Why is FCC quiet on AT&T’s Call-Blocking?

Is AT&T’s decision to block some of its customers’ wireless calls a violation of the so-called net neutrality principles? If it is, the FCC isn’t saying so yet, at least not publicly. While both sides of the “free-calling” debate expect the commission to weigh in at some point, neither has filed a formal statement there, which may in some part have to do with the FCC’s silence on the matter so far.

Jonathan Canis, an attorney representing Iowa-based telcos as well as some Internet-calling concerns in their legal battles with the big carriers, says that “informal actions” by the FCC, even at the staffer level, may be enough to halt AT&T’s admitted practice of selectively blocking access to free-calling numbers. The free-calling services have offered “free” international calls, podcasts, and conference calls for the price of a long-distance call to Iowa.

“If the FCC just says “stop it,” that can be very effective,” said Canis in a phone interview. Such a warning, Canis said, might come from one of the FCC’s enforcement bureaus and not require direct approval of the commissioners, typically a more lengthy process.

Canis said he has spoken with staff members in the FCC’s enforcement bureaus about the incident; sources at the FCC said the commission is aware of the matter, but has not considered it formally yet. AT&T has claimed that its call-blocking is a legal move under its terms of service agreements with wireless customers.

AT&T spokesman Michael Balmoris said his company has not formally contacted the FCC regarding the matter, but did say that the telco giant’s ultimate goal is to curb any “gaming” of the regulatory process that allows rural providers to set higher-than-average connection fees. AT&T filed an additional lawsuit last week that charged two Iowa telcos with falsifying their paperwork in order to qualify for the higher interconnect rates.

Typically, rural telcos can apply for higher than average rates by saying it costs more for them to bring service to their small, widely dispersed customer base. AT&T’s contention is that some of the current schemes “exploit” the regulatory structure in order to gain profits, not to service rural communities.

“We can’t let out what all our legal strategies will be, but the ultimate goal is to address the serious regulatory problem,” Balmoris said in a phone interview. “At the end of the day, these [free-calling plans] harm consumers because they are a threat to our ability to offer all-you-can-eat [wireless] dialing plans.”