October 9, 2009 / 1:34 AM / in 10 years

UPDATE 3-U.S. lawmakers seek FCC probe into Google Voice

* Lawmakers concerned over Google’s ability to block calls

* Say blocking feature is unfair to rural constituents

* FCC to analyze special access fees (Recasts; Adds FCC comments on special access competition)

By John Poirier

WASHINGTON, Oct 8 (Reuters) - U.S. lawmakers urged regulators to investigate Google Inc’s (GOOG.O) ability to block expensive calls to rural areas to slash expenses, marking the latest spat between the Internet giant and AT&T Inc (T.N).

Google’s Voice service is at the heart of a dispute between the world’s largest online search company and Apple Inc (AAPL.O) over why Google’s voice application, which could offer low-cost calls for users, is not available on the iPhone.

Google said Apple rejected it. But Apple said it was still studying it because the application alters the iPhone’s telephone functionality and user interface.

AT&T Inc, the exclusive U.S. carrier for the iPhone, has complained that Google has the ability to block calls, which U.S. phone carriers are prohibited from doing.

Dallas-based AT&T says that Google would have an unfair advantage if Google’s Voice service is not subject to the rules applied to phone operators.

On Wednesday, a group of 20 Republicans and Democrats in the U.S. House of Representatives, mostly representing rural areas, wrote a letter to the Federal Communications Commission to investigate the Internet company’s ability to block calls.

“We are formally requesting an investigation by the FCC into the nature and function of Google Inc’s voice service,” they wrote in the letter to FCC Chairman Julius Genachowski.

An FCC spokeswoman on Thursday declined to comment. The FCC has already sought information from Google, Apple and AT&T, the biggest U.S. telephone carrier.

Separately, Genachowski said the FCC would soon open an inquiry to examine fees some phone companies like Sprint Nextel Corp (S.N) and T-Mobile pay their bigger rivals AT&T and Verizon Communications Inc (VZ.N) to connect cellphone calls.

In a letter to Senator Daniel Inouye, a Hawaii Democrat, Genachowski said the agency in the next 30 days will seek public comment on ways to create an “appropriate analytical framework” to assess competition in the special access market.

In its fight with Google, AT&T has said the Google Voice service was blocking costly calls to phone numbers in certain rural areas in order to cut down on expenses.

An AT&T spokesperson said on Thursday that once policymakers collect the data from an investigation, they can determine if Google is enjoying a “double-standard.”

For years telephone companies have complained to the FCC that third-party companies route adult chat and free conference calls through rural exchanges in order to generate fees. The FCC prohibited carriers from blocking such calls.

A Google spokesperson on Thursday criticized AT&T for falling behind in payments for calls made through rural exchanges, as alleged in a recent letter to the FCC by an attorney representing some rural carriers.

Google has said its Voice service is not a traditional phone call because it originates from a Web software tool and should not be regulated like telephone companies.

In the Wednesday letter, lawmakers including House Energy Commerce Committee members Steve Buyer, an Indiana Republican and Charlie Melancon, a Louisiana Democrat, said they find Google’s position “ill conceived and unfair to our rural constituents.”

“A company should not be able to evade compliance with important principles of access and competition set forth by the FCC by simply self-declaring it is not subject to them without further investigation,” the lawmakers wrote. (Editing by Matthew Lewis, Bernard Orr)

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