Skype Asks FCC to Open Cellular Networks

Milwaukee's_Best writes "Skype has just asked the FCC to force wireless phone companies to open their networks to all comers. Skype essentially wants to turn the wireless phone companies into just another network of the kind currently operated on the ground. This would require carriers to allow any phone to be used on their networks, and for any application. Users would simply purchase a voice or data plan (though these could easily converge into a data plan if VoIP calling is used) and then use the device of their choice to access the network of their choice. Think of it as network neutrality for cell networks. Given the competition that exists within the industry, is this needed?"

Cartel?

[thesupermikey]

I'm I right in understanding that the way cell phone companies control their towers now, I to call it a cartel?

Additionally, the cellphone makers are leasing public property (the airwaves) and building a fence around them to keep the public out (unless you buy a key / plan from them)

Are these metaphors off base?

Free ride for Skype?

[PCM2]

This article seems to be a mishmash of specious and self-serving claims on Skype's part.

The reason for Skype's interest in the issue is obvious: they want to force network operators to allow Skype-enabled calling across their networks, something currently prohibited on wireless data plans. In its filing, Skype argues that this capability would offer "tremendous new sources of price competition provided by entities such as Skype," and that's exactly why wireless operators will fight the plan tooth and nail.

And the problem here is exactly what? It sounds to me like Skype is saying, "Hey guys, if you let us use your networks we'll undercut all your prices and undermine your business models. Then all that money you spent to build out your cellular networks will benefit us instead of you! Deal?"

Unfortunately, the "invisible hand" has been a little too invisble here, and no operator actually offers a wide-open network. Skype thinks a smidgen of government regulation could actually help out quite a bit

No doubt it would. They're trying it in Venezuela. What's the basis for doing it here? Why should Skype benefit and the cellular carriers gain nothing?

Skype (and Wu's paper) point out the various ways that the wireless phone companies block consumer choice: crippling features on phones, locking handsets to operators, limiting consumers' ability to install third-party applications, and limiting the terms of service with bandwidth caps and restrictions on what content can be accessed through the network (Skype calls are forbidden, for instance).

"Block consumer choice" is an interesting choice of wording here. I've heard most of these complaints before. Then again, T-Mobile allows me to install third-party apps on my BlackBerry, and I can even use it as a wireless modem if I hook it up to my laptop. Presumably I could then run Skype on the laptop (though how well it would work is another story). Kinda makes me wonder what Skype is actually hoping to achieve.

Verizon, Cingular, et al. hate this and would love to keep crippling WiFi and Bluetooth access on their phones in order to keep traffic flowing through their network, using their (high-priced) services.

What do WiFi and Bluetooth have to do with running Skype over a cellular network? This sounds like a red herring to allow them to start talking about "crippling" again. How have the carriers "crippled" their WiFi-enabled phones anyway? This one I have not heard of.

And they manage to avoid the most important question: If Skype is encouraging the government to pass regulation to allow Skype into the telcos' markets, can we therefore assume that Skype is willing to itself be regulated, exactly as the telcos are regulated today?

Expensive Data Transfer

[MrSteveSD]

I've often wondered why data sent through the mobile networks (voice, internet etc) is so much more expensive than land based traffic. I mean you wouldn't sit around browsing the web over a mobile phone, even if it did have a huge screen, since you'd go bankrupt. Surely it costs more to dig up a whole city and lay cable than it does to erect some mobile masts, so why is data transferred by cable so much cheaper? Also aside from the initial expense of digging up a city, surely maintenance is more expensive for cable companies since it also involves digging and disrupting traffic etc. It seems to me that we are being massively ripped off.

Libertarians

[SuperBanana]

As a free market libertarian, I vote against this.

I lost all respect for Libertarians after I heard one complain about how his town wouldn't plow his private drive.

Unfortunately, we tried the "libertarian" take early on in the US; business used to be largely unregulated. What did they do with this freedom? Grossly abused the workforce- preferring to employ children and women, who had little socio-political power and thus were easy to control and work to death. Polluted the hell out of groundwater and rivers by dumping their byproducts whereever they pleased, consequences be damned. Today's working conditions are what they are, purely because the government has raised the bar (slowly) on how workers may be treated after public outcry forced legislation. We're not alone.

Maybe if you grew up in a state like Massachusetts where children died getting crushed by weaving machines in fabric mills, and where PCBs were dumped by GE into rivers simply because they COULD...well, maybe just then you'd feel a little differently about regulating industry. Hell, they recently found near the Alewife T station, on the cite of an old dye plant, that people who grew up in the area had cancer rates that were astronomically high. These people, as kids, played on the site- and many of them remember that the ground was so contaminated, puddles would form spontaneously in depressions in the ground that were every color of the rainbow.

competitive industry?

[JimBobJoe]

Given the competition that exists within the industry, is this needed?"

