VoIP and POTS: Regulatory Classifications or Magical Incantations?
It's that time of the year again--when nothing is as it appears. I know this because my kids started to nag me about Halloween costumes. You know, what they should be (and what I have to buy). The first catalogues started coming in the mail last week, and the Internet has been humming with on-line searches since then. But, witches, goblins, and haunted houses aren't the only artificial distortions decorating the autumn landscape this year.
Last Friday, the 25th, AT&T sent a letter to the FCC complaining that Google asserts the right to offer a service that closely resembles regular phone service, but without terminating calls to high-cost providers, like "traffic pumpers." To be able to selectively avoid completing calls to carriers that charge excessively high termination rates confers a big cost advantage over ones competitors. Therefore, AT&T argues, on the one hand, that Google should be treated like every other provider of "phone" service and be required to terminate calls to all parties. Google, for its part, claims that Google Voice is an application and not subject to "common carrier" obligations. According to Google's service description, the "common carrier" transport portion of its service (if there is one) is provided by a competitive carrier called Bandwidth.Com.
Alternatively, AT&T explains that even if the "Google Voice" service is an "application" or an "information service" it violates the "fourth principle" of the FCC's existing Broadband Policy Statement principles, which apply to all providers of "telecommunications." para. 4. [Note: the existing Broadband Policy Statement principles apply not just to "telecommunications services" which would only cover "telecommunications" offered for a fee to the public, thus Google's point that its service is "free" does not mean it cannot violate a Broadband Freedom principle.] The fourth Broadband Policy Principle provides that, "consumers are entitled to competition among network providers, application and service providers, and content providers." AT&T also argues that, if Google Voice is an application, Google's service would violate the Commission's proposed "fifth" principle of "non-discrimination" which would ensure consumers that a provider could not block access to another provider.
So, what's the big deal? Where is the magic? Where are the "illusions"? Isn't this just a business-as-usual, Hatfield-McCoy, AT&T-sniping-at-Google letter? Well, I'm not sure. As I've disclosed before, I do some consulting for AT&T, but I wasn't involved in this letter, and I'm not privy to AT&T's reasons for sending it, but I would caution against taking the letter too literally--in the AT&T v. Google sense. I'm just an educated observer, but I actually think another blog, Telecom Ramblings, got the right answer first in this post from September 27th.
The "magic" and the "slight of hand" is actually a "slight of words." You see, Google's description of its service was no accident. When announcing his intention to open a proceeding to expand the Commission's net neutrality policies, Chairman Genachowski referred to "phone calls delivered over data networks" as VoIP "applications." See p. 3. An "application" is not a "telecommunications service" or a "common carrier" service. Yet, the consumer does not know, or care, about the difference . . . and the difference (in technologies used to deliver the same functional service to consumers) is antithetical to the whole point of the idea of "technology-neutral" net neutrality rules.
Yet, here we are. If you know the right "incantations", then Google's defense of why its service should be regulated differently than AT&T's, or the terminating LEC's, makes perfect sense. Using the right words to describe your service leads ineluctably to a specific regulatory regime. To use a scary, Halloween-type analogy, practically any service provider can choose a technology to deliver the service it wants--under the rules that suit it (and AT&T can do the same thing as Google)--simply by making sure that it sprinkles the right magical powder around its service, in the form of reciting the correct regulatory incantation to describe the service.
But who's doing the regulating? It should be apparent by now: the regulatory voodoo "witch doctors." If that make you uncomfortable, the real truth is even scarier--almost all of these "witch doctors" are also lawyers! Aaaahhh!
So, was AT&T trying to cast a spell on Google last Friday? Maybe, but "trying" is the operative word--if that's even what was happening. But, if I had to bet, I'd say AT&T was using the situation, along with its best witch doctors, to try to cast a spell on the FCC to get it to do its job and clearly articulate the rules (including compensation and duty to interconnect) for all providers of functionally-equivalent voice services--regardless of the technology used to deliver the service, or the historical regulatory framework applied to that technology.
The bottom line is that providers should not be able to self-regulate their services (and those of others) simply by using the right regulatory incantations. Rather, the regulator most regulate, and the Commission must do so by articulating rules that are clear and easy to understand for consumers and providers, alike. Moreover, the Commission's regulations should be technology neutral, and not confer any relative legal advantage on any provider of services consumers perceive to be substitutes. It is Halloween season, but having the inmates running the asylum is a plot that's been done too many times before, and it's too scary to be part of our regulatory story.
It is really funny that ATT is saying in their letter,
By blocking these calls Google is able to reduce its access expenses. Other providers, including those with which Google Voice competes, are banned from blocking because in the June 2007, the Wireline Competition Bureau emphatically declared that all carriers are prohibited from pursuing “self help actions such as call blocking.” The Bureau expressed concern that call blocking “may degrade the reliability of the nation’s telecommunications network.” Google Voice thus has claimed for itself a significant advantage over the providers offering competing service.
This proves that when ATT blocked calls and caused the Wireline Competition Bureau to make that declaration that ATT was blocking calls to cut cost and get a competitive advantage over the competition. Pricing to the competition and not to their cost while selling access to other companies networks.
Now Google is doing the same thing and ATT is asking the group that made them stop to ask Google to stop. Here is the funny thing! ATT connects those calls but refuses to pay. So all ATT is asking that Google have to both connect and pay Bandwidth.com to complete the calls and put the ADVANTAGE back in ATT’s favor because they don’t have to pay for those same connections.