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In asking the Federal Communications Commission to investigate Google's (News - Alert) refusal to terminate some calls placed to high-cost rural areas, AT&T is not simply sparring with Google over network neutrality, but rather pointing up a pricing anomaly that distorts behavior and reduces carrier profits.

 

The company is also suggesting current regulatory rules do not fairly treat competitors in the market, arguing for narrowing the regulatory differences between VoIP and other carriers and between access, application and content providers.

At issue, apparently, is Google's refusal to terminate some calls in high-cost rural areas. Many of you are familiar with free conference calling services that use area codes in rural areas. You might have wondered what the business model is. Simply, it costs carriers enough money to terminate calls in those rural areas that conferencing services can afford to give away the service and make their money on the termination fees. 

Google tariff specialists know that, and apparently want to avoid those costs by restricting termination to such numbers. 

Google has argued that it “isn’t a traditional phone service and shouldn’t be regulated like other common carriers.”

 

But Google Voice sits in a bit of a regulatory grey area. AT&T (News - Alert) points out that Google Voice, which many would argue is "not really VoIP," includes "a calling platform that offers unified communications capabilities and a domestic/international audio bridging telecommunications service that, with the assistance of a local exchange carrier known as Bandwidth.com, provides the IP-in-the-middle connection for calls between traditional landline and, or, wireless telephones."

Since a non-technical way of describing how the FCC (News - Alert) traditionally has ruled in such grey areas is "if it walks like a duck and squawks like a duck, it is a duck," one might make the determination that although Google Voice is an Internet application, Google Voice also is functionally a carrier, and its call termination services really are long distance communication services. 

 

If so, Google Voice would appear to be subject to the same call blocking prohibition applicable to providers of other telecommunications services. In other words, Google essentially want other competitors to be bound by network neutrality rules, while is escapes such rules, in this instance. 

 

More than a charge of mere hypocrisy is involved here, however. AT&T is arguing that growing regulation of Internet businesses focuses too heavily on access providers, and does not evenhandedly treat application or content providers. Again, AT&T is making a point that, if recognized, could be one more building block for an argument that regulation of the Internet's gatekeepers should be more in line with the reality of the "walks like a duck, talks like a duck" principle at a time when everyone recognizes the growing role played by applications untethered to a specific access provider, and competing directly with those access providers.

 

AT&T's petition serves several purposes, including support for an argument that all similarly-situated competitors be governed by the same rules. Any new rules governing the Internet should apply evenly, not just to network operators but also to providers of Internet applications, content and services, AT&T said.

 

But there are some other important ramifications as well, such as “traffic pumping” schemes that create artificial incentives for routing traffic to some exchanges. 

 

AT&T here is raising issues about the application of any new FCC rules on use of the Internet. But the arguments also raise issues about many other elements of regulation at a time when the lines between "common carrier" and "information services" are evaporating. Without saying so, AT&T essentially argues that current frameworks essentially are growing irrational. It would not be alone in that view. 

 

Google, on the other hand, can argue that is an information service, not a carrier. But there are grey areas where Google Voice is concerned. 

 

Such gray areas have been growing for some time as "access" and "applications" are capable of, and increasingly are, logically separated in the marketplace. But even if those issues are not addressed, at this moment, it is possible some other issues might be affected, if not resolved. Rural termination rates are one of those issues.