The European Commission will make a statement on the Microsoft-Skype deal on or before this Friday, 7 October 2011.
Skype is too big to slip under regulatory radar.
Skype was all promise in 2003. Now it is achievement. They are no longer the tiny underdog fighting the phone companies. They are a billion dollar a year business with a thousand employees serving nearly two hundred million people 255 billion of minutes of live conversation every year, rounding slightly. They’ve pulled so much hard currency from national phone companies that Russia’s Chamber of Commerce declared Skype an enemy of the state. They’ve changed consumer behavior and become the default way to talk across borders for anyone with Internet access.
When should regulators consider this a threat?
Now, when an ounce of prevention matters most.
Microsoft wants to multiply Skype’s reach and impact. Microsoft seeks to combine Skype with its other communications properties and bring realtime communication to its non-communication products. Skype, along with Nokia, completes Microsoft’s vision for the Windows Phone operating system. We’ll see Skype inside Microsoft games, Lync business phones, Bing click-and-call adverts, Dynamics call center solutions, Office, Internet Explorer and Internet Explorer.
As huge as Skype is, they could be ten times bigger in a few years with Microsoft’s help. $10B in revenue, 2 billion users, trillions of minutes of live conversation. That comes with market power.
US regulators cleared the deal. A decision by EU authorities is days away.
Who is affected?
At least one Italian VoIP company is reported opposing the deal, per EurActiv. Messagenet asked the authorities to require Microsoft not to bundle Skype with Windows and to compel interop with other Internet presence, IM, telephony, and video chat services.
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Muzaffar Rizvi reports for the Kaleej Times:
“We will make an announcement on VoIP and hopefully this service will be available in the second half of this year,” Farid Faraidooni, chief commercial officer of du, told Khaleej Times. …
“The VoIP service will be a part of du broadband service and it will have its own features and qualities,” Faraidooni said.
Asked about the proposed price structure for the VoIP service, he said: “I don’t want to speculate on pricing even before we launch the service. I don’t think VoIP service on Skype, Yahoo and other networks come free of charge as the users first have to get the broadband connection to log in.”
More ISPs now charge fortunes for blowing your bandwidth cap. Netflix.ca now lets you choose a lower quality video stream for one-third the bandwidth consumption. While Skype automatically adjusts your quality to fit available CPU, bandwidth, and connectivity, would it make sense to offer a bandwidth-conserving user preference for lower resolution video?
I don’t know why I’m flabbergasted; I should know better. Maybe I’ve been swept up in pride over Tunisia’s and Egypt’s fight for Democracy over entrenched power. And then Hillicon Valley reports a GOP briefing memo lumps Skype and Google in with carriers when it comes to net neutrality. The House Energy and Commerce Subcommittee on Communications and Technology is bringing in the FCC commissioners to defend net neutrality on Wednesday. Their congressional fact-finding asks “Network Neutrality and Internet Regulation: Warranted or More Economic Harm than Good?”
Sara Jerome quotes the memo: "If the mere threat of Internet discrimination is such a concern, and if the FCC has done no analysis to demonstrate why one company has more market power than another, why would discrimination by companies like Google or Skype be any more acceptable than discrimination by companies like AT&T and Comcast?"
 You can watch the hearing Wednesday morning, 9:30AM Eastern, on the Republican committee’s web site. Subcommittee chair Greg Walden (Republican from Oregon east of the Cascades) will be your host. From a December 2010 press release: “More troubling than the substance of the network neutrality rules are the legal theories underpinning them. If left unchallenged, this power grab will allow the Commission to regulate any interstate wired or wireless communication on barely more than a whim. For all these reasons, we plan to look at all legislative options for reversing the decision. We also plan to hold a series of hearings early next year on the substance, process and claims of authority underlying this proceeding.”
No pre-hearing public positioning from the Democratic members of the subcommittee.
 America’s incumbent telecom industry spent more than $90 million lobbying congress last year: $49.5 million from telecom services and equipment companies that sell to carriers, and $47.6 million from telephone utilities. This doesn’t include money spent on indirect persuasion, like issue advertising and astroturfing. Despite the partisan framing of this briefing memo, direct industry spending favored whichever party controlled congress.
