AT&T calls Google a hypocrite on Net neutrality

AT&T is accusing Google of being a hypocrite when it comes to Net neutrality because it blocks certain phone calls on its Google Voice service.

The carrier has written a letter to the Federal Communications Commission claiming that Google has violated the agency's Net neutrality principles, which Google has long supported. Google defended its position in a blog post written by Richard Whitt, Google's main lobbyist and telecommunications lawyer in Washington, that basically said AT&T is comparing apples and oranges.

In a letter to the FCC filed on Friday, AT&T said Google is violating the fourth principle in the FCC's Internet Policy Statement, which calls for fair competition among providers of networks, applications, services, and content, as it blocks telephone calls made using Google Voice service to certain rural communities.

"By openly flaunting the call-blocking prohibition that applies to its competitors, Google is acting in a manner inconsistent with the spirit, if not the letter, of the FCC's fourth principle contained in its Internet Policy Statement," Robert Quinn, AT&T's senior vice president focusing on federal regulation, said in a statement. "Ironically, Google is also flouting the so-called 'fifth principle of nondiscrimination' for which Google has so fervently advocated."

In his blog post Friday afternoon, Google's Whitt fired back with an explanation. He acknowledged that Google is blocking calls to some rural regions. He said the company is doing that because certain local telephone carriers in rural areas charge AT&T and other long-distance companies especially high rates to connect calls to their networks.

Because they are small, rural phone companies are allowed to charge connection fees that are about 100 times higher than the rates that large local phone companies can charge. But in a practice known as traffic pumping, some of these rural carriers are sharing revenue with adult chat services, conference-calling centers, party lines, and others that are able to attract lots of incoming phone calls to their networks. The rural carriers charge the high rates and then split the revenue with these partners.

In 2008, AT&T and other long-distance phone companies complained to the FCC about the practice. Because most customers of AT&T, Verizon Communications, and Qwest Communications pay a flat fee for unlimited local and long-distance calls, these carriers are often saddled with the added costs associated with connecting calls in these regions. AT&T said it had cost them as much as $250 million in 2007.

The FCC has suspended the rural companies' rates and proposed rules to permanently ban traffic pumping. But the docket is still open on the issue.

Whitt explained that Google Voice, which allows people to keep one phone number and redirects phone calls over the Internet, is also subject to these high rates. But he said the rules that apply to traditional phone companies do not apply to Google.

AT&T and other traditional phone companies are prohibited from blocking phone calls to any number because they must abide by common carrier laws, which require infrastructure providers, such as phone companies, to allow anyone who wants to use their networks access to that "public" infrastructure. The concept of a common carrier is supposed to ensure that the public retains access to fundamental services that use public rights of way, such as telephone service or roadways.

Google says these rules don't apply to Google Voice for several reasons. For one, Google Voice is a software application that rides on infrastructure built by other companies. It is a free service. And it is not intended to be a replacement for traditional telephone service. In fact, the service requires that users have a landline phone or a wireless phone.

AT&T says that if Google argues for Net neutrality, then it must be expected to abide by common carrier rules applied to telephone services.

"While Google argues for others to be bound by Net neutrality rules, it argues against itself being bound by common carriage," Quinn said in a statement. "Such a contradiction highlights the fallacy of any approach to Internet regulation that focuses myopically on network providers, but not application, service, and content providers."

Google's Whitt fired back that AT&T is trying to equate common carrier laws, which apply to infrastructure, to Net neutrality regulation, which is about keeping the Internet open to all applications and devices.

"AT&T is trying to make this about Google's support for an open Internet, but the comparison just doesn't fly," he said in his blog. "The FCC's open Internet principles apply only to the behavior of broadband carriers--not the creators of Web-based software applications. Even though the FCC does not have jurisdiction over how software applications function, AT&T apparently wants to use the regulatory process to undermine Web-based competition and innovation."

While this particular public spat between AT&T and Google may seem trivial and arcane to some, it is yet another example of a brewing battle between the two giant companies, which appear to be on a collision course.

Google has long been a supporter of an open Internet. It was Google's lobbying efforts that convinced the FCC to include an open network provision as a condition in the 700MHz auction. And the company strongly supports Chairman Julius Genachowski's ambitions to make the current FCC Net neutrality principles official regulation. Google has also been pushing the FCC to open up excess bandwidth between broadcast TV channels known as "white spaces" available to the public for free.

On all of these issues, AT&T and other phone companies have opposed Google.

It's clear that the phone companies are leery of Google's intentions. They see Google as a potential competitor someday. Some bloggers and industry watchers have speculated that this is the reason Google Voice was rejected as an application for the popular Apple iPhone, which runs exclusively in the United States on AT&T's wireless network.

In July, the FCC asked Apple and AT&T to explain why Google Voice had been rejected. Google told the FCC that it was Apple that rejected Google Voice for the iPhone App Store.

The FCC isn't commenting yet on AT&T's most recent letter, nor is it commenting on Google's blog response. But a representative of Chairman Genachowski acknowledged that the agency has seen AT&T's letter and is reviewing it. So stay tuned for more FCC filings and Google blog posts. This is surely not the last of it.