Google Voice blocks calls to some rural areas, citing high telecom fees; FCC investigating

Amid a "net neutrality" debate between large telecommunications firms and Internet companies, which we reported here, one telecom has turned the tables on a net-neutrality supporter. Acting on a request by AT&T, the Federal Communications Commission sent a letter to Google Inc. Friday demanding information about its Google Voice service. AT&T alleged Google was using the service to unlawfully block calls to rural areas.

Web-based Google Voice allows users to sign up for a telephone number that routes incoming calls to cell phones or land lines and place calls at low rates. In a blog post, Google's Washington telecom and media counsel, admitted that Voice does block calls to some rural areas that charge exorbitant termination fees and "partner with adult sex chat lines and `free' conference calling centers to drive high volumes of traffic."

Google maintains that regulations designed to keep phone services from blocking calls to rural areas that charge higher termination fees do not apply to Voice and other Web-based applications like Skype, because they aren't meant to replace traditional phone services, just augment them.

Some industry insiders saw AT&T's complaint as an attempt to turn negative publicity against Google in wake of the impending Oct. 22 FCC vote on net neutrality, Joelle Tessler of Business Week reports. Whitt writes: "Despite AT&T's lobbying efforts, this issue has nothing to do with network neutrality or rural America." (Read more)

"Both sides seem to have pretty legitimate gripes," Seth Weintraub of Computer World writes for PC World. "The overreaching problem in the situation is the high cost of termination charges levied by rural operators." (Read more)

The North Dakota Public Service Commission has decided to look into Google Voice after hearing Minnesota was doing the same, Tracy Frank of The Forum in Fargo reports. “It’s incumbent upon us to figure out how this is going to affect North Dakota,” Commissioner Brian Kalk told Frank. “Rural areas are the most underserved right now and if there is a place where we need more opportunities for telecommunication, it is rural areas.” (Read more)

But who is at fault, and what's the deal with do rural telephone companies? Business Week columnist Stephen Wildstrom places the blame at the foot of out-of-date FCC regulations. "In a sense, AT&T and Google are both victims of a ridiculous anachronism, as is the FCC, which must enforce it," Wildstrom writes. All local phone companies charge termination fees for calls sent to their customers, fees that phone services like AT&T are required to pay, but rural companies charge much higher rates.

Wildstrom says these traditional regulations lost effectiveness after some business-saving entrepreneurs decided there was money to be made in the rural phone business. "They set up free or low-cost conferencing services and sex lines, routed the calls through their rural phone companies, and made money by collecting termination fees instead of charging their customers," he writes, adding Google is almost certainly correct in its legal stance that Voice is not subject to the same FCC regulations as phone services. To fix the problem, he advocates Google, AT&T and the FCC working together to "bring telecom regulation into the 21st century." (Read more)