AT&T, Google Spat Over Google Voice Blocked Calls Is Important... But Totally Misses The Point

from the distracting,-but-important dept

Fri, Sep 25th 2009 5:07pm — Mike Masnick

Well, well, well. It looks like AT&T's latest line of anti-Google attack is to accuse the company of being hypocritical on net neutrality by not living up to the same principles when it comes to its Google Voice product. The issue is that, apparently, Google Voice is now blocking calls to free conference services like FreeConference.com. This is identical to the problem I discussed a few weeks ago when I noticed that the MagicJack VoIP service blocked calls to those same services. Oddly, at the time, I got around the MagicJack block... by using Google Voice. So if it's now blocking those calls, I haven't yet seen it, but there are numerous complaints. And, just like I said at the time with MagicJack, I think that the FCC has been pretty clear in the past that this is not legal. If you're offering a phone service of this nature, you need to connect it with the phone calls customers are making.

So, I have to admit that I find Google's response to be disingenuous. It basically tries to shrug off the problem by saying Google doesn't have to follow such rules on connecting phone calls because it's a "web-based" offering. First, making such a claim just makes Google look like it's ducking the issue. Second, Google has done a dreadful job letting Google Voice users know that such calls are totally blocked by its service.

However (and this is important), the actual issue here is not net neutrality. The real issue is ridiculous regulatory setups in certain rural areas, that force unnaturally high connection fees on telcos to rural telcos, creating a massive arbitrage opportunity that the Free Conference call offerings making good (and profitable) use of in offering their services. Basically, every inbound call to these telcos requires massive per minute fees from the connecting service provider to the rural telco. It's so expensive that as long as the rural telco can offer a service (such as conference calls) at a cheaper rate, they make money on every inbound call -- but it's all due to outdated regulations that "protect" those telcos. Google mentions this in its response, but it should be the headline, not buried in the details: the issue with net neutrality is the telcos trying to double charge for the use of their network. The issue with these calls is a dumb regulatory setup that forces telephone service providers to pay insanely high rates to a small group of small telcos for any inbound calls.

So, yes, I agree that it's bad that Google (and MagicJack) blocks these calls -- and I believe it may in fact go against some previous statements by the FCC concerning phone services. But... it's not a net neutrality issue where they're doing so to squeeze extra money out of customers by holding part of the access for ransom. Instead, it's the result of bad and outdated local state regulations concerning connection fees that really need to be overturned.

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Filed Under: arbitrage, conference calls, connection charges, google voice, net neutrality, phone service
Companies: at&t, google

40 Comments

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Anonymous Coward, 25 Sep 2009 @ 5:16pm

"Instead, it's the result of bad and outdated local state regulations concerning connection fees that really need to be overturned."

If the laws are to the benefit of rich and powerful corporations the only way to overturn them is via a mass protest. Otherwise, they're here to say.
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Anonymous Coward, 25 Sep 2009 @ 5:16pm

Re:
err, here to stay.
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Mike Masnick (profile), 25 Sep 2009 @ 5:22pm

Re:
If the laws are to the benefit of rich and powerful corporations the only way to overturn them is via a mass protest. Otherwise, they're here to say

Well, they're really designed to benefit the rural telcos... at the expense of bigger telcos.
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Me, 25 Sep 2009 @ 5:38pm

However
Let's not overlook the fact that the reason google voice exists is because THEY collect high access fees from the telcos on inbound calls to them. They are playing a dirty arbitrage game here.

