These days, the mere mention that Google is offering a new VOIP (voice over IP) service raises concerns about whether the company is creeping closer to becoming a carrier.
One industry analyst raised this question last month when Google unveiled Call Phones from Gmail.
With Call Phones from Gmail, users can type the name of their existing Gmail contacts or punch in a number for the first time, hit enter, and Gmail begins ringing the person’s landline or cell phone. Calls are free to the U.S. and Canada. International calls start at 2 cents a minute.
The feature, essentially the Google Voice phone management capability tucked into Gmail, moved Google into closer competition with Skype, the consumer VOIP market leader with some 560 million users.
Users quickly took to the service, with Gmail users making 1 million calls through the first 24 hours of the service’s availability in the U.S. and logging 10 million through the first week.
Yet IDC analyst Irene Berlinksy cautions that Call Phones from Gmail, Google Voice and other communications products such as Google Chat that have video calling could be make the company a target for carrier regulation.
“With Google VOIP’s ability to place calls to any number, it creeps ever closer to regulation and risks classification as a voice service, which would subject it to fees and rules. If this happens, Google VOIP’s ability to remain profitable falls,” Berlinsky says.
If this argument sounds familiar, it’s because it echoes claims made by AT&T when it blasted the search provider last September for blocking calls in rural areas.
Google and other companies do this to avoid getting gouged by “traffic pumping,” which allows small phone companies to charge phone companies exorbitant fees for voice connections.
Richard Whitt, Washington Telecom and Media Counsel for Google, argues that Google could not be classified as a carrier because Google Voice is free and is not intended as a replacement for traditional carriers, which charge for their services.
Google Would Never Let Itself Be Called Carrier
When asked whether Call Phones from Gmail changes anything, Whitt says, “Google Voice is a free, software-based Web-messaging platform, and is not intended to replace traditional phone service.”
Indeed, to sign up for a Google Voice account, users must subscribe to a traditional carrier’s landline or mobile phone service. The phone number is the endpoint; not a user’s Gmail account.
Google argues that these distinctions keep it out of the realm of the carriers, based on the Federal Communications Commission’s classification.
Most analysts agree with this sentiment and, while it is popular and convenient to go after Google as an Internet giant seeking to put too many fingers in too many pies, the FCC has seemed little bothered by the notion of Google as a carrier.
Under Federal Communications Commission Chairman Julius Genachowski, the FCC treats Google, which is ever railing about network neutrality, as very much the Internet company. The FCC is trying to get Verizon, Comcast and others to free up their pipes for application data.
But suppose the FCC did try to classify Google as a carrier based on its VOIP-based Web services?
A source familiar with Google’s plans said the company, seeking to protect its advertising fortress, would cut bait on a Web service if it came down to such regulation.
Gartner analyst Peggy Schoener agrees, telling eWEEK she doubts Google would get that far.
“My gut tells me it would be exceedingly difficult to try and regulate them at this stage of the game, and if they got that close, Google would walk away from the products before it would let it happen,” Schoener says. “They’re trying a lot of different things to see what works.”
Google’s assault on Skype notwithstanding, Google may be biting off more than it can chew with its VOIP moves, Berlinsky says. “It is rolling out numerous products in its quest to grow, and it remains to be seen if it can devote the attention and energy necessary to make VOIP succeed,” she says.