AT&T caved on Voice over Cell. 12 Attacks To Come?

AT&T loathes Skype. Skype costs them international calling money and changes consumer expectations in ways mobile carriers cannot respond. So AT&T forbid Apple to permit Skype voice calls over the wireless network. It worked for two years. Now that barrier is down, how else can they slow or stop Skype? To bring a humble Skype to the negotiation table? Three anticompetitive strategies:

The Parity Strategy: Get government to treat Skype like a fat incumbent landline phone company.

• e911. Emergency dialing is expensive, unreliable with softphones like Skype, and different in every country. Skype says it is not a phone company, so the US FCC should not require Skype to offer emergency dialing. The incumbents would love to saddle Skype with this requirement.
• Assistance to the Hearing Impaired. Require Skype to offer interpreters for the deaf.
• Skype and US, State and Local Phone Taxes. Lobby for Skype to collect federal, state and local value added taxes and fees. Blur the distinction between Skype and phone companies. Complicate Skype's prices and products.
• Metro/State/Provincial Regulation. Encourage non-Federal governments and agencies to entangle Skype in hearings, compliance procedures.
• Administrivia. Phone companies file detailed reports with state and federal regulators. In triplicate. Ask local agencies to swamp Skype with requests for information.

Attack Skype's Brand.

• Pollute Skype's Security Brand. Skype has a reputation for being very secure, relatively spam free, and a safe way to communicate. Invest in academic challenges to Skype security. Publicize every stalker, lawsuit and robocaller. Host "ethical hacker" contests and spread the results.
• The Weapon of Evildoers. "Criminals and terrorists use Skype." Host conferences for police and intelligence agencies on threats posed by Skype. Urge them to compel Skype to give up encryption. Force Skype to rebut law and order politicians.
• Reframe Net Neutrality. Net neutrality improves Skype user access to networks. Supporters of net neutrality use language like freedom and choice. Instead, blame Skype for slow pipes, limited coverage and congested bandwidth.
• Not Invented Here. "Buy American," don't give your hard earned money to that foreign phone empire. A little astroturf goes a long way.

Divide and Conquer.

• Sponsor Class Action Suits. Pit dissatisfied customers against Skype. Force Skype to invest in lawyers, not engineers.
• Start the Skype-Killer Adventure Fund. Confuse Skype's customers with a market full of Skype clones. Pay peanuts to attract entrepreneurial talent to your war on Skype.
• Raid Skype Talent. Half of Skype's employees are paid Eastern European wages. Aggressively recruit them, stalling Skype's projects.
• Repeat Worldwide. Share with telcos in every market a template for attacking Skype. Make Skype struggle in every country.

tags: skype, competition, att, at&t

Call me at +1-510-316-9773, Skype me, follow @skypejournal and @Phil Wolff.
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illustration: LuMaxArt

Josh Silverman v. Verizon at Brookings

Guest post by Mark Poole, member of the Skype 5.X Discussion

Skype CEO Josh Silverman joined FCC Chairman Julius Genachowski, Free Press's Ben Scott and Verizon government affairs VP David Young for two hours at the Brookings Institute today. These are Mark Poole's notes from that panel.

This webcast spotlighted the issue of access. When the discussion turned to open access via the cell network, someone used the description dumb pipe. It's not the copper line, fiber optic line or the wireless signal flowing between cell towers that is dumb. The leadership of companies that provide these pipes is dumb.

"The exact expectations you have of your PC, you're going to have of your mobile phone." — Josh Silverman

The guy from Verizon really gave a glimpse into the thinking of wireless providers. He wanted on one hand to say they applaud openness to the Internet but then offer excuses why a program like Skype might not work over his network.

Rather than plan for a robust system that will handle demand today and five years from today and at the same time charge a fair price for use of their pipe, they want to try to compete with companies that offer web stores to sell applications. He described Verizon Widgets and the FiOS cable offering. He spoke of value add services Verizon can provide developers who sell through the Verizon store. Verizon's greed may be their undoing.

