), and rightly so. The company has essentially built a software version of an operator-class telephone switch that connects Internet-based voice communication services with mobile and landline phones and other Web-based phone applications.

Using its Ribbit API, developers can write applications that support full telephone capabilities–voice mail, call-logging, text-to-speech transcription services, etc.–and because they’re Flash/Flex-based, they can be embedded into Web sites and integrated into Web-based services.

“What we have done is made voice an object that you embed into your workflow (or software),” said Ribbit CEO Ted Griggs. “We didn’t want to change how people did things, like communicate via Skype, and wanted to integrate the platform to work with any phone.”

Smart, eh? But how’s the company going to make money? Ribbit says it plans to charge for services like calls to traditional landlines, voice-mail transcriptions and billing. A reasonable plan, but as Ovum analyst Brett Azuma notes, an unproven one. “Unless there’s a foolproof way to get the products out there and make them successful,” Azuma told Wired. “I think the consumer applications are a little unclear for now. Being able to use text-to-speech transcription services and archive voice calls are many of the features that consumers have shown interest in over the years. However, whether or not they’re willing to pay for these features is going to be the big question.”

What is the company planning to do with all that money? Certainly, CEO Steve Jobs must have an idea or three. Fortune’s Jon Fortt speculates that the company might use a portion of those funds to buy its way into a new niche market with some small acquisitions. It may finally go through with that long-rumored TiVo acquistion.

Or it could do something else entirely. Like join the Federal Communications Commission’s upcoming auction of the 700 MHz wireless spectrum, either as a partner of Google or alone.

Apple can’t be too happy with AT&T right now. First the carrier turned its iPhone activations into a nightmarish PR disaster, then its CEO pre-announced a 3G version of the device that will make its precursor obsolete right before the annual holiday consumer binge.

Were Apple to bid in the auction and win, it would provide a nice solution to problems like these. A viable 700-MHz network and an OS X-friendly VOIP client is all the company would need not just to dump AT&T, but also compete with it. “Apple is the most anti-carrier company there is,” a former Apple executive recently told BusinessWeek. “They’re probably already frustrated with AT&T. If they put a few billion behind this, they could build a kick-ass network.”

These patents are invalid. We don’t owe them a dime.”
– Vonage lawyer Louis Jameson, Sept. 21

Vonage lawyer Louis Jameson was right. Vonage doesn’t owe Sprint Nextel a dime. It owes the company 800 million of them. Vonage settled its patent dispute with Sprint Nextel this morning for $80 million–$35 million for past use of Sprint’s patented technology and $40 million for future licensing, along with a $5 million prepayment.

Sprint, in turn, has agreed to license Vonage its VOIP portfolio, which includes more than 100 patents covering methods and components to connect voice calls between a traditional telephone network and an IP network. The settlement comes two weeks after a federal jury ruled that Vonage illegally used Sprint patents and awarded Sprint $69.5 million in damages.

In a statement today, Vonage General Counsel Sharon O’Leary said, “We believe this deal is good news for Vonage, our customers and our shareholders. It allows us to put this litigation behind us and continue to focus on our core business by removing the uncertainty of legal reviews and long-term court action.”

Presumably with the “uncertainty of legal reviews” removed, Vonage will have that much more time to focus on other uncertainties, like its financial viability. As of June 30, Vonage only had $344 million in cash. Of that, $66 million is restricted cash used as collateral for the Verizon bond. (Verizon also won its patent-infringement case against Vonage.) And it’s carrying $248.2 million in debt, with a put option that may mean it is due as soon as December 2008.

But why dwell on matters so bleak. There is, after all, good cause for celebration: Vonage stock soared as much as 80% this morning–if soaring is what you call reaching for $2 per share from a baseline of $1.56–on the news, giving the company its biggest single-day advance since going public last year.

The suit claims Vonage acquired the list during confidential acquisition talks between the two companies and has done SunRocket “irreparable harm and injury” by using it without permission. Vonage, for its part, acknowledges its confidentiality agreement with SunRocket but claims it legitimately purchased the list from a third-party broker. “We believe the suit lacks merit,” Vonage spokesman Charles Sahner told the Register. “We obtained a VOIP subscriber list through an established marketing list broker. We were assured that the data was legally obtained and could be used without violating anyone’s proprietary rights.”

If that’s truly the case, the deal worked out quite nicely for Vonage, which likes to fancy itself the belle of the VOIP ball despite its lousy financials and semi-dire legal straits. In the two days after SunRocket went belly-up, Vonage signed up 11,000 new subscribers–many of them old SunRocket customers. “We were the leader from the very beginning and we have that critical mass and the scale,” Sahner said back in July. “We helped put (SunRocket) out of business. They had a cheap product and they couldn’t compete.”