AT&T, Google Spat Over Google Voice Blocked Calls Is Important... But Totally Misses The Point

from the distracting,-but-important dept

Well, well, well. It looks like AT&T's latest line of anti-Google attack is to accuse the company of being hypocritical on net neutrality by not living up to the same principles when it comes to its Google Voice product. The issue is that, apparently, Google Voice is now blocking calls to free conference services like This is identical to the problem I discussed a few weeks ago when I noticed that the MagicJack VoIP service blocked calls to those same services. Oddly, at the time, I got around the MagicJack block... by using Google Voice. So if it's now blocking those calls, I haven't yet seen it, but there are numerous complaints. And, just like I said at the time with MagicJack, I think that the FCC has been pretty clear in the past that this is not legal. If you're offering a phone service of this nature, you need to connect it with the phone calls customers are making.

So, I have to admit that I find Google's response to be disingenuous. It basically tries to shrug off the problem by saying Google doesn't have to follow such rules on connecting phone calls because it's a "web-based" offering. First, making such a claim just makes Google look like it's ducking the issue. Second, Google has done a dreadful job letting Google Voice users know that such calls are totally blocked by its service.

However (and this is important), the actual issue here is not net neutrality. The real issue is ridiculous regulatory setups in certain rural areas, that force unnaturally high connection fees on telcos to rural telcos, creating a massive arbitrage opportunity that the Free Conference call offerings making good (and profitable) use of in offering their services. Basically, every inbound call to these telcos requires massive per minute fees from the connecting service provider to the rural telco. It's so expensive that as long as the rural telco can offer a service (such as conference calls) at a cheaper rate, they make money on every inbound call -- but it's all due to outdated regulations that "protect" those telcos. Google mentions this in its response, but it should be the headline, not buried in the details: the issue with net neutrality is the telcos trying to double charge for the use of their network. The issue with these calls is a dumb regulatory setup that forces telephone service providers to pay insanely high rates to a small group of small telcos for any inbound calls.

So, yes, I agree that it's bad that Google (and MagicJack) blocks these calls -- and I believe it may in fact go against some previous statements by the FCC concerning phone services. But... it's not a net neutrality issue where they're doing so to squeeze extra money out of customers by holding part of the access for ransom. Instead, it's the result of bad and outdated local state regulations concerning connection fees that really need to be overturned.

Filed Under: arbitrage, conference calls, connection charges, google voice, net neutrality, phone service
Companies: at&t, google

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  1. icon
    diabolic (profile), 26 Sep 2009 @ 12:27pm

    Re: Re: Re: Re:

    In a 2005 ruling on E911 the FCC says "The IP-enabled services marketplace is the latest new frontier of our nation’s communications landscape, and the Commission is committed to allowing IP-enabled services to evolve without undue regulation."

    The FCC correctly put VoIP services in a category called IP Enabled Services and PSTN services in a category called Common Carrier Services. The FCC is giving VoIP service providers an environment free from heavy regulation in order to foster new and innovative technologies/services.

    I agree that it sucks that Google and MagicJack would just silently start blocking calls - I never said they were right. It does seems like the situation did help spur those companies to provide their own competitive services - a situation that fosters innovation as more players are solving the same problem (think crowd sourcing, just a smaller crowd). The main point is that the market is open. MagicJack did not work so you tried Google, Google is not working out and I'm sure there are other VoIP providers to choose from. You have options, its not about who owns the wires/monopoly anymore. Customers will gravitate toward the service provider that has want they want.

    This is an area ripe for innovation, not regulation. For example, GoToMeeting has a relationship with GoToMeeting offers both VoIP and PSTN connections into voice conferences - accepts both VoIP and PSTN connections into the same conference. does not seem to offer the VoIP capability to the public but perhaps via special relationships. Google and MagicJack could make similar arrangements and cut the Common Carriers out of the picture completely, thus eliminating the rural access fees. I suspect its cheaper for Google and MagicJack to create their own competitive services.

    Maybe what you really want is not for Google to be treated like a Common Carrier but for IP Enabled Service providers to be required to interconnect calls with each other.

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