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Summary:

FCC Chairman Kevin Martin said recently he was dismissing a petition from Skype that would force operators to connect any lawful device to the telephone network provided it doesn’t do harm to the network. The decision demonstrates nothing less than a failure on the part of a U.S. government agency to comprehend the available technology infrastructure. And it portends for a less competitive U.S.

Written by Jim Courtney, an associate editor of Skype Journal.

Having been trained as an engineer, scientist and business person, I’m always amazed at how the U.S., the self-assumed leader of free enterprise and democracy, seems intent on stifling their own economy and innovation ecosystem through ongoing government support of special interests whose business models are challenged by technological innovation and breakthroughs.

This week brought just the latest example. FCC Chairman Kevin Martin told an audience at the CTIA Wireless Convention in Las Vegas that he was dismissing a petition from Skype that would force operators to connect any lawful device to the telephone network provided it doesn’t do harm to the network. This in a world in which Japan, Korea and Europe are providing the infrastructure that has allowed open competition, that separates the pipes from the content — Stockholm is a prime example — and that clearly provides much lower cost and higher participation communications activity for both the consumer and the enterprise.

This decision demonstrates nothing less than a failure on the part of a U.S. government agency to comprehend the technology infrastructure available to enhance business processes, build effective hardware platforms and take advantage of today’s more cost-effective rapid software development tools. And it portends for a less competitive U.S.


As for the impact on Skype’s presence on mobile platforms, it’s negligible at best. There are significant wireless data infrastructure issues that need to be addressed before there can be true VoIP over wireless with a business model that’s acceptable to carriers. Several vendors, such as iSkoot, IM+ for Skype, Fring and Mobivox, have found ways to access Skype via any carrier; they may not always have the full feature set but often having voice and chat is sufficient.

iSkoot has started to develop some carrier partnerships as they have found a way to bring both market advantages and cost savings to carriers using lessons from a SS7-type algorithm. By building on this algorithm, they also provide a means to access Skype for those smartphone owners who are on carriers with whom iSkoot does not have a direct relationship. IM+ for Skype allows you to set up calls not only for your own mobile phone but also to have them sent to other phones, such as one at the office. Mobivox simply provides access to Skype contacts from any phone handset with the help of VoxGirl and her speech recognition capabilities.

Over 80 percent of Skype users are outside the U.S. When a broader U.S. public starts to realize that the communications offerings found in Europe and the Far East are far superior to what they’re being offered, a movement will arise demanding change. It just may take a few years.

By then, with the adoption and implementation of Wi-Fi in homes and offices and the spread of dual mode GSM/Wi-Fi phones, such as any WiFi-enabled Blackberry 8×20, there will be many ways to circumvent the carrier networks. Users will start to ask about applications that they can run over Wi-Fi networks, not carrier networks. Once there is broad user demand for more openness, the politicians will respond.

The Martin recommendation, however, will limit hardware innovation over the long term. It will limit innovation in services and applications and it will put the U.S. at a competitive disadvantage for both business and consumers. But will it also drive the carriers to invest in the infrastructure required to support and match the offerings, both services and applications, available in Europe and the Far East? Will it really encourage the carriers to really open up their systems through appropriate APIs and rewarding business relationships? Should the U.S. (and Canada) be striving harder to have an infrastructure based on the Stockholm model, whereby users have fiber to the end point — effectively built as a regulated utility providing the “pipe” — pay under $20 per month for unlimited very high-speed data (100 Mbps) and have their choice of service providers?

In the meantime, the best response for current users is to go into guerilla warfare mode:

  • use iSkoot or IM+ for Skype to access your Skype and SkypeOut contacts from mobile devices such as Blackberry, Nokia and other smartphones
  • encourage the implementation and use of readily authenticated Wi-Fi access points at your home, office and other frequently visited locations.
  • use applications such as SlingPlayer for Mobile and Qik.com on devices where it is supported and cost effective for the end user.
  • show the carriers they are losing significant business.

