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Is Skype "Carterfone"?

By Gary Kim, Contributing Editor

I doubt this is the year, in fact neither is the next, the year that mobile VoIP is deemed to be a wireless version of "Carterfone (News - Alert)," the seminal decision that lead to a consumer right to own and attach their own phones and modems to the public network. But those wheels seem to be in motion.

 

Deutsche Telekom bans use of Skype (News - Alert) on its wireless network, though there is no such restriction on its wired facilities. AT&T likewise permits Skype use on Applie iPhones when in Wi-Fi mode, but does not permit such use when a user is connected to the broadband 3G network.

 

Since 2007, Skype has been trying to win a Carterfone-type ruling from the FCC (News - Alert) to require open device interconnection over mobile networks. Wireless operators have been fighting it, as you might suspect. That won't be a popular stance. It's pretty hard to argue that a customer who has paid for best-effort Internet access should not be allowed to use any lawful Internet-delivered application, best effort.

 

But it's also pretty hard to argue the reverse: that an application provider is not free to use application acceleration it has paid for, to make its user experience better. Nor is it going to be that easy to argue that an access provider has no right to offer a range of packages and services, with features and capabilities differentiated in some way, that a customer is able to buy if they choose to.

 

The current stance, essentially blocking mobile use of Skype or VoIP, essentially is being defended as a simple matter of freedom (as well as private property rights): Skype has the freedom not to offer AT&T voice services, and AT&T has the freedom not to offer Skype.

 

It will strike most readers as a somewhat arcane debate, but before communications and media regulations use distinct frameworks, when viewed as technologies that promote or impede user freedom. No user has a right to demand control of a local TV, radio broadcast station's programming. No user has a right to demand access to, or control of, a national programming network.

 

The issue, to boil it down, involves freedom of speech, and whether it is the rights of a speaker, or the rights of a listener, which are to be protected. Traditionally, the difference has been that the Founding Fathers saw the protection of free political speech as a right of the speaker.

Later interpretations have fudged the issue (not necessarily in a helpful way) by sometimes balancing that right with the "rights" of those who might listen to free polticial speech. To do so of course necessarily impedes the right of a speaker to free political speech.

 

But communications has used a different "common carrier" framework: carriers essentially may not refuse to carry messages or interconnect with other carriers. Internet regulation is a bit of a hodge podge, like "communications" in some ways, but like "media" in others. Applications cannot be blocked by wired access providers. Obviously, since wireless networks carry a "lighter" regulatory burden than wireless, the application of wired provider rules to wireless is not straightforward.

 

But one presumes the carriers can delay, not stop, the wireline framework being applied to wireless, eventually. VoIP already is possible using Wi-Fi because a Wi-Fi connection essentially is merely a wireless tail to a wired access circuit. As more phones are supplied with Wi-Fi, some users, some of the time, will use VoIP over Wi-Fi connections.

 

Over time, of course, everybody expects voice to lose its status as the revenue underpinning for all communications networks, wired or wireless. The issue is how long the transition will take.

 

Competitive strategy could be a factor as well. If AT&T and Verizon continue to fight mobile VoIP, Sprint or T-Mobile (News - Alert) could decide it is a marketing advantage to permit or promote it. The decision won't be easy as voice really is the revenue driver for all mobile carriers at the moment.

 

But the interim period, before all mobile providers permit or promote IP-based voice is a time when some competitive advantage could be gained, even if it is partly a case of cannibalization. An attacker could gain subscribers even if it loses some voice revenue. It will be a gamble. At some point, it will be gamble it seems one of the facilities-based mobile networks will be willing to take.

 

"Wireless Carterfone" won't happen for a couple of years. But it is hard to see it failing to happen. In the meantime, much hinges on how fast providers can position themselves for the change.

Gary Kim (News - Alert) is a contributing editor for TMCnet. To read more of Gary’s articles, please visit his columnist page.

Edited by Jessica Kostek