Monday, November 02, 2009

Google Voice flap shows gravy train for rural telcos

We have reported on the Google Voice controversy twice (here and here), but now National Public Radio has one of the better explanations of the issue we've seen. Google still blocks calls to some rural phone companies with its new Voice service, Howard Berkes reports, but since the announcement of a Federal Communications Commission investigation the company has limited the list to 100 rural phone companies associated with the controversial but legal practice of "traffic pumping."

Rural phone companies, designated as Competitive Local Exchange Carriers, are permitted "to charge inflated fees for the incoming long distance calls that reach their customers," Berkes writes. CLECs earn their designation by providing competition to dominant phone carriers, and are allowed to charge more since they have higher per-customer costs. Some charge as much as 20 times the normal rate for such calls, Berkes reports, and many engage in "traffic pumping" by partnering with companies providing chat rooms and free teleconference services.

For instance, Great Lakes Communication has access to 800 local numbers assigned to it in Spencer, Iowa, population 11,000, but none of those numbers are actually assigned to local businesses or residences. By "traffic pumping" GLC generates 2.5 million calls a month with those numbers. Google, which designed its Voice application as a free service, decided the cost of completing those calls was too much. While the two sides continue to argue if Google should have to obey regulations of traditional phone companies, which have to complete such calls, Google maintains you can still use your cell phone or land line to call those exchanges.

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