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Summary:

Updated with FCC Statement: AT&T says it will soon allow Apple’s iPhone to make VoIP telephony calls over its 3G network. Up until now, the VoIP apps used the Wi-Fi networks and were prevented from using the 3G connection. Skype and other VoIP providers had complained […]

iphoneUpdated with FCC Statement: AT&T says it will soon allow Apple’s iPhone to make VoIP telephony calls over its 3G network. Up until now, the VoIP apps used the Wi-Fi networks and were prevented from using the 3G connection. Skype and other VoIP providers had complained loudly about AT&T’s clampdown. The Federal Communications Commission (FCC) had started investigating AT&T and Apple’s business practices.

Ma Bell today said that it has “informed Apple Inc. and the FCC of its decision.” I bet today’s decision was promoted by the tough stance taken by the FCC. And I bet Google doesn’t like this development one bit. AT&T’s capitulation shows that the carriers are losing much of their control over the consumer wireless experience. A big reason for that? Competition in the wireless markets.

In late summer, AT&T said it was taking a fresh look at VoIP capabilities on iPhone for use on AT&T’s 3G network, consistent with its regular review of device features and capabilities to ensure attractive options for consumers.

“iPhone is an innovative device that dramatically changed the game in wireless when it was introduced just two years ago,” said Ralph de la Vega, president and CEO, AT&T Mobility & Consumer Markets. “Today’s decision was made after evaluating our customers’ expectations and use of the device compared to dozens of others we offer.” (from AT&T Press release)

On the Skype blog, Skype CEO Josh Silverman writes:

Since launching our iPhone application six months ago, people have downloaded and installed Skype on 10% of all iPhone and iPod touch devices sold – making it clear that people are extremely interested in taking Skype conversations with them on the go.

All of us at Skype applaud today’s announcement by AT&T (in an FCC filing to be published shortly) that it’ll open up its 3G network to Internet calling applications such as Skype. It’s the right step for AT&T, Apple, millions of mobile Skype users and the Internet itself.

Nonetheless, the positive actions of one company are no substitute for a government policy that protects openness and benefits consumers. We’re all looking forward to further developments that will let people use Skype on any device, on any network.

Let’s just hope more carriers follow in AT&T’s footsteps and allow voice calls over 3G. I think the big issue would be the quality. Given the fragile nature of AT&T’s 3G network, I’m pretty sure we are going to get poor-to-marginally-OK sound quality over 3G. Just like the calls over AT&T’s cellular network. :-)

Update: FCC Chairman Julius Genachowski responds to AT&T’s announcement:

When AT&T indicated, in response to the FCC’s inquiry, that it would take another look at permitting VoIP on its 3G network I was encouraged. I commend AT&T’s decision to open its network to VoIP. Opening wireless services to greater consumer choice will drive investment and innovation in the mobile marketplace.

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  1. ATT is scared of Verizon’s decision about supporting Google Voice.

  2. Paul Kapustka Tuesday, October 6, 2009

    Is this proof that you don’t necessarily need net neutrality regulations to start moving the market? Chalk one up for the FCC’s “bully pulpit,” as well as the Verizon-Google Voice announcement today.

    1. Agreed. I am pretty impressed by how quickly this has come to pass. Now if we could get some equal amount of competition into the broadband market, things would be cool.

    2. NO! This is just proof that the mere threat of net neutrality regulation can produce SOME result. Imagine how much more might happen if neutrality rules were actually on the books & there was real competition!

  3. AT&T To Allow All VoIP Apps On 3G, Even Skype » Techcraver.com | Craving Tech, Craving Life! Tuesday, October 6, 2009

    [...] Malik praises increased telco competition for today’s AT&T announcement.  Some are saying AT&T is trying to counter Verizon [...]

  4. AT&T Allows VoIP Apps over 3G on iPhone Tuesday, October 6, 2009

    [...] partnership today, AT&T has finally relented on it’s VoIP stance for iPhone users. Om shares this latest development and offers up a valid concern: how will AT&T’s network — already under fire for [...]

  5. “AT&T says it will soon allow Apple’s iPhone to make VoIP telephony calls over its 3G network.”

    Whoa. Whoa!

    Om, I thought you said AT&T had nothing to do with Google Voice being rejected?

  6. Om, QOS over 3G via iPhone apps doesn’t have to suck, at least not all the time ;) If the signal is decent, there is really no reason why the call experience could not be on par or potentially even better than cellular calls. I have an iPhone SMB communications project underway that should help to prove this out.

    1. My friend tried a skype 3g call on a old htc winmo phone (the tilt) on ATT 3g (funny how WinMo is more open) . Anyway the quality sucked big time. And from the looks of it the processor matters quite a bit for a low bandwidth connection like 3G.

      The iPhone 3GS has a nice processor, so we may have better luck now, but then the quality of data on the At&T network has only degraded so we may not be so lucky.

  7. AT&T Now Allows Internet Voice Calls On Its Wireless Network Tuesday, October 6, 2009

    [...] and No one has commented Rumors were circulating earlier in the day, but now AT&T has made official its plans to allow Internet calling services to be used with its wireless network. That’s [...]

  8. Just curious why you think Google wouldn’t like this one bit?

    1. Allowing VoIP, and general “openness” was going to be a big competitive advantage of all Android phones, so Android loses some advantage vs.iPhones.

      Though I agree with you. I think that Google will be happy. Their disruptive introduction of Android is opening up the whole market, so their apps will have more freedom on iPhones, as well as Android phones. That just means more advertising revenues for them.

      Apple forced carriers to be more open than they had been. Now Android is forcing Apple to be more open then they had been. The ratchet effect of competition is working in the right direction.

      Consumers: a big win for competition. I love to watch ATT/Apple square off against all comers. Both sides must keep getting better, or lose ground. These are awesome times.

  9. Why is that when a company decides something which is favorable to the consumers (and contrary to our expectations), we put our cynic hat on and say things like ‘I bet today’s decision was promoted by the tough stance taken by the FCC.’ Maybe that is true but at least commend their stance – they stand to loose out a lot due to this for our gain. I bet AT&T would be looking at this blog post and saying – “It’s a cynical world we are living in. If we do things right we don’t get applauded and if we do things wrong we are criticized!”

    Om –> Give credit where it is deserved.

    -Varun

    1. Well, from my point of view, AT&T just accepted the reality that “voice” is just another app…

  10. Doing VoIP over 3G on a daily basis for two years now. No quality issues, not in Europe at least.

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