Bloomberg Anywhere Remote Login Bloomberg Terminal Demo Request


Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.


Financial Products

Enterprise Products


Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000


Industry Products

Media Services

Follow Us

Bloomberg Customers

Google vs. AT&T: Gaming the System

Posted by: Stephen Wildstrom on October 15, 2009

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’s 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’s 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 “smart 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.

Reader Comments


October 15, 2009 2:21 PM

I don't think we can trust AT&T any further than we can throw them.

I still vividly recall 10 years ago when an AT&T rep said on an NPR show that their customers didn't want number portability. And, who cooperated with the Bush administration warrant-less wiretapping?

John Smith

October 15, 2009 3:12 PM

AT&T ruined the country since times. Now its taking sides as if it is speaking for the millions of Americans. It indeed is NOT. AT&T, try managing your own nasty network.It sucks and you suck big time.


October 15, 2009 3:32 PM

AT&T knows but disregards that net neutrality is not actually related to telephone regulations. They're throwing punches at Google to get regulations changed so smaller providers can't game the system the way they do now. They're upset that Google isn't getting played the same way.

Play by the Rules

October 15, 2009 4:29 PM

Play by the rules. If Google wants to offer Virtual Voice connectivity through their system then play by the rules of the Teleco industry. Google offers a phone number to call that is then routed to other phone numbers. To the general public it's just another phone number they can use and keep indefinitely. Does not matter that Google does not charge or charges very little for it, it's still a phone service. Then play by the same rules that all the other telephone operators play by.


October 16, 2009 10:54 AM

This is a well written article and it would be great if your dream of 21st century regulation would come true. I think the point of this argument is not how much any one "trusts" AT&T or Google, the fact is Google wants to promote Net Neutrality regulation to keep providers from blocking access to web sites while at the same time they are managing a voice service which is blocking access to certain blocks of telephone numbers. AT&T is pointing out that Google can't have their cake and eat it too...

The Untold Truth

October 16, 2009 11:29 AM

The bottom line is Google needs to follow the current FCC regulations. The same regulations that AT&T must follow.

If It Walks like a Duck

October 16, 2009 11:31 AM

I'm sorry, did I miss something? If it walks like a duck, and quacks like's a duck! Let's level the playing field, and rewrite these antiquated laws. BTW, so you can't trust AT&T? And we can TRUST Google??? who captures every click you every make and monitors YOUR every movement on their site. Please!

John Smith

October 16, 2009 12:07 PM

To:Play by the Rules
Ask AT&T not to collect money.
Ask AT&T not to charge excessively for long distance
Ask AT&T to be innovative...and so on...
If Google is offering for free, why do companies like AT&T care? becoz, they are loosing money and they cant see that Google like company taking it for free. Would you go to restaurant that charges excessively and offers average food or would you go to another place that offers good food for lesser price. Start using common sense before you say something Mr Rule guy..

La Marque

October 16, 2009 12:46 PM

Google wants the telcos to play by their rules of net-neutrality; but don't want to follow the established voice call rules. Google is doing 'evil'.

Matthew James

October 16, 2009 1:11 PM

I don't see how Google gets a free ride on this. If google wants to grab a share of the voice calling marketplace they should have to play by the same set of rules the telcos do. Google can't demand net neutrality when it suits their purpose, and then cry the rules don't apply when it doesn't suit them. I think people's overall dislike of att, and their network is clouding people's perception to think Google is the scrappy underdog "indie"-net company that could, and ATT is "evil". Google IS the 800 pound gorilla.

John Smith

October 20, 2009 4:20 PM

Post a comment



Bloomberg Businessweek writers Peter Burrows, Cliff Edwards, Olga Kharif, Aaron Ricadela, and Douglas MacMillan, dig behind the headlines to analyze what’s really happening throughout the world of technology. 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.



BW Mall - Sponsored Links

Buy a link now!