AT&T to Google: So You Wanna Be a Phone Company?

A few months, ago when covering the launch of Google Voice, I wrote a post entitled: Meet Google, Your Phone Company. That headline sums up why Google’s voice service has drawn the ire of everyone from AT&T (s T) to Apple (s AAPL.) Today, Ma Bell asked the Federal Communications Commission to investigate Google Voice on the grounds that it was preventing consumers from calling certain numbers, which AT&T argues violates the principles of net neutrality. The letter is worthy of a pay-per-view event. It also reveals how the Google Voice service works.

AT&T alleges:

Numerous press reports indicate that Google is systematically blocking telephone calls from consumers that use Google Voice to call telephone numbers in certain rural communities. By blocking these calls, Google is able to reduce its access expenses. Other providers, including those with which Google Voice competes, are banned from call blocking because in June 2007, the Wireline Competition Bureau emphatically declared that all carriers are prohibited from pursuing “self help actions such as call blocking.” The Bureau expressed concern that call blocking “may degrade the reliability of the nation’s telecommunications network.” Google Voice thus has claimed for itself a significant advantage over providers offering competing services.

Google, of course, doesn’t agree with such a portrayal of Google Voice and argues that since it’s not a traditional phone service, it shouldn’t be treated as such. The company instead refers to it as an Internet application.

AT&T obviously disagrees with Google’s description, writing in its letter to the FCC:

But in reality, “Google Voice” appears to be nothing more than a creatively packaged assortment of services that are already quite familiar to the Commission. Among other things, Google Voice includes a calling platform that offers unified communications capabilities and a domestic/international audio bridging telecommunications service that, with the assistance of a local exchange carrier known as, provides the IP-in-the-middle connection for calls between traditional landline and/or wireless telephones. As such, Google Voice would appear to be subject to the same call blocking prohibition applicable to providers of other telecommunications services.6 For its part, is undeniably a common carrier subject to the Commission’s call blocking prohibition; it markets itself as a “National CLEC” and has certified to the Commission that it operates as a local exchange carrier.

Now if Google’s description is true, then pretty much every service that uses VoIP in the middle of the network should be referred to as an Internet application. My view is pretty close to that of an average consumer. As I wrote in my Meet Google, Your Phone Company post:

The mobile app for Google Voice uses the regular PSTN connection to place a call to Google Voice, which then places a call out to the person you need to reach. Since these calls (and SMS messages) originate from your Google Voice, they display your Google Voice number for the recipients. The service needs a data connection but it isn’t necessary to have a Wi-Fi connection to place and receive calls. The wireless number you buy from the cell phone company becomes less relevant. The Google Voice app essentially reduces the cell phone carrier to a dumb pipe.

In its letter to the FCC, AT&T wrote that the commission “cannot, through inaction or otherwise, give Google a special privilege to play by its own rules while the rest of the industry, including those who compete with Google, must instead adhere to (FCC) regulations.” (see related post from GigaOM Pro, sub required: How Google Voice Could Change Communication)

AT&T claims that this is a breach of network neutrality rules, but organizations such as Free Press are dismissing the carrier’s claims as political stunts that have “absolutely nothing to do with” such rules, insisting that the “spats between two dueling giants cannot be allowed to stand in the way of Internet freedom.”

This is the second time Ma Bell and Google have tussled over Google Voice. In the last round, Apple was also involved and FCC had to jump in to play referee. The results of that round are still pending — the Google Voice app for the iPhone is still missing in action.