Committee’s news release below the fold.
Full Story »
I’ve loved MetroPCS for years, a breath of competitive fresh air in an oligopolic mobile industry. They innovate on pricing and contract terms to make mobile service more affordable for millions in America’s cities. Now they’re blocking Skype. Ouch. Are Skype bits more expensive than YouTube bits? Can MetroPCS hold Skype bits ransom for $20 more each month? Is MetroPCS sharing that extra money with Skype?
In other words, MetroPCS wants to get paid when you use Skype, even though you’ve already paid for the Internet access.
But wait! You didn’t! They never sell you the "Internet," just the "web." Most people use the two words interchangeably. MetroPCS hopes you don’t notice they’re blocking huge swaths of the Internet. Hmmm, do "advertising" and "fraud" mean the same thing?
I want MetroPCS and other internet providers to be great dumb pipes. Great by moving my data fast, cleanly, reliably. Dumb like a post office that doesn’t look inside my envelope when they deliver my parcels. Isenbergian "dumb pipes" mean I can trust a carrier to judge my bits by the skin of my packets, not their content.
MetroPCS can’t be trusted to censor the Internet; I don’t know them well enough. Do you trust them to decide which bits are OK for you and which aren’t? I don’t trust my own government to restrict my freedoms; why should I trust a phone company?
Action Items:
A. MetroPCS:
- Play with caps, throttling, and price tiers.
- Don’t discriminate on the content or source of bits.
- Announce MetroPCS supports mobile net neutrality and mobile Carterphone.
B. FCC, here’s your test case. Dig in and aggressively support mobile network neutrality.
C. FTC, truth in advertising? Comparable product labels so consumers what they buy, what’s left out, and how that compares to the market.
Seven stories today:
 1. Don’t log out. Skype’s authentication server, the one that lets you log in, had some problems earlier today. Mostly fixed but still some problems with Skype.com. via Skype’s Heartbeat blog.
2. SMS sending problem. “Some of you may have problems sending text messages (SMS) with Skype at the moment. If a message fails, you’ll see a notification in Skype, and you won’t be charged for the message. We’re sorry for the inconvenience.” via Heartbeat. Wishlist: Online numbers receiving SMS. Wishlist: competitive prices for SMS.
3. Seven years and still no Skype.com phone number. Dan York, who blogs about telephony and frequently blogs about Skype, is the lucky recipient of customer service calls referred by two credit card companies. I suppose Skype is not ready to staff a call center for 600 million customers in every language on earth.
4. Skype opposes the FCC’s flawed net neutrality proposal. "At the outset of the meeting, the participants expressed their unanimous unwillingness to support the proposed open Internet framework in its present form as they understand it." Free Press says these new rules give your mobile ISP control over what you read. The FCC votes next week.
 5. California Skypers moved into new cubicle-free digs at 3210 Porter Drive down the road from Facebook. Thanks for the photos, Jason! Thanks for the tip, Dan
6. Tom Keating reviews the In Store Solutions FREETALK Connect Skype PBX. “Overall, I was pretty impressed with the FREETALK Connect and would not hesitate to recommend it to SMBs looking for a feature-rich IP-PBX that is easy to maintain and doesn’t break the bank.”
7. Pascagoula, Missouri, students skyped Santa Claus. "It was really fun seeing him and I knew he knew every body’s name in the whole entire world," said first grader Folsom Berry.
All I want for Christmas is SkypeKit. I asked for an invite to the private beta 5 months and 23 days ago. I have dozens of things I’d like to try to build. Lots to learn by trying. Meanwhile I’m building skill with my Tropo, Twilio, TokBox, IfByPhone (Cloudvox), Ribbit, QuickFuse (drag and drop IVR!), Yahoo! Messenger IM SDK, Windows Live Messenger APIs, and Google Talk accounts. If only I can stay out of WoW.
Tips for the holidays? Chat with me on Skype. Call me at +1-510-343-5664, follow on twitter @SkypeJournal (just the posts) and @evanwolf (everything). Visit our Skype Journal private technologist roundtable, one of the longest running public Skype chats.
 Ars Technica has a much better and detailed explanation for what’s going on between Level 3 and Comcast. In short, ISPs move data over the internet in two ways: directly to their destination (termination) and through other networks before they get to their destination (transit). US oligopolist cable company Comcast does both.
