Skype Gets a Tongue Lashing

Verizon Wireless, AT&T and CTIA lashed out Monday at VoIP provider Skype’s proposal to require wireless carries to open their networks to any type of device or Web application (i.e. Skype).

The companies, along with the cell industry’s trade organization, responded to a February petition Skype filed with the Federal Communications Commission (FCC) asking the agency to apply its consumer broadband principles to the wireless industry. Those rules were drafted largely with cable modem and DSL broadband service in mind.

Carriers claim the principles shouldn’t be applied to wireless networks because of spectrum limitations and unique network management issues.

“The circuit-switched voice service AT&T provides is optimized for the wireless environment. Indeed, AT&T has carefully designed its network to provide optimized circuit-switched voice service, maximizing scale and cost efficiencies,” AT&T wrote in opposition to the Skype petition.

“Because VoIP is not optimized for the wireless environment, carrying VoIP calls over the wireless data network consumes substantially more bandwidth than a circuit-switched voice call … without any commensurate improvement in quality.”

In its 2005 directive, the FCC said that consumers are entitled to access the lawful Internet content of their choice, run applications and services of their choice and plug in and run legal devices of their choice.

The FCC also said consumers have a right to competition among network providers, application and service providers and content providers.

“Skype asks the Commission to adopt regulations that would choose Skype’s business model over the benefits consumers derive from the competitive market,” wrote CTIA in its opposition. “This is not a market that is broken.”

Verizon Wireless also weighed in heavily against Skype’s petition. The wireless carrier said Skype is seeking a “government-imposed open access regime, but it fails to make a case for the sweeping and intrusive regulation it wants.”

When the FCC approved its consumer-broadband principles, few asked whether the rules also applied to cellular networks offering a broadband connection. More than a year later, Skype filed its petition.

“As long as consumers used wireless service only for simple voice calls, the fact that they were largely confined to using carrier-supplied equipment resulted in limited harm,” Skype said. “However, as innovative ‘smartphones’ marry the versatility of computers with the convenience of mobile equipment, manufacturers are poised to equip handsets with Skype features but are reluctant to do so if such features threaten wireless carriers’ established business model.”

Skype further complained the carriers were blocking services like VoIP to gain a competitive advantage.

“The wireless industry remains the only widely used communications network in which the network operators exercise effective control over the devices used by consumers,” Skype wrote. “In an effort to prefer their own affiliated services and exclude rivals, carriers have disabled or crippled consumer-friendly features of mobile devices.”

The comments weren’t all negative for Skype, as consumer and public-interest groups lined up with the company.

“Consumers find that handset features and capabilities such as Bluetooth and Wi-Fi are disabled or crippled by the carriers, thereby limiting the usefulness of the devices and wireless services for applications, such as photo sharing, file transfer or making phone calls via VoIP,” a group including the Consumers Union and the Consumer Federation of America said in its response.

And the New America Foundation, Public Knowledge, Free Press and the Media Access Project added, “Wireless carriers are hampering innovation and raising costs by using market, technical and contractual barriers to limit consumer choice and reduce competition in communications software and consumer equipment.”

The issue is not going away for either Skype or the wireless carriers. The FCC is now accepting comments on the recently filed responses. After that, the FCC has the option to reject Skype’s petition or open a proceeding to explore possible rule changes for the wireless carriers.

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