Silverman did a good job of diplomatically pushing Verizon to move to more open access. The potential problem with open access and Verizon along with other cell providers will be if they continue strong arm tactics when it comes to plans they offer. Charging ten to twenty bucks for monthly unlimited texting and forcing customers into high monthly minute plans, so they can get promotions like Friends and Family from Verizon, run contrary to where we should be today. It's all about access without regard what we do with that access. This is another example of dumb company leaders not dumb pipes.

Silverman presented the notion that open access for all will allow rapid innovation to continued. He pointed out how the cycle time for new technologies, disruptive technologies was getting shorter and shorter. He tried to stroke the ego of the cell providers by telling the Verizon rep that what they were doing by providing access was not really providing a dumb pipe but instead a complex job.

From my perspective the public interest won out completely. One of the other participants said the speech by the FCC chairman (.pdf) today was a paradigm shift. He looked back to two other shifts and differentiated today's by saying that the previous shifts were more about the rights and ultimate profits of a few instead of policies that favored an individual's rights and use of the Internet. Today's speech was clearly aimed at keeping access to the Internet open and with as few speed bumps as possible when it comes to high speed access.

See also:

• Skype CEO Lobbies for Skype on 3G, Om Malik
• FCC Backs Net Neutrality — And Then Some, Ryan Singel
• Genachowski's 'open Internet' guidelines offer few specifics for wireless, Mike Dano
• The new EU Telecoms laws must be finalized so as to protect Internet users' basic right to an open Internet, Jean-Jacques Sahe, Skype EU Government Relations
• FCC Chairman wants network neutrality, wired and wireless, Nate Anderson. "FCC Chairman Julius Genachowski waded directly into the network neutrality fight today, launching a new proceeding designed to turn the FCC's existing "principles" into "rules"—and to add two more. The rules would apply equally to wired and wireless connections."
• Yup, the FCC supports Net Neutrality all right, Nicholas Deleon. (Great metaphors

Julius Genachowski speech at Brookings on Two New Rules

tags: skype, brookings, freepress, verizon, joshsilverman, events

Call me at +1-510-316-9773, Skype me, follow @skypejournal and @Phil Wolff.
Visit our Skype Journal private roundtable, one of the longest running public Skype chats.

What's Wrong With This Picture, Eh?

The U.S. cell phone industry is asking its customers to only text during the inauguration ceremonies tomorrow. From the New York Times:

The largest cellphone carriers, fearful that a communicative citizenry will overwhelm their networks, have taken the unusual step of asking people to limit their phone calls and to delay sending photos. The carriers are also spending millions of dollars to temporarily and substantially upgrade their networks in Washington.

And the article goes on to request that customers delay sending photographs; they warn of delayed text messages and difficulty getting onto the (mobile) Internet.

But then all weekend I have heard CNN wanting to try out some "new technology" asking that as many of their "viewers" as possible send in photographs of "The Moment". so that they can do a mass (Microsoft) Photosynth montage. Is this a recipe for Atlantic seaboard wireless network meltdown at noon Tuesday (EST or GMT-5)?

James Kendrick talks about his problems in San Francisco with AT&T; I experienced similar problems roaming on AT&T in Las Vegas at CES 2009 and in California back in September. At CES this was resolved only by setting my BlackBerry Bold to use just the "2G" network on the advice of an employee of a company who really would know; that tip resulted in a more stable and reliable operation. For those U.S. friends who want to experience a robust, reliable 3G GSM/HSDPA network, I invite you to move to Canada to be on Rogers. Rates may be a bit higher, but it's always there, robust and reliable, in the advertised regions. Best proof: handling SlingPlayer for BlackBerry when driving along the 401 freeway at 100 km/hour.

Finally, first test of Barack Obama's ability to change the U.S. government bureaucracy? His ability (and his resolve) to keep at least one of his two BlackBerries. And to save embarrassment when he next drops his BlackBerry, I would have to recommend an Otterbox Defender case.

Let's hope Barack's team can sort out the U.S. wireless scene to foster robustness and reliability as well as real innovation once again.