The problem is all the regulation, yes, but that is the reason we don't want the FCC to get involved writing rules we don't need which will devolve into some absurd situation down the road like we see here.
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mertz, 25 Sep 2009 @ 5:44pm

just finished reading this on tech crunch moments ago and getting caught up. i saw the post you put up a couple days ago on this net neutrality issue. one commenter pointed out that att failed by implying that they were a monopoly when they took on this issue the first time, and now at&t nor google are monopolies. i will admit that net neutrality is not my strongest point (neither is making sense it seems), but i've been following the talk about it on geist's website. i get that it's important to me because i use the net and it'll me as a user i guess more than the telecoms. what i find funny about this is that at&t supposedly wasn't involved in the whole google voice apple rejection/in limbo apps store review land, but at&t obviously fears google and whatever google has cooking up at mountain view..if they didn't why would they be responding so childishly and for it's part google is no better than at&t respnding to this in a complete unrealistic manner. they are being literal and parcing definitions, but they're both basically talking about the same thing because as many people have pointed out the line between phones and computers are blurring. apparently google really isn't trying to tiff at&t or other telcoms with it's google voice or it's future products because their intent is to do no evil (right?), but as another commenter brought up, is google going to be come a telecom company...are they going to buy towers and provide their own service? i think my favourite comment was someone saying google should shut up and buy at&T :D. (reading your post now).
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Anonymous Coward, 25 Sep 2009 @ 5:52pm

It seems to me that If Google were to completely explain the way the "scam" works and offered to connect you to FreeConference.com for what it actually cost they would be blameless AND educational.
And if you really needed to you could still use the service.
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Anonymous Coward, 25 Sep 2009 @ 5:53pm

Re: However
Do you have some proof of that me?
I'd like to see it.
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Ima Fish (profile), 25 Sep 2009 @ 5:59pm

"If you're offering a phone service of this nature, you need to connect it with the phone calls customers are making."

I've went over this before. What law says VoIP services have to connect every call? Telcos must connect such calls because their bound by common-carrier laws. Such laws do not apply to VoIP services such as Google's. If you know of such a law, please provide it.

What's really sad is that you've argued the opposite position previously. Remember back when you agreed that VoIP services were not analogous to Telcos? It was only last May.
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Anonymous Coward, 25 Sep 2009 @ 6:07pm

Re: Re: However
Uhm... I think the track records of federal agencies (ie: the FDA, USPTO, FCC, etc...) to act as tyrant agencies that make stupid laws is enough evidence for me.
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mertz, 25 Sep 2009 @ 6:11pm

Re:
>the issue with net neutrality is the telcos trying to double charge for the use of their network.

oh i get it now. someone made the same comment on the tc section about how it seems more plausible that at&t is trying to set itself up so that it benefits the most from this google voice service.
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mertz, 25 Sep 2009 @ 6:17pm

Re:
> Telcos must connect such calls because their bound by common-carrier laws.

this is what google said in their blog. i thought they were being picky about what they chose to recognize but this is actually written down and is law? but i also thought people were saying google voice isn't voip? do you know where i can go to read about this so i can be more informed? the difference between google and at&t, aside from google providing a software for people to use on their phones, is that at&t owns it's towers and provides call lines, while google is still just a tech company...i think i'm confusing things. hmm.
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Anonymous Coward, 25 Sep 2009 @ 6:31pm

Re: Re:
Either way I think telco phone service is generally overpriced.
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Cheese McBeese, 25 Sep 2009 @ 6:41pm

Re:
"I've went over this before."

I don't know if you had a good point to make or not because as soon as I read this sentence I stopped reading.
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Me, 25 Sep 2009 @ 6:58pm

Re: Re: However
Proof of what? That they are collecting access fees? The proof of that is that you can get your own phone number from them, which means that they are charging telcos terminating access fees when somebody calls that number.

In this situation, as in the question of whether net neutrality rules are needed now, AT&T is in the right, not google. Someday google will be hoisted on their own petard, and no one will be able to say they didn't have it coming.
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Cheese McBeese, 25 Sep 2009 @ 7:00pm

Re: Re:
"Well, they're really designed to benefit the rural telcos... at the expense of bigger telcos."

Mike, I'm sorry, it's not that simple. Are you a city boy?

