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BREAKING: FCC Chairman Kevin Martin said Thursday that the commission told large telcos to stop blocking calls into numbers for the Iowa-based free calling operations, threatening punitive actions if the carriers didn’t comply.

While the immediate FCC pressure was a victory for the Iowa telcos and Internet calling concerns whose services had been blocked by AT&T and Qwest, left unsolved is the separate question of whether or not the large carriers have to pay up the millions in disputed connection fees into the Iowa-based operations. But Martin, after a scheduled public appearance in Silicon Valley, made it clear that the commission took immediate action against the moves to block or restrict calls, saying they were in violation of FCC rules.

“We actually contacted the companies that were listed in the press [reports] and said our rules prohibit you from blocking consumers’ access to any of the service providers,” Martin said. Martin said the informal communication to the big telcos who were blocking calls was that if they didn’t stop immediately, the commission would start a formal process for legal recourse within days, and “would end up taking action as we saw necessary.”

According to Martin, all the offending telcos responded and said they would stop blocking — sort of. “One had stopped blocking, but we heard complaints the next week that they were restricting access, sort of narrowing the pipe,” said Martin. “We called them back and said, no, no, you can’t artificially degrade [service] either.”

On whether or not the FCC would force AT&T and Qwest to pay disputed access-charge bills, Martin said that was a separate issue, and covered by petitioning processes that might take further time to resolve. “If you have a dispute about the intercarrier compensation rules, you can file petitions, and come to the commission to get redress,” Martin said. “But you can’t just stop letting consumers make those calls.”

More from Martin’s talk with Silicon Valley digerati coming in a later post.