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Can VoIP Providers Block Certain Calls?

Posted by: Olga Kharif on October 09, 2009

Yesterday, the Federal Communications Commission sent a letter to Google, asking the search giant to explain how its Google Voice service works, how many people are using it, and how much money it makes — information Google has not disclosed publicly. The inquiry was launched a couple of weeks after AT&T sent a letter to the FCC, alleging that Google may be “systematically blocking telephone calls…. in certain rural communities.”

The inquiry raises a big question: Do providers of over-the-Web calling services have to complete all calls? As of today, such companies — called, in industry lingo, VoIP providers — aren’t considered to be telcos, though they often act as such. Some of them, such as Skype, don’t charge for many services. And these Web-calling outfits aren’t required to complete all calls. Gigi B. Sohn, president and co-founder of Public Knowledge, writes that the FCC “inquiry should be more far-reaching than this relatively isolated case. We learned recently that another VoIP provider,, reserved the right to block calls to rural areas.”

There’s another aspect to this inquiry, of course: AT&T and its supporters are firing back at Google after being grilled by the FCC over delays in approving Google Voice mobile app. On Oct. 6, AT&T announced that it will abolish its old practices and allow Web-calling applications onto its wireless network. It’s unclear whether, under AT&T’s definition, Google Voice qualifies as such an app.

In either case, “today’s letter, although over a relatively minor aspect of a relatively minor service, raises an issue of far greater magnitude: the scope of the agency’s regulatory authority, and the continued erosion of lines dividing regulated and unregulated services as the Internet ecosystem continues to multiply and divide,” Stifel Nicolaus analyst Rebecca Arbogast wrote in an Oct. 9 note.

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Reader Comments


October 9, 2009 07:20 PM

Tell the FCC to go to hell... You do not need to provide that information to them.


October 9, 2009 07:58 PM

Thats all well and good except it seems your missing one big point Google voice is NOT VoIP. It uses (and therefore requires) and underlying phone service. Its more of an accessory to your existing phone service and is not/can not be a replacement. Big difference. However concerning actual VoIP services like Skype this does raise an interesting question.


October 10, 2009 01:16 AM

This continues a disturbing trend. Somehow this idea of being connected is going from a service you pay for to a blessed right of existence that should be provided for free. This Gigi Sohn of Public Knowledge may be right about rural area call blocks, but I also noticed that he didn't offer to pay for the infrastructure that would be required to make this happen. If you pay for a service, and you signed the contract showing the limitations, you have no, nada, zip reason to complain. If you get the service for free, then you should be thankful for what you get. If the FCC tries to force this issue and makes VOIP providers complete all calls, then it is going outside of its jurisdiction. If those people in rural areas want VOIP like access, then they can buy a sat phone or pay a provider who will support rural communities. Last I checked, that was the way business in the U.S. is conducted. Supply and demand. Not socialist "make everyone feel good" through the use of a government agency.


October 12, 2009 03:14 PM

We're in a gray area where we see a decline in plane ol telephone service use, and an increase in wireless and VoIP services. Traditional telephone companies must adapt quickly or loose their subscriber base. They must determine a point where abandoning Pots infrastructure and associated depreciation expense and migrate users to Internet type transport makes best business sense. They must, or they will loose a good segment of revenue.

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BusinessWeek writers Peter Burrows, Cliff Edwards, Olga Kharif, Aaron Ricadela, Douglas MacMillan, and Spencer Ante dig behind the headlines to analyze what’s really happening throughout the world of technology. One of the first mainstream media tech blogs, Tech Beat covers everything from tech bellwethers like Apple, Google, and Intel and emerging new leaders such as Facebook to new technologies, trends, and controversies.



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