The current regulations were designed to provide financial incentive to the rural telcos to provide service to expensive and hard to reach rural locations. The main benefactor of the regulation is the rural subscriber, not the telco. The rural telco incurs a lot of cost in order to be able to deliver those inbound calls. Not only that, the bigger telcos are generally happy with this regulation because in areas where there is no rural telco, the larger telcos are required to offer end-user service at tarriffed rates if they want to operate in that state. In some cases, this means that at&t and Verizon have to offer satellite service to otherwise unreachable customers at normal landline rates.

A shakeup is coming, but we aren't quite ready for it yet. As soon as the tier-1 operators can hook up WiMax or LTE networks at the end of their fiber pipes, the rural telcos are toast, IMHO. If I were a rural telco, I'd be spending a lot of time trying to figure out how to reinvent myself.
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Anonymous Coward, 25 Sep 2009 @ 7:01pm

Re: Re:
I don't know if you had a good point to make or not because as soon as I read this sentence I stopped reading.

Good for you. You must be from one of "dem der Southern Country States with the wal-marts in 'em."
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Mike Masnick (profile), 25 Sep 2009 @ 7:03pm

Re:
I've went over this before. What law says VoIP services have to connect every call? Telcos must connect such calls because their bound by common-carrier laws. Such laws do not apply to VoIP services such as Google's. If you know of such a law, please provide it.

It's true that the FCC has not been entirely clear on this, but in Kevin Martin's ruling in 2007, he made it sound like all phone service providers need to connect to all regular numbers.

What's really sad is that you've argued the opposite position previously. Remember back when you agreed that VoIP services were not analogous to Telcos? It was only last May.

That's quite different and you know it. That involved a question of whether or not states could tax VoIP providers as if they were telcos with taxes that were designed to pay for rights of way. That made no sense since VoIP providers didn't lay lines. But that's different than saying if you provide a phone service you can block numbers you don't like.
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Vision (profile), 25 Sep 2009 @ 8:34pm

some of you are smart. most of you are stupid. shut the hell up.
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Anonymous Coward, 25 Sep 2009 @ 10:20pm

Re:
now at&t nor google are monopolies

In most places in the US, only one company is legally allowed to install telephone lines on utility right-of-ways. In the areas where that is AT&T, they do indeed have a monopoly.
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Anonymous Coward, 25 Sep 2009 @ 10:24pm

Re:
I've went over this before. What law says VoIP services have to connect every call?

The law that says it is fraudulent and illegal to advertise one thing and deliver another.
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Anonymous Coward, 25 Sep 2009 @ 10:26pm

Re:
some of you are smart. most of you are stupid. shut the hell up.

If you want to have a conversation with the voices in your head, please do so in private.
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Ura Fish, 25 Sep 2009 @ 10:39pm

Business Models
What if Google were to partner with, say, Pizza Hut and start blocking calls to other pizza shops? I suppose Ima Fish would see nothing wrong with that either.
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Anonymous Coward, 26 Sep 2009 @ 7:25am

Re: Re: Re:
Hello. You must be fairly new here. This isn't a new topic of discussion, which is why Mike didn't bother going into such details. Try http://techdirt.com/articles/20071005/013707.shtml for more.
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diabolic (profile), 26 Sep 2009 @ 8:50am

Re: Re:
Mike, by your logic Google is a telco. If thats true then there is a solution to your problem. You can get one of the rural telcos as your service provider, as a Competitive Local Exchange Carrier (CLEC). Since Google Voice has the local monopoly in your area it must allow the rural telco access to its wires that go to your house. So your provider is still Google Voice but you pay the rural telco for the service, so its the rural telco that now decides what numbers you can call. Problem solved - except that will never happen, Google is not an ILEC. From the link to the Washington Post article (going back to 2007), http://www.techdirt.com/articles/20070302/073711.shtml, the FCC said that the rural telcos, which are ILECs, must connect calls that VoIP providers send to the ILECs. The ruling, http://hraunfoss.fcc.gov/edocs_public/attachmatch/DA-07-709A1.pdf, says nothing of ILECs or VoIP providers connecting calls from their customers, the ruling is specific to ILECs accepting calls from VoIP providers.

