Is Google Voice a Web or a Phone Service?

Is Google Voice a traditional phone service or a Web application that in no way competes with LECs? That’s the question that lies at the heart of the Federal Communications Commission probe of the service, and the subject of much opining since the FCC launched its probe on Friday. Google was quick to weigh in on the matter.

The FCC wrote a letter to Google Inc. after a bipartisan group of lawmakers requested the probe, and after AT&T Inc. lodged a complaint claiming Google Voice has an unfair advantage over traditional companies by being able to block calls to some rural exchanges that charge high, margin-killing termination rates. Phone companies in contrast are banned from all call-blocking – a policy AT&T itself has protested many times. This is an issue, AT&T argued, because Google Voice should be seen as a competitive threat to regular calling services, and subject to the same regulations.

AT&T Senior Vice President Robert Quinn said: “Google casually dismisses the bureau’s order, claiming that Google Voice ‘isn’t a traditional phone service and shouldn’t be regulated like other common carriers. 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.”

That’s a claim Google has now refuted resoundingly, answering the FCC with a statement claiming that Google Voice is not a phone service. Rather, it enhances existing communications by offering a single portal through which to access those landlines, mobiles, IM, texts and other modes. Google’s Richard Whitt, senior counsel, also noted that AT&T and other LECs charge for their services and are the beneficiaries of Universal Service Fund subsidiaries. In contrast, Google Voice is a free application that cannot afford to remain so if it must pay “exorbitant” termination rates for calls to certain exchanges.

Those exchanges, Whitt argued, have higher-than-usual termination rates because they have profitable relationships with adult chat lines and free conference calling services. The result is a large amount of expensive traffic. That reality, Google said, arises from outdated carrier compensation rules that should be fixed.

Depending on the FCC findings, the case could result in any number of free Web services, like Skype, for instance, being regulated as traditional landline or mobile services. That’s a turn of events that Whitt warned would end up slowing innovation significantly. AT&T in turn looks at it as leveling the playing field. Free IP-based services have been steadily cannibalizing a segment of its bread-and-butter voice services, helped along by a lack of competitive regulation.

In its letter, the FCC asked Google to answer some questions by Oct. 28, including how Google thinks the service should be regulated, why there’s an invitation-only policy for the trial service, and how Google decides what calls to block and how it blocks them.

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