Comcast told Level 3 to pay a toll before sending Netflix video streams to Comcast users. This fee wouldn’t be unusual if, say, Level 3 were moving the video files over Comcast’s network to Verizon or BT customers (transit). But Comcast is charging both the home user and then charging again for the data the user is trying to download. They’ve already been paid to move the data.
Comcast is holding customers hostage while interfering with their freedom to use the Internet.
Comcast is abusing its oligopoly power.
This is bad for Skype and its customers. It doesn’t take much imagination to see Comcast charging Skype for voice and video call traffic before it ever gets to a callee.
Perhaps it is time to break up Comcast into separate companies: one each for content creation, traffic termination, Internet transit, and communication. Is it too late to block the Comcast-NBC Universal deal? It takes strength and independence to take on Comcast. Few congressmen have either.
 Want to talk trust-busting? Chat with me on Skype. Call me at +1-510-343-5664, follow on twitter @SkypeJournal (just the posts) and @evanwolf (everything). Visit our Skype Journal private technologist roundtable, one of the longest running public Skype chats.
Read more: Skype Journal http://www.skypejournal.com/#ixzz16plD1hFv
 Skype wants to control the mobile market, without third-parties offering access to the Skype network. So they forced Nimbuzz to shut down their Skype features like they shut down Fring, with lawyers, though with less public acrimony. Skype has the power to do this through artful crafting of their licenses; I explained in detail how Fring and Nimbuzz fall afoul of Skype’s Public API license.
Skype’s mobile bizdev execs trumped Skype’s platform technology execs. Skype could have waived their ToS, permitted a one-off license, and brought Nimbuzz (or Fring, for that matter) into the Skype family with early access to SkypeKit for their gateways. Skype was not interested. Skype never offered and their insistence was the same: Stop using Skype in your service. Nimbuzz plans a graceful shutdown of Skype service, starting Sunday, 31 October 2010. I concur with Om that this was Skype choosing to put their mobile handset and mobile operator relationships ahead of their present and future developer ecosystem.
I spoke with Nimbuzz’s Tobias Kemper in August, right after Skype had Fring shut down its mobile Skype client and Skype gateway. He was hoping to formalize his relationship with Skype and to include SkypeKit in his product. He wanted better tools from Skype. He wanted help delivering Skype services to Nimbuzz customers on devices and markets Skype was not able to serve. This is the very center of the idea of platforming. Skype let its lawyers and dealmakers hammer another nail in Skype’s future as a communications cloud provider.
Meanwhile, show your support: Nominate Nimbuzz for the #MashableAwards. And jump on Nimbuzz’s end-of-Skype promotion:
"We’re offering you a 15% bonus credit to use on NimbuzzOut. That’s 15% extra on top of the credits you want to purchase. To access the 15% bonus credit, go to http://www.nimbuzzout.com and once logged-in, use this code NIMBUZZ15 (valid until end of November 2010)."
From Skype’s PR firm:
What did Nimbuzz violate?
We believed and were concerned that Nimbuzz’s application was in violation of Skype’s API Terms of Use and End User License Agreement (EULA). Skype offered to meet with Nimbuzz and discuss the issue; however, we have not heard back from them since our last correspondence with them in early August. Like any company that has APIs or an SDK, Skype has certain rules that guide the development of apps using those tools. Such rules help protect the Skype brand and our end user experience.
Does Skype block mobile developers?
Currently, our APIs and SDK are designed for third-party hardware and desktop software application development. Distribution of a third-party Skype developer application through a mobile phone network operator or mobile handset manufacturer is only permitted with the prior written consent of Skype. Because of the way our software works and the differences between the mobile and PC ecosystems, we have these rules in place to protect the Skype brand and Skype user experience. To ensure this, we only work with mobile operators and handset manufacturers committed to delivering the best Skype user experience, as we’ve shown with 3, Nokia, Verizon and, most recently, KDDI.
What is Skype’s platform strategy?
We envision a future where every connected device will be a communications device. We believe that Skype is the Internet communications platform of choice and we want to make Skype available through an abundance of Internet connected devices and software platforms. Our strategy for achieving this vision is to provide developers with the tools they need to innovate and enhance our connected future with voice and video communications.
