In August, OhMyGov reported that the Federal Communications Commission was looking into a quarrel that had developed between AT&T and Google. The argument ensued because AT&T and Apple had decided not to allow Google Voice to run on the iPhone. Two months later, the brouhaha not only continues, but it has escalated.

The discussion has devolved into a shouting match between the two mega companies about “net neutrality” and who is adhering to the principles and who is not. AT&T recently pointed out to the FCC that by blocking calls in some rural areas Google Voice is not being neutral. This squeaky wheel complaint squeezed out some grease in the form of an FCC inquiry into Google Voice’s practices.

Google contends that its blocking of calls in some rural areas is done to benefit the consumer. “The reason we restrict calls to certain local phone carriers’ numbers is simple. Not only do they charge exorbitant termination rates for calls, but they also partner with adult sex chat lines and “free” conference calling centers to drive higher volumes of traffic.” According to Google they could not afford to pay these high rates and still keep the application free to all users.

On Google’s blog, the company also says it cannot be regulated like AT&T because it is not a telecommunications company. “Google Voice is a free web application, one intended to supplement and enhance existing phone lines, not replace them. The goal of Google Voice is to provide a useful, unified communications tool (including for, among others, soldiers and the homeless).”

Ma Bell could hardly take that lying down, especially with the nice touch of mentioning the soldiers and the homeless. In a letter last Wednesday to the FCC, AT&T went one better by invoking Benedictine nuns, schools and ambulance services that are being cruelly served by Google policy. What could be next for these two – puppies and kittens in peril?

Despite the somewhat maudlin examples brought forth by both giants, the argument between them is serious business for the FCC. Part of AT&T’s problem with the current situation is that while they are forced by the FCC to provide service in those rural areas, Google is exempt. AT&T believes that Google should be regulated in the same way, and said so in its letter:

“Google Voice is far more than a ‘software’ application. Rather, Google Voice uses telecommunications (supplied by its wholesale partner Bandwidth.com) to transmit voice calls between end users and it thus unquestionably constitutes ‘interstate and foreign communications by wire or radio’ under the Communications Act, placing it squarely in the Commissions jurisdiction.”

There is a certain amount of hypocrisy here on the part of AT&T since it’s spent most of its corporate life lobbying against the same FCC regulations that it is now touting as the only way to bring fairness to the system. But AT&T still has a point and that is why the FCC is looking into it. An Open Commission meeting is being held this Thursday, October 22, on preserving the open Internet with proposed new rules.

No matter what happens, it is certain that all parties involved know that the current antiquated system of regulating service needs an overhaul. Writing for Business Week Stephen Wildstrom points out that “rural termination fees are only one of dozens of regulatory provisions that may have had a purpose in the past but make no sense today.” Since Congress appears busy with other things right now it looks like the FCC is going to have to bring order and fairness to the system.