AT&T does not allow an application to be installed on its android phones from outside the market. AT&T was asked why and this is what they said.
Q. Why can’t apps be installed from sources outside of the Android Market?
A. Android Market, managed by Google, is open to all developers. There is no approval process for applications, they are all accepted by default and Google has stated that they place apps in the Android Market within 24 hours of their submission. AT&T selected Android Market as the exclusive source for applications because it forces developers to be accountable for the apps they submit. If the Android community has issues with an app, the app can be flagged and removed. This minimizes the risk of malicious apps harming customers and provides more protection to the customer’s private data stored on the phone.
This may be a good enough answer for some. I however believe that this is a bad answer. Android is an open source OS. Users should be able to decide what they want to install. You have to enable the phone in the settings to install these apps. New users might not want to do this. Beta programs, programs that developers want people to test before they are released, are installed outside of the market. If you have an AT&T phone, there will be no beta testing for you.
AT&T has control issues. The first android phone they carried, the Back Flip, was stripped of Google. They used Yahoo as the default search engine. Really! On an Android phone, developed by Google, Yahoo is the default search engine? It doesn’t make sense. Maybe one day they will realize what they are doing?