AT&T Lashes Out Against Google Voice. Again.

The ongoing he-said, she-said exchange between Google Inc. and AT&T Inc. over the Google Voice application blocking calls to some rural exchanges added a chapter Wednesday night. AT&T has fired off a statement that the issue is about net neutrality. Period.

Google Voice, it maintains, is gaining an unfair competitive advantage by being able to block calls to some rural exchanges that charge high, margin-killing termination rates. Meanwhile, it and other traditional carriers are prevented by the FCC from doing just that. The incumbent’s statement reads that the situation “demonstrates exactly why any open Internet principles must also apply evenhandedly to providers of Internet applications, content and services.”

Google’s Richard Whitt, senior counsel, earlier this week pointed out that AT&T and other LECs charge for their services and are the beneficiaries of Universal Service Fund subsidiaries. But in Google’s case, the call restriction is necessary in order to keep its service free, because some exchanges for so-called “traffic-pumping” numbers (sex chat lines, free conferencing) charge “exorbitant” termination rates that it cannot afford to pay.

Pshaw, said AT&T on Wednesday. Also, after doing some testing, AT&T said that it found Google was blocking not just traffic-pumping numbers, but also an “ambulance service, church, bank, law firm, automobile dealer, day spa, orchard, health clinic, tax preparation service, community center, eye doctor, tribal community college, school, residential consumers, a convent of Benedictine nuns, and the campaign office of a member of the U.S. House of Representatives.”

The controversy comes as the FCC gets set to unveil a network neutrality proposal next week. FCC Chairman Julius Genachowski has made the issue of “network gatekeepers” a top priority Meanwhile, Google Voice, which right now is in a trial, invitation-only phase, is ramping up its numbers of users by allowing those who have been invited to use it to add friends and family as users.

The battle of statements has been ongoing since the FCC launched its probe into Google Voice last Friday. The probe was prompted by a bipartisan group of lawmakers that requested it, and by AT&T’s complaint claiming Google Voice has an unfair advantage over traditional companies.

Google has maintained that it shouldn’t be regulated in the same manner as LECs, because it not providing a telephony service, but rather enhances existing communications. It offers a single portal through which to access landlines, mobiles, IM, texts and other modes; using Google Voice still requires a subscriber have a landline or wireless line from a traditional carrier, even though it does offer partial toll bypass on a per-minute basis as well as free texting.

AT&T Senior Vice President Robert Quinn has refuted that, saying: “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.”

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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