As much as you do not like it, Google Voice is not a telco and is not regulated like one. Google Voice can block your calls as it sees fit. Google Voice at the moment is not a public service, it is an invite only private service. Honestly, I'm surprised by your stance on this issue. I thought you were for breaking down barriers to innovation. Requiring Google Voice to play by a bunch of broken telco rules that are based on a local monopolies, where Google has to pay to play, is a big barrier to innovation, a big barrier to offering you an innovative free service. I agree that the Free Conference Call situation/scam is not right but we should not force Google to be a part of it, we should fix that separately.
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Mike Masnick (profile), 26 Sep 2009 @ 9:59am

Re: Re: Re:
Mike, by your logic Google is a telco.

No. As I said above to Ima Fish, it's offering a telco service, but is not itself a telco. I agree that it should not be regulated like a telco for tax purposes, which are supposed to pay for the public rights of way. That makes no sense, since Google isn't running lines that require a right of way.

But, it IS offering a telephone service, and in doing so, it should connect all calls. Otherwise it's misleading and deceptive.

As much as you do not like it, Google Voice is not a telco and is not regulated like one.

As I said, I agree. But that doesn't mean it should OFFER to let people make phone calls and then block those same calls. That's deceptive advertising.

Requiring Google Voice to play by a bunch of broken telco rules that are based on a local monopolies, where Google has to pay to play, is a big barrier to innovation, a big barrier to offering you an innovative free service. I agree that the Free Conference Call situation/scam is not right but we should not force Google to be a part of it, we should fix that separately.

Well, we agree about the real problem. But in the meantime that doesn't make it right that Google is deceptively blocking calls without explanation that people reasonably expect to be able to call.
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mertz, 26 Sep 2009 @ 10:39am

Re: Re: Re: Re:
i hope this is responding to my comment. i usually just skip these posts because it doesn't really impact me directly and it mostly deals with the US. I am only interested in this story from the pov that AT&T had something to do directly, or indirectly with Apple showcasing it's proprietory nature and cancelling this google voice app.
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mertz, 26 Sep 2009 @ 10:41am

Re: Re:
yeah i find it odd that the commenter on tc said that at&t is not longer a monopoly...in the states, or worldwide. i don't follow at&t especially after i got screwed over by them. i'm mostly interested in this from a google-apple perspective.
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mertz, 26 Sep 2009 @ 10:42am

Re: Re: Re: Re: Re:
n/m my last comment. couldn't see who this was in repsonse to.
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diabolic (profile), 26 Sep 2009 @ 12:27pm

Re: Re: Re: Re:
In a 2005 ruling on E911 the FCC says "The IP-enabled services marketplace is the latest new frontier of our nation’s communications landscape, and the Commission is committed to allowing IP-enabled services to evolve without undue regulation."

The FCC correctly put VoIP services in a category called IP Enabled Services and PSTN services in a category called Common Carrier Services. The FCC is giving VoIP service providers an environment free from heavy regulation in order to foster new and innovative technologies/services.

I agree that it sucks that Google and MagicJack would just silently start blocking calls - I never said they were right. It does seems like the situation did help spur those companies to provide their own competitive services - a situation that fosters innovation as more players are solving the same problem (think crowd sourcing, just a smaller crowd). The main point is that the market is open. MagicJack did not work so you tried Google, Google is not working out and I'm sure there are other VoIP providers to choose from. You have options, its not about who owns the wires/monopoly anymore. Customers will gravitate toward the service provider that has want they want.

