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Google vs. AT&T: Gaming the System

The squabble between AT&T and Google over Google Voice and call blocking is descending into a familiar Old Economy pattern: Competitors trying to game the regulatory system for their own advantage. Let?? hope the Federal Communications Commission, on whose doorstep this mess has landed, can keep its focus on the broader issues.

In its latest salvo, AT&T has fired off another letter (PDF) to the FCC?? Wireline Bureau pointing out that by blocking calls to certain rural telephone exchanges, Google is stopping Google Voice users not only from calling free teleconferencing services and sex chats, but many other destinations including a Benedictine convent and a tribal community college.

Most of the missive is devoted to AT&T's necessarily legalistic and technical case that the FCC has jurisdiction to regulate Google Voice as a telecommunications service. But the nub of the argument is that the network neutrality demanded by Google means that Internet players such as Google should be bound by the same regulatory regime as the old-line telcos:

If the Commission is going to be a ??mart cop on the beat preserving a free and open Internet,?then shouldn’t its “beat” necessarily cover the entire Internet neighborhood, including Google? Indeed, if the Commission cannot stop Google from blocking disfavored telephone calls as Google contends, then how could the Commission ever stop Google from also blocking disfavored websites from appearing in the results of its search engine; or prohibit Google from blocking access to applications that compete with its own email, text messaging, cloud computing and other services; or otherwise prevent Google from abusing the gatekeeper control it wields over the Internet? For that matter, how could the Commission stop any other Internet-based information service provider from engaging in similar behavior that compromises the openness of the Internet ecosystem?

This outcome would, of course, give AT&T a big home court advantage. With the possible exception of Verizon Communications, no one knows its way through the thickets of telecom regulation like AT&T. I don't want to take sides in this increasingly nasty fight, but I think that expanding the reach of existing telecommunications services regulations is exactly the wrong way to go. Rather we should be freeing everyone from an archaic set of rules that serves only to distort markets and enabled "free" services that are free only in the sense that providers can use regulatory arbitrage to force someone else to pay for them.

The problem is that there is no easy way to reach that outcome. The FCC cannot unilaterally end or even reduce termination charges by rural carriers, or any of hundreds of other absurdities embedded in telecom regulation. The structure was created by Congress and federal courts have kept the commission on a short leash when it has tried to expand its authority beyond the letter of the law.

But we would all be better off if instead of throwing spitballs at each other, Google and AT&T, along with other players from both sides of the telecom-Internet divide, got together in a campaign to bring the regulatory structure into the 21st century. I know it's not going to happen, but we can dream.

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