Last month AT&T complained to the FCC about our policy of restricting outbound Google Voice calls to phone numbers in a small number of "rural" areas, just as other Internet applications do.
The reason we restrict calls to certain local phone carriers' numbers is simple. Not only do they charge exorbitant termination rates for calls, but they also partner with adult sex chat lines and "free" conference calling centers to drive high volumes of traffic. This practice has been called "access stimulation" or "traffic pumping" (clearly by someone with a sense of humor). Google Voice is a free application and we want to keep it that way for all our users -- which we could not afford to do if we paid these ludicrously high charges.
Today the FCC responded to AT&T's complaint by asking us for more information about Google Voice. Google Voice is a free web application, one intended to supplement and enhance existing phone lines, not replace them. The goal of Google Voice is to provide a useful, unified communications tool (including for, among others, soldiers and the homeless). Some have observed that Google Voice is "something a real phone company should have offered years ago."
Some have pointed out that AT&T's complaints are hypocritical given that in the past they have asked the FCC for permission to block calls to these rural areas as well. Why? For exactly the same reasons we restrict them -- the exorbitant termination rates. Of course, AT&T charges customers for their services and also receives hundreds of millions of dollars in universal service subsidies.
AT&T apparently now wants web applications -- from Skype to Google Voice -- to be treated the same way as traditional phone services. Their approach is what a former FCC chairman has called "regulatory capitalism," the practice of using regulation to block or slow down innovation. And 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 This is about outdated carrier compensation rules that are fundamentally broken and in need of repair by the FCC.