Sept. 25 (Bloomberg) -- AT&T Inc. told federal regulators that Google Inc.’s voice application improperly blocks telephone calls to some rural areas, and asked for an order to halt the practice.

The Federal Communications Commission should “order Google to play by the same rules as its competitors,” the largest U.S. telephone company said in a letter filed at the agency. The company cited “numerous press reports.” Google saves money by blocking calls, AT&T said.

“This may well be a first step toward a larger push by the major carriers to get Google Voice regulated,” said Paul Gallant, a Washington-based analyst with Concept Capital’s Washington Research Group, in an interview. Google Voice threatens carriers’ revenue because it offers cheaper texting and overseas calls, Gallant said.

Google Voice is a free, Web-based service “not subject to common carrier laws” that apply to telephone companies such as AT&T, said Richard Whitt, Google’s Washington telecommunications and media counsel, in a posting on the company’s blog. Google Voice does restrict some outbound calls to “high-priced destinations,” Whitt said in the posting.

The FCC is investigating why Apple Inc. didn’t accept the Google Voice application for the iPhone, which uses AT&T as its sole U.S. wireless carrier. Google Voice lets customers use one phone number to get calls on multiple devices and access voice mail. Apple says it’s still considering the application.

The agency asked about Google Voice as it prepared an inquiry into competition in the wireless industry, where AT&T and Verizon Wireless are the largest companies. Earlier the agency began investigating whether consumers are harmed by exclusive handset deals like the one tying the iPhone to AT&T.

‘Right to Restrict’

Google says in the terms of service for its Voice application that it “has the right to restrict calls or connections to any telephone numbers in its sole discretion.” It said such numbers could include “certain geographic locations.”

FCC rules don’t let telephone companies block calls, AT&T said in the letter, signed by Robert Quinn, a senior vice president.

“Do these rules apply?” Quinn said in an interview. “Or do they only apply one way? Could we block calls to Google Voice?”

The FCC said in 2007 that carriers can’t block calls to avoid high charges by the telephone companies where calls terminate. The agency said then its decision “affirms that all customers will continue to be able to connect with anyone on the network that they so choose.”

Replacing ‘Core’ Function

Google told the FCC in a letter that Apple rejected Google Voice because the application replaced a “core” function on the phone. AT&T said in a letter to the FCC that it had no role in the decision.

The FCC’s inquiry on the iPhone creates “meaningful risk that AT&T will feel compelled -- or perhaps will be directly compelled by the FCC -- to allow consumers to use free voice/texting applications on the iPhone,” Gallant said in an Aug. 24 note to investors.

Dallas-based AT&T dropped 7 cents to $26.96 in New York Stock Exchange trading at 4:15 p.m. Mountain View, California- based Google dropped $4.29 to $492.48 in Nasdaq Stock Market trading at 4:30 p.m.

To contact the reporter on this story: Todd Shields in Washington at tshields3@bloomberg.net

Last Updated: September 25, 2009 17:21 EDT