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:
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?

Almost 10 days ago, Niklas Zennstrom, the co-founder of Skype, threw a party to remember at London’s swanky The Cuckoo Club. The nightclub, which is normally the haunt of Prince Harry and his brother and the rest of the jet set, played host to Skypers — both current and past — including co-founder Janus Friis. Unfortunately, after the party came the hangover.
It is rumored that nearly 30 Skype employees — mostly in the London office, but also some in Estonia, came back from the weekend to find pink slips waiting for them. I am told that most of the folks who were cut were from the marketing side of the business. We have emailed Skype PR to get an update/confirmation on the news of job cuts. It is cruel to say, not a very merry Christmas for those who have been nudged out.
Several senior executives had already quit the company. On Oct. 1, Zennstrom announced that he was resigning as CEO and Skype took an impairment charge of about $1.43 billion.
Skype recently made the wrong kind of headlines when it pulled a switcheroo on some of its London-based SkypeIn customers. eBay has been trying to rationalize the Skype’s operations and at the same time trying to figure out what to do with its ultra-popular but not quite profitable P2P voice service. Google was rumored to be interested in Skype, but we haven’t heard anything at all.
Nokia’s Internet tablet efforts – the 770, and more recently, the N800 – have produced a mixed bag of results. While the techies have been enthusiastic about the Linux-based tablets, the consumer electronics crowd (and buyers) hasn’t been overwhelmingly enthusiastic.
On Tuesday, some Nokia folks stopped by in our makeshift offices and articulated their vision for the tablet series. The company is betting that as more web services start to support the platform, the devices will gain in popularity. The Finnish phone maker believes that tablets are the next evolution of computing, and as web service matures, these Internet-centric devices will gain more traction.
And one such service is Skype. Nokia is expecting that Skype support will make the device more alluring, especially in the overseas markets.
The Nokia N800 is a nifty looking device that is very capable when it comes to making VoIP phone calls – we use Gizmo client all the time. Google Talk hasn’t exactly become our favorite, but like most we think Skype could actually make us use the device a lot more, especially for quick calls to other Skypers.
“Skype is certainly the most popular,” says Ari Virtanen, Nokia’s vice president of convergence products. Nokia will release in an early beta (without SkypeIn/SkypeOut support) in a few weeks, but the full version of Skype client is expected later this summer, Virtanen says. The Skype support, if nothing else, makes the N800 more attractive to folks who don’t want to lug a laptop along on short day trips.

We see N800 becoming a good way to consume music from subscription services such as Rhapsody and Napster. Nokia folks showed off the Rhapsody service, it was simple, easy to use and music streamed quite nicely over an EVDO-powered Wi-Fi network. Nokia wants to add more such services: Yahoo Music, MSN and Yahoo Messenger amongst others to boost the utility of the device. “It is an Internet services based platform,” says Virtanen.
“The world of computing has gone from mainframes to desktops to now laptops,” says Virtanen, “and the next step is tablets.” That future is going to take a lot longer than either Nokia or anyone else can imagine.
The sales register isn’t exactly jangling with regularity. Nevertheless, Nokia plans to add more retail outlets to its sales channel, especially in the US. Currently the device is sold online, and at Fry’s and CompUSA.
The big boost for N800’s descendants will come when Sprint launches its WiMAX network, sometime in 2008. At higher speeds, most web services are going to become easily accessible, and the N800 type devices will see their utility go up.
In a few hours, the annual Spring VON is going to kick off in San Jose, California. Hundreds of companies, big and small will hawk their wares, pundits will pontificate and a lot of people will talk about convergence. But no one will bring up the dreaded question: Is VoIP an excuse for bad voice quality?
Earlier this morning, with my broadband on the blink, instead of iChatting (free) with my parents, I called them from my old fashioned telephone line – you know the kind the incumbents have been selling for over 100 years.
The conversation involved a lot of yelling into the phone – like we used to back in the day when the Internet wasn’t around, and long distance phone calls cost $3 a minute. While the price of the calls has declined to a few pennies, so has the quality of voice.
One can clearly recall a time when Sprint made a big deal about its voice quality, touting it in a “hear the pin drop” advertisement. AT&T spent hundreds of millions in coming up with a better voice experience, a business that didn’t clearly help save the company, though it made Joe Nacchio (oh yeah, the very same one) quite famous. All that is part of the history phone companies seem to want to bury.
The long distance call between San Francisco and New Delhi might as well have been a call between the International Space Station and my landline – choppy, static filled and barely audible. It is a pattern you observe time and again, because more and more incumbents are using VoIP technologies to carry their international traffic, trying to squeeze whatever little profits there are from the ever-declining business.
Lowering their operational costs is an understandable business move, but for companies whose primary reason for existence has been voice, it is just not cricket. On a testier day, WTF would have been my choice of words, but today, the slight nip in the air, bright sunshine and backache in remission, I am in a more generous mood.
VoIP has been a protocol of choice for a while now, and that is why it is hard to understand the quality problems. While consumer facing services such as SunRocket and Vonage, the shoddy voice quality can be blamed on the broadband bandwidth constraints, the long distance carriers (owned by incumbents now) should not have these problems, given that most of them own their backbones, and the gear seems to have matured enough to provide better voice quality. (Read: PSTN vs. VoIP)
Call me old fashioned, shouldn’t incumbents and the upstarts make Voice their core competency, a deluxe experience (like BT), before offering television and high-speed connections or some dumb Wi-Fi phones? Or is it just that we as consumers have been desensitized, our expectations lowered by the poor quality of mobile phone connections that we will put up with anything as long as it is cheap? I don’t think that is the case – and I pray to god, I am not in minority. If it is poor quality one needs to put up with, then free iChat makes more sense to me. Even Skype – which does a relatively good job for a free service!