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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 FreeConference.com. 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a service (such as conference calls) at a cheaper rate, they make money on every inbound call -- but it's all due to outdated regulations that "protect" those telcos.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. identicon
    mertz, 25 Sep 2009 @ 5:44pm

    just finished reading this on tech crunch moments ago and getting caught up. i saw the post you put up a couple days ago on this net neutrality issue. one commenter pointed out that att failed by implying that they were a monopoly when they took on this issue the first time, and now at&t nor google are monopolies. i will admit that net neutrality is not my strongest point (neither is making sense it seems), but i've been following the talk about it on geist's website. i get that it's important to me because i use the net and it'll me as a user i guess more than the telecoms. what i find funny about this is that at&t supposedly wasn't involved in the whole google voice apple rejection/in limbo apps store review land, but at&t obviously fears google and whatever google has cooking up at mountain view..if they didn't why would they be responding so childishly and for it's part google is no better than at&t respnding to this in a complete unrealistic manner. they are being literal and parcing definitions, but they're both basically talking about the same thing because as many people have pointed out the line between phones and computers are blurring. apparently google really isn't trying to tiff at&t or other telcoms with it's google voice or it's future products because their intent is to do no evil (right?), but as another commenter brought up, is google going to be come a telecom company...are they going to buy towers and provide their own service? i think my favourite comment was someone saying google should shut up and buy at&T :D. (reading your post now).

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