This is an area ripe for innovation, not regulation. For example, GoToMeeting has a relationship with FreeConferenceCall.com. GoToMeeting offers both VoIP and PSTN connections into voice conferences - FreeConferenceCall.com accepts both VoIP and PSTN connections into the same conference. FreeConferenceCall.com does not seem to offer the VoIP capability to the public but perhaps via special relationships. Google and MagicJack could make similar arrangements and cut the Common Carriers out of the picture completely, thus eliminating the rural access fees. I suspect its cheaper for Google and MagicJack to create their own competitive services.

Maybe what you really want is not for Google to be treated like a Common Carrier but for IP Enabled Service providers to be required to interconnect calls with each other.
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1DandyTroll, 26 Sep 2009 @ 6:38pm

One can never fault what ever reply is given back to AT&T, however stupid. AT&T already've tried the same bs thrice and thrice again. AT&T has a lot of hats to down, after all.

Kinda ironic how communist AT&T finds monopoly to be bad for business these days.
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diabolic (profile), 27 Sep 2009 @ 9:15am

Re: Re: Re: Re:
I have to say Mike, I find your stance on this topic frustrating. I can't seem to get over it. Your position seems to be opposite of the things you talk about on this site all the time. Sounds like you feel *entitled* to call any phone number you want through a free service provided by Google that is not a traditional telephone service or even a modern replacement for a telephone service. In fact you feel that Google should be *required* by law to connect your calls even if Google has to absorb the high costs associated with connecting those calls. At the same time you talk about how you do not agree with the reasons for the high costs of those calls. Then you finish up with "Google is deceptively blocking calls without explanation".

Did you read the Terms of Service that came with your *free* use of Google Voice?

Do you expect Google to connect calls (free to you) to other numbers that have high costs associated with them like 900 and 976 numbers?

How do expect new business models and innovation to occur in an environment that forces high costs on new players in the market, players that are not given monopoly access to a market while their competition enjoys such monopoly access?

Sometimes your posts really do sound like "People just want stuff for free."
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Mike Masnick (profile), 28 Sep 2009 @ 12:07am

Re: Re: Re: Re: Re:
I have to say Mike, I find your stance on this topic frustrating. I can't seem to get over it. Your position seems to be opposite of the things you talk about on this site all the time. Sounds like you feel *entitled* to call any phone number you want through a free service provided by Google that is not a traditional telephone service or even a modern replacement for a telephone service.

If they pitch it as connecting to POTS, then yes, it should connect to POTS. That's it. Nothing frustrating about it.

Did you read the Terms of Service that came with your *free* use of Google Voice?

Yes, I did.

Do you expect Google to connect calls (free to you) to other numbers that have high costs associated with them like 900 and 976 numbers?

Those are clearly different types of numbers, where it's clear from their prefix. It's known that those are fee-based numbers. That's quite different.

How do expect new business models and innovation to occur in an environment that forces high costs on new players in the market, players that are not given monopoly access to a market while their competition enjoys such monopoly access?

I expect plenty of new business models to come about. We see them all the time. But if you make a claim to provide a service, and then you don't provide it... I have a problem with that. You can't claim to call all regular numbers, and then not do it.
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Fred McTaker (profile), 28 Sep 2009 @ 1:22am

Re: Re: Re: Re:
Thanks to the AC for the link to the older article on this subject! It's amazing to me that this was a prominent problem with telco regulation, appearing in WSJ articles 2 years ago in October 2007, yet it still hasn't been properly addressed to this day.

On benefiting rural customers: that argument is a load of bunk. The rural telcos have large one-time costs initially in infrastructure roll-out, but if they did it right then that cost is paid for early, within the first year or two. Then they continue raking in the cash well over their maintenance costs, after the build-out was already paid for, by bilking both the rural consumer via monopoly subscription rates, and the remote outbound telcos via termination fees. These fees are called monopoly rents, and these telcos are exhibiting standard rent-seeking behavior, and such fees are never good for anyone except the monopoly owner.

