AT&T and Google are currently engaged in an ongoing dispute about the rejection of the Google Voice iPhone application. Last Friday, AT&T pushed the spat further by filing documents with the FCC saying that Google Voice violates government Internet policies.

You may know AT&T as the exclusive carrier for something called the Apple iPhone. The iPhone has become increasingly popular with consumers because of the amount of applications available. Consumers can download and install everything from games, restaurant locators, ebook readers, light sabers, and more. Apple reviews all submitted applications, and if approved, places them in their iTunes App Store for download.

Google submitted an application called Google Voice, which allows consumers to make and receive calls. Consumers using the service receive a new phone number which forwards all calls to any other phone they desire. The interface looks almost identical to the iPhone's own built in interface, right down to the order of the icons and the visual voicemail. As discussed in a previous blog on UCAN.org, Apple claims they have not rejected the application, and merely are keeping it in a holding pattern. Speculation abounds that AT&T is behind Apple's decision making and doesn't want this application approved.

The FCC launched an investigation into why Google Voice was denied.

Now, in its recent filings, AT&T is claiming Google routinely blocks calls to certain rural areas. It is more expensive to connect to the local exchange carrier network in rural areas. Therefore, Google is able to save costs by restricting these higher priced calls. However, common carriers, such as AT&T, are prohibited from doing this. In 2007, the FCC ruled that common carriers are prohibited from engaging in these types of call blocking activities. Google is claiming it is not a traditional phone service, and therefore the common carrier rule does not apply. Google even admitted in its blog that it may restrict certain outbound calls, but firmly stands on the ground that they are exempt from this prohibition.

Put simply, Google found a loophole that gives it a competitive advantage and AT&T is not happy about it.

AT&T wants the FCC to treat Google similar to every other telecommunications carrier. AT&T is also claiming that Google Voice violates net neutrality because sign-ups are limited and not open to all consumers. However, many critics are stating that this is just a red herring attempting to distract the public and undermine web based competition.

Is it tit for tat, or is Google or AT&T in the right?