Technology

How Google Voice Is Growing


BusinessWeek's review of information handed over to regulators shows the call-management service has more than 1 million users. It may be expanded abroad

In response to questions by U.S. regulators, Google (GOOG) handed over information about the number of users for its Google Voice communication service and a list of the companies that route the calls sent via Google Voice. It also outlined plans that suggest it may expand the call-management service into foreign markets.

Google Voice, which provides people with a single phone number that can be used to reach them on their work, home, or cell phones, has 1.419 million users, according to the letter. Of those, 570,000 use it seven days a week, Google says. Google Voice began in 2005 as GrandCentral, a startup acquired by Google in 2007. Ring Central, a company founded in 1998 that provides similar call-management services to small businesses, says it has "tens of thousands" of customers.

The contrast underscores the rapidly increasing popularity of a service that, while available only on a limited basis, has put Google at odds with Apple (AAPL) and AT&T (T) and subjected the Web search company to questioning by the Federal Communications Commission. The top communications regulator asked for information about the service after AT&T complained that Google Voice was unfairly blocking calls to certain numbers in rural areas. Google sent its response on Oct. 28.

Formatting Error

Though the number of Google Voice customers was redacted in the version that was made public, BusinessWeek reviewed the information in the redacted sections. "We had intended to keep sensitive information regarding our partners and the number of Google Voice users confidential," Google said in a statement to BusinessWeek. "Unfortunately, the PDF submitted to the FCC was formatted improperly." The FCC says it has replaced the original letter posted to its Web site. "As soon as we discovered Google's error, we removed the document from the Web site and posted a new one," an FCC spokesman says.

In the public section, Google says it blocked certain connections to numbers in rural areas to reduce expenses. "In August 2009 Google Voice began the practice of restricting calls to certain high-cost destinations," Google says in the letter. Google argues that because it's not a traditional phone service provider, it shouldn't be subject to the regulations that require phone companies to connect calls to any number. Rural carriers are allowed to charge phone companies like AT&T high termination fees for calls destined for their areas.

Some businesses, including phone-sex and conference-calling services, take advantage of these higher fees by driving high call volumes to those numbers and collecting fees in the process, a practice known as "traffic pumping." Google says in the un-redacted portion of its letter that it had experienced an unusually high volume of calls to these numbers and blocked access by its user to some 100 numbers. AT&T cried foul over Google's blocked calls in a Sept. 25 letter to the FCC.

In another redacted section, Google hints at the prospect of going global with Google Voice. Google says it has signed contracts with a number of "international service providers for inputs to Google Voice." It goes on to say that "none of the contracted services have yet" been launched.

Network Cooperation

This is not the first time the FCC has looked into issues relating to Google Voice. In July, the FCC also looked into apparent foot-dragging by Apple in approving Google Voice for use on the iPhone. After months of review, Apple has yet to grant its approval, indicating that it may too closely resemble features already on the device. Critics say Apple may be unfairly blocking access and constraining competition.

In its correspondence with the FCC, Google also reveals several companies that help it provide Google Voice. The list includes fiber-optic network operators Level 3 Communications (LVLT) and Global Crossing (GLBC). It also mentions Broadvox Communications, Bandwidth.com, and Pac-West Telecomm. IBasis (IBAS) is responsible for connecting outbound international calls on Google Voice and Neustar (NSR) provides "porting and carrier lookup services," Google says in the letter. Syniverse Technologies (SVR) provides the free text-messaging service.

Hesseldahl is a reporter for BusinessWeek.com.

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