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Truphone Breaks the Carrier Barrier

Truphone's announcements last week overcame a significant carrier resistance barrier to using VoIP-enabled services to reduce international calling costs. The key secret here was that it required the combination of Truphone's iPhone and iPod Touch applications along with the Apple Application program that leverages Apple's established carrier relationships to break this barrier.On Friday I was finally able to complete provisioning of Truphone on my iPhone. It happened at this time for three reasons:

• The association of my original Truphone number and account with a Nokia N95 handset and the "416" number I eventually transferred to my iPhone whose acquisition as an upgrade on my carrier account minimize my iPhone costs over the term of the three year contract.
• The original iPhone application only supported outbound calling; I would have lost the Truphone inbound calling feature I had on the N95.
• For this reason I left Truphone on my N95 (using a deactivated SIM and my home office WiFi access point) pending the arrival of a Truphone for iPhone application and service that supported both inbound and outbound calling.

Recall also that the original Truphone for iPhone only allowed calls over WiFi access points with no ability to pass them through the underlying 3G wireless carrier. Truphone's two announcements last week addressed three issues:

• Truphone for iPhone now supports both inbound and outbound calling
• Truphone added the Truphone Anywhere service such that Truphone for iPhone calls could be made over the underlying 3G carrier as well as over WiFi.
• Truphone for iPod Touch (2nd generation) invoked the Truphone Anywhere service allowing calls to be made from iPod Touch to any PSTN number.

Over the course of the past week it has become possible to make low cost international calls from any iPhone or iPod Touch mobile device worldwide. Truphone has demonstrated how the underlying service provider can can eliminate the need to have a multitude of individual "carrier-service provider agreements" with the 79 carriers currently offering the iPhone worldwide. Yet carriers still benefit through increased local minutes used to provide the connection to/from Truphone calls. To quote from Ted Wallingford's "Heartburn Chuckle: The telecom industry can blame itself":

The Carriers

The carriers are firms like AT&T, Windstream, Verizon, BT, and so on. Their obsession with the billing unit (the almighty minute) has made them helpless to see the possibilities of a software-rich, application-based global ecosystem. Consequently, the most successful apps to arrive on the carriers’ networks, the ones most embraced by the public, overwhelmingly have one purpose: to steal billable minutes from the carriers. The innovation disappeared and the scrappy new players in the market, the ones with the power to transform the public’s thinking about telecom, instead got stuck doing the same old thing the big telecoms do to put bread on the table: bill minutes. [Author's italics]

For instance, Canadians can now use Truphone for iPhone as their international calling service over Rogers without the need to subscribe to one of Rogers international calling plans but perhaps with an increase in their monthly "local" voice plan minutes. In this case, there is no cost for the actual application and you establish international call credits through a Truphone account. When Rogers' iPhone customers travel to Europe, calling back to North America can be handled at a much lower cost through hotel, cafe and airport WiFi services, such as Boingo or iPass. (True roaming calls from outside the "home country" over a 3G carrier will still be expensive; Andy's post linked here suggests RebelSIM provides a solution.)

It was the second part of this announcement that is most significant. Previously VoIP-enabled services, such as 3's Skypephone, required working with individual carriers to establish the appropriate business and operating agreements. However, in one move, Truphone was able to leverage Apple's relationships with 79 carriers worldwide to bring about commitment free international calling. Apple, through its Application Program has become a disintermediator, facilitating a business model disruption, once again.

As for the iPhone for iPod Touch application; this is why the most successful carriers need to offer both wireless and broadband Internet services. Calls via WiFi access points, including one's broadband Internet service, go over the broadband connection and reduce carriers' needs to build out the capital-intensive wireless network infrastructure, including backhaul.

In a future post, once I've had some more Truphone for iPhone experience, I'll do a comparison of services available over Skype and over Truphone. But one obvious difference: Truphone is about voice conversations only; Skype is about voice and text conversations.

Related Post: Race to Provide Low Cost International Calling Heats Up

Tags: Truphone, iPhone, carriers, voip, Skypephone, iSkoot, international calling, service providers, WiFi

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