Google voice, an Internet call-forwarding system restricts outgoing calls to some phone numbers, including adult chat lines and conference-call centers, which charge higher access fees to carriers. Blocking such calls reduces its access expenses. But it creates long barrier for AT&T to compete with Google on price.

Google’s Response

Although Google agreed with AT&T that the current carrier compensation system is badly flawed, as the FCC has suspended the rural companies’ rates and proposed rules to permanently ban traffic pumping. But the agenda is still open on the issue and the single best answer is for the FCC to take the necessary steps to fix it.

But they defended of themselves. Richard Whitt, Washington Telecom and Media Counsel posted on Google blog that Google Voice do restrict some calls keeping in mind provision of providing free or low cost access. Google differentiates its Google voice from traditional phone services on various accounts thus exempting themselves from rules that bind phone carriers.

GV is not subjected to common carrier laws as it is a free web-based software application.
For using GV a landline or wireless line is required which makes it a supporter of traditional phone services rather than being a replacement to it.
Google Voice is currently invitation-only, serving a limited number of users.

AT&T used its net neutrality card accusing Google of violating “net neutrality” principles, which are designed to ensure consumers can use any legal Internet services they want.

AT&T’s Senior Vice President-Federal Regulatory Robert Quinn commented on the issue “While Google argues for others to be bound by net neutrality rules, it argues against itself being bound by common carriage, which the Financial Times aptly recognized as an ‘intellectual contradiction.’ Such a contradiction highlights the fallacy of any approach to Internet regulation that focuses myopically on network providers, but not application, service, and content providers.”
Furthermore discussing on the net neutrality Google blog post proceeds as follows
“AT&T is trying to make this about Google’s support for an open Internet, but the comparison just doesn’t fly. The FCC’s open Internet principles apply only to the behavior of broadband carriers — not the creators of Web-based software applications. Even though the FCC does not have jurisdiction over how software applications function, AT&T apparently wants to use the regulatory process to undermine Web-based competition and innovation.”

The FCC’s net-neutrality guidelines require companies to allow consumers to use the Internet as they please. They also say that “consumers are entitled to competition among network providers, application and service providers and content providers.”

Although both the companies have placed their opinions on the issue it is yet to be seen that will FCC gives a clear chit to Google or goes with AT&T???