What is the difference between Skype’s public API and the new SkypeKit?
Skype’s Public API, which has been available for a number of years already, is a great solution for hardware accessories such as headsets and webcams that connect to Skype’s standard desktop clients. However, ever since we released the API developers have been asking for a solution that works WITHOUT the Skype desktop application. Enter SkypeKit. Think of SkypeKit as a "headless" version of Skype — that is, a Skype client with no user interface that runs invisibly, not only on PCs, but also TVs, notebooks, and other Internet connected devices. Developers communicate with SkypeKit through the SkypeKit API, surfacing Skype features (i.e., IM, voice or video calls) through their own applications.
Today is Supernova Perestroika. Wishing I could be there.
Don’t use the content of my bits to treat my bits differently than anyone else’s bits. That’s the general thrust of network neutrality. Common carriage, that the companies moving my phone call or video call or email shouldn’t know or care about who I’m speaking with or what we’re saying.
Net neutrality came up as Internet service providers struggled to do more than move data.  They blocked Skype, throttled movie downloads, filtered out websites. They decided it was their right to choose on behalf of their customers since they owned access points to the Internet.
Skype and other Internet companies that suffer from bad carrier behavior supported net neutrality for a long time. Skype’s chief D.C. advocate, Chris Libertelli, recently shot the FCC a note: “The issue of Network Neutrality protections for Skype users has been pending for too long. Skype supports quick action by the FCC and today’s vote. Moving forward with a solid legal foundation is critical to promoting investment and consumer choice throughout the Internet ecosystem."
I bring this up because Skype soft-launched SkypeKit last month. SkypeKit lets programmers build Skype inside desktop software and in hardware. Like Apple‘s app store, Skype limits what you can build based on the content of your app: no adult content, no gambling.
Skype claims this right because your SkypeKit app will use some of Skype’s resources. Copies of your app will log in to Skype’s servers and move data through them. SkypeKit-based apps use proprietary Skype intellectual property, like Skype-built communication protocols, codecs, and encryption. Their turf, at least in part, so their rules.
Skype reserves the right to compel you to withdraw your published product from the market if they decide, at their own convenience, that your app violates their content sensibilities. Should they have this power?
Just as the power companies can’t dictate what kinds of purposes people use electricity for, the providers of basic general-purpose communications transport shouldn’t be able to dictate how we communicate. – Susan Crawford, August 14, 2008
Professor Crawford wrote that about network neutrality. Her point seems to apply here. Infrastructure shouldn’t dictate the content of solutions built upon it. Public roads what models of car you can drive. Cars where you can go. Application platforms what you can run.
Should Skype, arguably a phone company and offering a telecommunications platform, have the right in law to discriminate based on the content of your conversation? How about other cloud telephony and cloud platform providers, like Voxeo, Google, and Amazon? We know they have the technical power to enforce their view. Should those powers be supported in law and regulation too?
At what point do the ideas of common or public carriage apply to non-telephony platforms?
"Common carriage was applied to freight or carriage companies and inland and ocean water carriers. By common law, common carriers were 1) required to serve upon reasonable demand, any and all who sought out their services; 2) held to a high standard of care for the property entrusted to them; and 3) limited to incidental damages for breach of duty." — Eli M. Noam, Beyond Liberalization II: The Impending Doom of Common Carriage, 18 Telecomm. Pol’y 435. Sec. II (1994). via Cybertelecom
Serve everyone.
How is carrying our voice bits different than executing our application bits?
Should Apple be compelled to let all apps run on iOS? Should Amazon be indifferent about the apps that run in its cloud so long as they behave non-destructively within technical guidelines?
Should the Carterphone principle (attach any phone to a network so long as it doesn’t harm the network) apply to all APIs by default? Attach any app or service so long as it doesn’t harm network operations?
Should this apply to all platforms? Apple and Amazon are big, successful, market leaders with their platforms. How about a small CAD company without power in a crowded market? Should we consider the long tail of API providers to be common carriers?
