Is Google a Common Carrier?

The ongoing saga of whether Google Voice service (formerly Grandcentral) is a common carrier offering, and therefore subject to common carrier regulations, raises the question of just what constitutes a common carrier. But first, let's get the preliminaries out of the way. Is Google a common carrier? This is not a matter of opinion since it is a question subject to US federal and state law and regulation. The answer is most decidedly: NO.

Use of the present tense is vital since this could change. What it comes down to is whether Google Voice ought to be licensed and regulated as a telecommunications carrier, and if so, what aspects of the service are subject to federal and state jurisdiction. As an analogy, let's say you organize a large social event at which you serve liquor. You can of course do this, though it is possible you're breaking the law. Depending on local laws you may have passed the threshold for requiring a liquor license. If you don't have that license and you get caught, you are in trouble. Similarly, Google can offer its Google Voice service without a license, but if it's found that they've crossed the threshold used to determine whether this is a telecommunications service, they could come in for some difficulties. Google can argue otherwise, but they are not the ones to make the decision.

The regulators, both state (public utilities commissions) and federal (FCC), make the determination, and become involved when they choose to do so. Their determinations can be challenged in court after the fact, but let's put that future possibility aside. The FCC has a history of applying what might be called the duck test in this type of question: if it looks like a duck, walks like a duck and quacks like a duck ... it's a duck! This is how they eventually nabbed Vonage and their ilk, by deciding they were providing a telecommunications service, and they dispensed with the argument that, since under the hood there was VoIP involved for some of the technology, it was something different; telecommunications regulations in the US are mainly technology neutral, so such technology-oriented arguments often don't wash.

Once a company is found to be providing a telecommunications service, the regulator typically requires them to apply for the required licenses rather than putting them out of business. From there, the companies are required to follow all the rules for common carriers, including non-discriminatory access and inter-carrier termination. This is where freeconference.com comes in, since Google Voice and some other services block their subscribers from calling. AT&T and some other more conventional carriers tried the same trick and got slapped quite hard by the regulator, and with good justification: a carrier cannot avoid its legal obligations just because they do not like paying the high call termination fees charged by the conference service's local telephone company, which were approved by the regulator. While there is some moral force to the argument, it is a matter which must be dealt with separately from the determination of common carrier status.

Coming back to Google Voice, let's look at how it's constructed for some insight into how the current regulatory regime might be applied. Like Vonage, Google Voice relies on established common carriers -- their unnamed partners, though easy enough to determine -- to originate, carry and terminate subscribers calls. These carriers also have access to pools of telephone numbers for their partners' subscribers and process number porting requests; only licensed carriers can do these things. As an aside, this is another point of control and friction that can be used by incumbent carriers to impede the likes of Vonage and Google Voice: since they aren't obligated to honour interconnection and number porting requests from non-carriers, they have sometimes argued that the requests can be ignored since they have come from a non-carrier, despite the carrier partner's name on the paperwork.

The "shell" approach described above is somewhat akin to web mail, where an IMAP server has a web (HTML/Javascript) front-end as the user interface, and may also support some functions beyond that of the underlying server. The Google Voice smart phone app is the user interface shell that dials into the partner's network to set the Caller Id, and also uses the partner to redirect incoming calls to the desired user device (number). The carrier partner has a billing arrangement with Google, not the Google Voice user. Vonage is a slightly different since it provides the local "dial tone" over a SIP/VoIP connection to their own servers, then terminates all calls to their partner carrier (which has interconnection agreements with other carriers) and redirects incoming calls to Vonage for VoIP termination to the user.

When Google Voice blocks outgoing calls to select numbers to avoid high regulator-approved termination fees (that their carrier partner will pass on to them), this action is happening in the Google Voice shell functionality, not within their partner's network. The carrier cannot legally block these calls. Google wants to avoid having Google Voice being labelled as a telecommunications service for this reason, among others.

The question the regulators (both federal and state regulators for different aspects of the service) will have to answer is whether the Google Voice shell functionality meets the legal criteria for meeting the definition of a telecommunications service. As a comparison, VoIP providers like Vonage were judged to be above that threshold, and therefore must be licensed as common carriers. It's a fine but important distinction. It is also about fairness, power and money: regulators and the governments to which they are beholden want to establish that they have authority over all new telecommunications services, regardless of the technology or structure, to replace or even increase falling tax and USF (universal service fund) revenue from legacy services. That can motivate regulators to wear special glasses that make everything they look at appear to be ducks. The politics of this issue are unavoidable.

Google's technology-based arguments are likely to fall flat especially with the state regulators, which often don't understand the technology, or much care about it. I cannot see that there is a certain outcome, but if I had to bet I would place my money on Google losing this battle. That will have an impact on Google Voice's price (free) unless Google chooses to eat the cost or establish a premium service tier similar to what they've done for Google Apps.