Google deserves no blame here. If anything, the FCC should react to AT&T's complaints by fixing the telco monopoly problem, including the big one created by AT&T. Telcos in general pay for the infrastructure once, but get paid for it several times over, way over and above any actual maintenance costs. Lets just make them government contractors instead: hire them to build the Internet "Highway" and "Surface Streets" to our homes. Once those high-bandwidth "roads" are built, they only get paid for basic route maintenance, and nothing more. No more vertical integration, where they get to charge monopoly toll fees for audio or video, or data streams of any form. Anyone should be able to use their delivery services on these bandwidth "roads". These "roads" shouldn't belong to the builders after they are already built and paid for -- they belong to the public. Abolish the telco monopoly tolls.
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Fred McTaker (profile), 28 Sep 2009 @ 1:30am

Re:
There are plenty of free conference call services, including those that are handled entirely in VoIP space, and thus don't involve any telco charges whatsoever. Google should just direct you to one of those. Google Voice already supports Gizmo VoIP accounts as a call-in option, and Gizmo VoIP already has a similar free conference call service.

AT&T is just whining because they want to keep their telco monopoly cake and don't want to share, neither with the rural telcos nor Google.
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Anonymous Coward, 28 Sep 2009 @ 7:28am

Re: Re: Re: Re: Re: Re:
If you read the Google Voice Terms of Service then I'm sure you read this part:

"4.2 Google is constantly innovating in order to provide the best possible experience for its users. You acknowledge and agree that the form and nature of the Services which Google provides may change from time to time without prior notice to you.

4.3 As part of this continuing innovation, you acknowledge and agree that Google may stop (permanently or temporarily) providing the Services (or any features within the Services) to you or to users generally at Google’s sole discretion, without prior notice to you. You may stop using the Services at any time. You do not need to specifically inform Google when you stop using the Services."

With MagicJack, where presumably you paid for service, I can see how your complaint makes sense. But with Google's free service you get what you get - Google is under no obligation to you. You might not like the terms, you might not like their actions, so move on. You have choices.
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Anonymous Coward, 28 Sep 2009 @ 7:56am

"Lets just make them government contractors instead: hire them to build the Internet "Highway" and "Surface Streets" to our homes."

So who would hire them as government contractors? The government? They can't pay for the roads, bridges and levies that need to be repaired or built, you think the government can pay to have fiber put in?
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Fred McTaker (profile), 1 Oct 2009 @ 3:30am

Re:
"you think the government can pay to have fiber put in?"

Yes, I do. What most people don't realize, especially Anonymous Cowards, is that taxes don't just go to government. When government grants any kind of monopoly to a corporation, that is a tax that you pay directly to that corporation, but they get to call it a "fee" instead of a tax. Governments often give them part of their tax money as well, in the form of a "subsidy." They both try to hide that fact that our tax dollars are going to private profits, by claiming these monopolies are a "service", as if they were optional. Let's take a survey of how many people think "services" like water, electricity, roads, insurance, health, and phones are "optional". If there are above 20% of people who think these things are seriously optional, and still maintain full-time employment, then I'll stop calling them taxes.

I would rather have these taxes go to elected representatives and public servants, not local monopoly CEOs. I would rather have my ISP taxes spent in ways I can vote on. Right now we have what I call "taxation without representation." Does that ring a bell?
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pacman, 3 Oct 2009 @ 10:02pm

Well said fred mctaker
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joe, 2 Nov 2009 @ 6:14am

English Language, and those destroying it
"And, just like I said at the time with MagicJack,"

should be "And, as like I said at the time with MagicJack,"
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joe, 2 Nov 2009 @ 6:20am

gosh! another one! but this must stop, and you need an editor...

"Well, well, well. It looks like AT&T's latest line of anti-Google attack..."

try instead

"Well, well, well. It looks as though AT&T's latest line of anti-Google attack..."

Credibility starts with readability
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