If a broader base of users than simply “in-the-know” technical geeks start to experience these applications and services, awareness of the issues raised by the Skype petition will be spread virally, and we all know that’s the most effective marketing available. Change can be driven, if enough are aware of the issues and are ready to speak their voice. And isn’t that the American way?

  1. I’m always amazed at how the U.S., the self-assumed leader of free enterprise and democracy,

    Read Chomsky.

    p.s. who is ‘Guest Column’?

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  2. The real difference is not between the “Stokholm model” and models used in the US.
    The Stockholm model would never had happened had the Swedish government not mandated that all of its citiziens needed to have equal and cheap high speed access to Internet.

    Stockholm just happens to be the capital city with the highest population density in the kingdom and also, because of the fierce winters, with a well thought out and built underground tunnel network which made it relatively easy to pull the fiber to every building in the city. So it was the natural starting point for country-wide implementation. Most of the back country will have theirs probably not by fibre but by satellite, a couple of years from now. Again, an undertaking which would not have started without the government mandate.

    Will such mandate with sufficient teeth ever emerge from the US government? I seriously doubt it. It would probably be seen as the government tampering with competition.

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  3. Shocking to hear the FCC comment. Reminds me of that ATCA petition in nineties to ban PC-to-PC VoIP. While the US is becoming increasingly protectionist across a few industries, the problem with mobile VoIP is that there are no solid parties there that could give MNOs run for their money. Unlike in fixed VoIP, there are no triple play ISPs in mobile VoIP. The fixed VoIP offering of incumbents was driven mainly by competition from the triple play ISPs like Free and ASPs like Vonage. That kind of breed, we do not have in mobile VoIP.

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  4. umm, this article is wack. Skype is not carterfone. If you don’t understand why wireless carriers are worried about VOIP — and every reason to be — then you are crazy. Skype is an application that runs on phones and computers — and it not any part of the FCC’s mandate to police that stuff. Why don’t they open up Windows why they are at it.

    Not to mention Skype is a red herring. Look at the battery life of dedicated 802.11 skype phone and see how many consumers would be happy having two hours of battery life on their mobile. Truphone on my nokia drains the battery in about the same time. That’s why we don’t see Skype/VOIP on mobile — not just the carriers blocking it.

    The Skype decision is not the reversal of carterfone. As hard it is for engineers to understand, the FCC is based on LAWS — and when something is outside their power, they can’t do much (and when they do, courts will strike them down). Applications running on phones are not what the FCC should be regulating.

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  5. [...] players expressing heated disapproval towards Martin’s out-of-hand dismissal, asserting in a GigaOM editorial yesterday, “This decision demonstrates nothing less than a failure on the part of a U.S. government [...]

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  6. I gotta agree with you, from a totally different angle.

    The network provided by these wireless carriers would have provided a much needed choice for those currently offered broadband by 0, 1, or 2 carriers.

    … AND THE FCC PASSED ON THE OPPORTUNITY.

    I couldn’t believe it!

    The average American already knows we’re behind the world-wide curve. They don’t understand the differences that answer the question, “why?”

    Robb Topolski

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  7. That’s Why Mobile WiMAX will show the way!
    The users have lived too long with walled garden approach which is usually provided by mobile networks. Despite many claims for open access ( the users can access any website), the launch of applications on handsets needs native applications rather than through we access.
    It is obviously not in the interest of mobile companies if users having an unlimited internet connection stop paying for any voice calls by using Skype ( for example). Hence it is not surprising that they would tend to oppose any such moves. However what is surprising is that FCC, known to be in favor of open access would stop short at making this possible.
    However this is where mobile WiMAX is set to score. Mobile WiMAX is an extension of the internet to the mobile domain without the restricting boundaries. Any application meant for the internet is available in the mobile domain.

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  8. [...] “FCC Handcuffs U.S. Mobile” [...]

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