AT&T's recent letter to the FCC about Google Voice was obviously disingenuous. It tried to link network neutrality, a key Google crusade, with Google Voice's blocking of certain calls. In reality, there was little connection except the politics involved: The real goal of the communication was to paint AT&T as on the side of network openness, and Google as on the opposite side. But the letter did inadvertently bring to light a potentially major weakness in the Google Voice model: the fact that the free service has to pay to have its users' calls delivered to their destinations on the PSTN (public switched telephone network).
The AT&T letter specifically noted that Google Voice doesn't deliver calls to certain numbers and area codes, and argued that it "would appear to be" prohibited from doing such blocking by the rules the agency's Wireline Competition Bureau applies to phone companies. The letter then argued that if Google Voice is an Internet application rather than a phone company, it is violating the agency's network neutrality rulings by blocking access to other providers – even though the other providers in question are traditional phone companies, and not the providers of Internet services that network neutrality provisions aim to protect. In short, AT&T's letter, complete with scholarly citations and footnotes, was about scoring political points with a blizzard of authoritative-sounding but ultimately disconnected arguments.
Still, it brought the first public attention to Google's need to pay other phone companies for delivering, or "terminating," calls. Such payments represent a significant factor for Google Voice, because they are a built-in cost. Most VoIP providers cover such costs by charging $20 or more per month for unlimited domestic calling. But as long as Google Voice remains free, it will have to find another way to pay for termination. And that may be one reason the service has remained in beta for so long: It hasn't yet figured out how to do so.
I had tacitly assumed that GV has to pay termination fees. How could it not? Additionally, if Magic Jack can be used as a reference model, then the yearly cost of such termination can be bounded by $20, indeed it should be much less because, that amount includes MJ's profit margin. I would think SMS charges may dwarf voice termination charges.
Posted by: Aswath | 09/27/2009 at 07:11 AM