Google Voice shows need to update telecom laws

Is a Google Voice a phone service or a web service? The fact is, it's a question that can't be answered under our current definitions. But one thing is clear: Google Voice is the camel's nose under the policy tent that should - and perhaps will - cause a full-blown modernization of telecommuncications law. This is Google's point and it is well summed up by Business Week's Stephen Wildstrom.

In a sense, AT&T and Google are both victims of a ridiculous anachronism, as is the FCC, which must enforce it. They should all be working together to bring telecom regulation into the 21st century.

Don't expect to find AT&T and Google working together anytime soon. Google counsel Richard Whitt accused AT&T of hypocrisy (using the cheap "some people say" dodge) in its complaints that Google Voice restricts certain calls (ZD).

Some have pointed out that AT&T's complaints are hypocritical given that in the past they have asked the FCC for permission to block calls to these rural areas as well. Why? For exactly the same reasons we restrict them -- the exorbitant termination rates. Of course, AT&T charges customers for their services and also receives hundreds of millions of dollars in universal service subsidies.

AT&T apparently now wants web applications -- from Skype to Google Voice -- to be treated the same way as traditional phone services. Their approach is what a former FCC chairman has called "regulatory capitalism," the practice of using regulation to block or slow down innovation. And despite AT&T's lobbying efforts, this issue has nothing to do with network neutrality or rural America. This is about outdated carrier compensation rules that are fundamentally broken and in need of repair by the FCC.

But regardless of the need for new rules, the stakes are now high for Google in that (a) the FCC is taking AT&T's charges seriously enough to question Google; and (b) by Google's own reckoning, the termination charges are "exorbitant."

And this story might be bigger than it appears. It could be the wedge that opens Google up to serious, common-carrier-style regulation, notes Nielsen's Roger Entner in USA Today:

[G]oogle "just ran into a huge minefield." Google has long maintained that it isn't subject to government oversight, he notes. Should the FCC decide to impose rules on Google's emerging communications business, it "could no longer just basically do what it wants. Google would have to think a lot more about service offerings and how they impact consumers."