As Google, AT&T feud simmers, a partnership waits in the wings

And even as the two tech titans escalate their sometimes bizarre war of words, a major partnership between the companies is also brewing.

Dallas-based AT&T and Google are squabbling over Google Voice, a program that lets users make free domestic calls on a land line or cell phone.

But soon the feuding companies will be business buddies, as AT&T prepares to offer wireless phones built on Google's Android operating system.

AT&T is ticked that Google is blocking Google Voice calls to rural lines with expensive connection fees, since the Federal Communications Commission requires traditional carriers like AT&T to connect those calls. That means AT&T pays to make those connections and Google doesn't.

AT&T first complained about the blocked rural connections in a letter to the FCC.

A few days later, Google responded with a blog post acknowledging that it blocked some numbers but arguing that the blocked lines mostly involved "adult sex chat lines and 'free' conference-calling centers."

Furthermore, Google alleged, AT&T was being hypocritical because it, too, previously sought an exemption from being required to connect to those expensive lines.

Earlier this week, AT&T upped the ante in another FCC letter, alleging that, in addition to phone sex lines, the lines blocked by Google Voice also include "an ambulance service, church, bank, law firm, automobile dealer, day spa, orchard, health clinic, tax preparation service, community center, eye doctor, tribal community college, school, residential consumers, a convent of Benedictine nuns, and the campaign office of a member of the U.S. House of Representatives."

At its heart, the debate is over the concept of "network neutrality."

Should the Internet (and, now, phone) companies that built those networks and provide access to end users be allowed to block certain Web sites or phone numbers? Or should phone and Internet providers be required to be neutral and let users browse or call as they choose?

AT&T and Google stake out different positions, and each blasts the other for hypocrisy.

Google says it's in favor of net neutrality laws, while at the same time blocking Google Voice access to some numbers.

AT&T says net neutrality laws are unnecessary and potentially harmful, but it also wants the FCC to force Google Voice to be neutral.

The FCC is looking into the entire debate. The situation is further complicated by the fact that these two erstwhile foes will soon be friends.

Google's Android software for wireless phones is enjoying a surge in popularity, and AT&T will soon release its first Android-based phones.

Dell Inc. is widely expected to release its own smart phone next year built around Android, and that phone is believed to be headed to AT&T's network.

What's more, Google Voice is one of the most popular applications for existing Android phones.

Telecom industry analyst Jeff Kagan understands how the alternating friend/foe relationship between AT&T and Google might seem odd to outside observers.

"This is the crazy world we live in today," he said. "Companies who compete can also partner. At the same time, they can be friendly and competitors. Hard to figure, but this is all true."
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