How about platforms that are in early testing, where the hosting company is not ready to make a public commitment to the APIs or to the platform? Skype’s SkypeKit platform is in an early closed beta and its APIs are still in flux. Should we exempt early-stage platforms from discriminating on the content of our software?
If software publishing is protected speech,
By whose authority?
Being privately owned isn’t a free pass. Skype answers to its board of directors, not to the public. Then again, so does AT&T. The public doesn’t get to say that my dating site is "adult" except through public discussion. Why should AT&T at the carrier layer or Skype at the application layer?
What constitutes a public interest worthy of taking some authority away from those hosting a platform? Free speech, consumer choice, freedom to assemble (online), access to work (online and off), access to government services and ePolitics? What regulator would have the authority to impose open access? What laws cover this now?
Lots of questions.
One last one.
Should Apple and Skype, both of whom are dictating content on their network, lose exemption from DMCA Safe Harbor provisions? Does restricting some content make them liable for the content they approve?
No more questions.
Courts around the world told Microsoft they had to play fair in the Windows browser wars. Let’s debate application neutrality for our new platforms.
From an email:
Hello fringsters,
As you may have noticed, Skype has blocked fring. We are very sorry for any inconvenience this Skype policy has unfairly caused you.
As loyal fring users, you deserve an explanation: Last week, following the surge in fring video calling traffic, fring service to Skype was temporarily reduced . Unfortunately, Skype and their legal team demanded not to restore your connectivity to Skype via fring.
Needless to say, we are very disappointed that Skype is now trying to muzzle competition, even at the expense of its own users.
While we regret Skype’s decision to block fring, we are committed to continuing to provide you with market-leading innovation, to keep you in touch with your friends, wherever they are.
On fring you can freely use the best mobile over internet communication like video calling, calls and chat anywhere (3G/4G/WiFi) on any advanced Smartphone.
So, if you are frustrated like us with communication barriers, and are just looking for a fun and easy way to stay in touch with your friends on the go, tell them about fring and invite your friends to join fring here.
We appreciate your support and look forward to continuing to provide you with great mobile innovations.
Let freedom fring!
the fringTEAM.
Fring blames Skype.
The question is: should they?
I think so.
More soon.
@DanYork pointed me to Twitter’s banning of advertising networks as it launches its own. Platforming policy isn’t obvious or easy but it’s clear this feels wrong.
The moral offense is one of platform neutrality, as in net neutrality. It would be fine for Twitter to launch its own ad service so long as others could also offer rival ad services. Twitter’s may have a built in advantage but it would have to prove itself in the marketplace where any vendor could challenge with their own products.
At some point you step back and say: Software is Speech. My platform is my speech. Third-party software is their speech. My speech shouldn’t trample your speech.
That’s the emotional note. A host being rude to guests. A platformer abusing its power to muzzle its opposition. A big company hurting the small entrepreneurs that made it great.
Sometimes you do hard things as a matter of survival. Facebook censors hate speech, for example, although it doesn’t want that role. Failing to censor would put the company at risk so Facebook’s publics acknowledge its duty to infringe on the speech rights of its members.
Did Twitter need to shut down other ad networks for theirs to prosper? I don’t know.
But it feels wrong. It feels like… tyranny.
I trust the Twitter company less this week than I did last week.
 Wouldn’t it be cool to have book readers that could IM and offer presence? Maybe take or make phone calls? Now that Amazon announced it will open its Kindle book readers to third party developers, Skype could build an app for this new platform.
No it can’t. Amazon warns "Voice over IP functionality, advertising, offensive materials, collection of customer information without express customer knowledge and consent, or usage of the Amazon or Kindle brand in any way are not allowed."
I can think of three reasons for this ban:
- Amazon is worried about using up a year’s worth of data plan with one long phone call.
- Amazon contracted to ban VoIP at the request of its mobile carriers.
- Amazon wants to reserve VoIP for a future Kindle product. The Amazon phone?
Kindles have a mobile phone built in and a lifetime data plan, apparently a dream VoIP device (although better speakers, a microphone, and a webcam would be nice). Amazon will require apps to pay for data transfers at $0.15 per megabyte. So I’m betting Amazon is most concerned with keeping the costs of their mobile plan affordable for users.
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7 years and 2 days since Skype Journal launched as a stand-alone blog.
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