Responding to a complaint from AT&T Wireless, the Federal Communications Commission announced late last week that it would investigate Google's blocking of rural phone numbers with its Google Voice service. This investigation is largely unconnected to the FCC's previous probe of Apple's decision to block Google Voice from the iPhone, but AT&T's complaint came up in the context of that earlier investigation.
To recap, Apple earlier this year rejected Google's Google Voice iPhone application and then brazenly lied to the FCC about the incident, commenting instead that it had simply not yet accepted the app. Google noted in its own response to the FCC that Apple had indeed rejected the app, twice, and provided information about the two incidents in which that rejection was communicated.
Following the incident, there was widespread supposition that AT&T was behind the rejection—a supposition that, alarmingly, was repeated in high profile news publications such as The New York Times. All three companies—Apple, AT&T, and Google—told the FCC that AT&T had, in fact, played no role in Apple's rejection of the Google Voice app. Instead, it appears that Apple rejected Google Voice out of fears that its functionality would replace built-in iPhone features that Apple had created. Those fears betray either a curious misunderstanding of the service or an effort on Apple's part to hide its true motives from the FCC.
In the wake of this earlier investigation, AT&T took two interesting and seemingly mutually exclusive steps. First, it dropped a restriction that required Apple to prevent telephony applications like Skype from only working via Wi-Fi connections, and not via the iPhone's built-in 3G antenna, which, in the United States, connects calls and data over AT&T's wireless network. Second, it complained to the FCC that Google Voice blocks calls to certain rural areas that incur higher calling charges.
It's important to understand what is happening here. First, Google Voice is not a telephony application like Skype, and it does not "replace" the phone calling functionality in the iPhone. (As perhaps Skype might.) Instead, Google Voice is a back-end call routing service. It can forward incoming calls to any number of phone numbers—so you might be reached no matter where you are, for example—and provide a single external phone number to users, among other related services.
Google blocks certain rural phone numbers because the Google Voice service is free and those calls incur high costs. AT&T, like other traditional phone service providers, is required to connect such calls, though it of course passes along the expense to its customers. What AT&T is complaining about, is that Google Voice—a service that does not compete directly with traditional phone services—should be treated the same as services, like Skype, that do.
Not surprisingly, Google has called out AT&T on this hypocritical behavior. "AT&T apparently now wants web applications—from Skype to Google Voice—to be treated the same way as traditional phone services," Google counsel Richard Whitt said. "Their approach is what a former FCC chairman has called 'regulatory capitalism,' the practice of using regulation to block or slow down innovation. Despite AT&T's lobbying efforts, this issue has nothing to do with network neutrality or rural America. This is about outdated carrier compensation rules that are fundamentally broken and in need of repair by the FCC."
Google, famously, has championed net neutrality laws, laws that would break the stranglehold that wireless and broadband carriers like AT&T have long enjoyed. That AT&T has raised net neutrality concerns in its own complaint about Google Voice is, of course, somewhat disgusting. Tellingly, the groups that back net neutrality are backing Google on this one as well: Google Voice is an online service that works with traditional phone providers, and not a replacement. Thus, net neutrality laws do not apply.
As with the original investigation of Apple's rejection of the Google Voice app for the iPhone, this more recent investigation of Google Voice could have far more sweeping ramifications. In the case of the iPhone, it's possible that the FCC might move to break exclusive relationships between device makers (like Apple) and wireless carriers (like AT&T). And this newer investigation could hopefully jumpstart a discussion about updating the United States' outdated telephony rules and regulations.
Whatever happens, one thing is clear: The previously innocuous Google Voice service has raised the hackles of industry behemoths like Apple and AT&T that guard their markets quite jealously. The violence of their reactions and the entrance of the FCC into both incidents suggest that Google is, in fact, on to something that would actually benefit users.
Now we can't have that, can we?