I don't know if I consider this industry all that competitive--it's an oligopoly mixed with a cultural monopoly (what I mean by that is it's the same type of people running all of the companies. The people who run what we now call, again, AT&T, are basically old phone company fuddy-duddies who think it's a privilege (I'm using that word in the worst way possible) that we all have phone service. The same applies to Verizon and to a lesser extent T-Mobile and Sprint/Nextel.)

I'm not sure what I think of the idea. Half of me thinks it would be great, and the other half thinks that the companies would decline to upgrade to 3G, thinking that they'd be better off financially keeping the network slow enough so that Skype couldn't work on it.

Re:Please regulate openness

[danamln]

the fcc should apply the same standard opening both networks and then maybe we can manufacture phones that recognize each other instead of needing a network at all. I can't wait for the day when my cell phone play six degrees of seperation to find the person I'm calling before acsessing any network.

Re:competitive industry?

[figment]

While you are correct as asessing it as an oligpoly, you miss one important part -- how it became an oligopoly.

The rights to that spectrum were carefully auctioned off by the FCC in a semi-public auction. The companies who currently own these rights (Sprint, T-Mobile, etc) paid literally hundreds of millions of dollars for their spectrum property rights.

Thus any re-opening up of the spectrum will easily cost in the hundreds of millions of dollars. All this for skype. This seems quite rediculous, there is already an option for new carriers, who are able to buy excess capacity from the current spectrum owners. This is how the companies such as Disney Mobile, Mobile ESPN (before it got axed), Amped, etc, works. This makes a lot more sense, these spectrum owners weren't just gifted with the spectrum, they won it in an auction, presumably because would be the most efficient operators (reflected in their highest bidding prices).

Re:Competition?

[WafflesMcDuff]

If they didn't allow you to activate a handset that you say is 100% compatible, then I can almost certainly guess what the problem was. A few years back the FCC passed a law requiring all cell phones being activated to be cell 911-compliant. Basically these newer phones contained the ability to automatically connect you to the correct 911 call center when you dial 911 to make sure the emergency services get to you in time. (without this you may as well be calling Delouth Minnesota's call center from New York City). They allowed phones that were ALREADY active without this ability to remain active, as it was deemed unfair to customers to make them go out and buy a new handset against their will all of a sudden. So as long as grandma keeps paying her bill she can keep that brick that sits disused in her drawer active. However, if she deactivates it and then decides she wants it again after all, she will now have to go buy a new phone (or get a free one with a 2 year contract). In reality, your handset is probably 90% compatible with the other 10% being the 911 accessibility that is mandated by law to activate a handset.

this is a ploy

[jay2003]

Skype does not want wireless (or wired carriers for that matter) blocking their VoIP calls. This request is a warning to the wireless carriers that Skype will push for very disruptive regulatory changes if their traffic is blocked. While Skype likely has low probability of successfully lobbying the FCC on the matter, the impact to the carriers is huge so they likely won't want to gamble since call revenue lost to Skype traffic is only at least at the beginning is only a minor ammount.

Re:This will never happen

[n3umh]

No one is proposing taking the networks away from the cell companies. They still get your money when you use Skype over their network.

What they would be taking away from the cell companies is the stranglehold they have on the data services you can get. I think Skype has a good case.

The advancement of wireless communication is not well served by the current crop of cellular providers. They want to use the data capacity they've built to charge you $3 for the latest Justin Timberlake video, and to let you get your email at exorbitant rates. They really don't want to be in the network business, they want to be in the gouging-for-fancy-things-you-don't-need business.

They built their networks believing (correctly, so far) that they'd have this stranglehold. That may have been an incentive for them at the beginning, and I'm sure that someone will say that the nationwide cellular networks wouldn't have been built without that incentive, and maybe they're right, but it's about time for there to be some regulation. The radio spectrum is a public, limited resource.

Purchasing exclusive rights to public property with expectation that you'd be able to hold and abuse those rights forever is a bad business plan. It would be different story, and would not require regulatory intervention if Skype could just go ahead and build their own cell towers and set up their own wireless data network to deliver wireless Skype to their customers. They can't do that. Neither can anyone else who might want to try to bring new services to customers over wireless. The cell phone companies have little incentive to innovate outside of getting people their ringtones and music videos faster. There will eventually be intervention here. I think the precedent referred to in the article is very strongly applicable here.

Re:Libertarians

[mrchaotica]

There are different shades of libertarians just as there are with many things in life. Many libertarians are not complete anarchists, however; they see the role of government as being important for market failures, such as pollution. Charging a pollution tax on the marginal cost of pollution would, in my opinion, completely compatible with a libertarian outlook.

As a "different shade of libertarian myself," I agree completely. The key is to not think of it as "evil government regulation," but instead as "accounting for externalized costs so that the free market has accurate information."

Re:Libertarians

[CosmeticLobotamy]

Where consumer activism would have given us corporations which realized they must act in socially acceptable ways

I'm not sure how much power you think the five guys in the world with the both the time and interest to be consumer activists have, but it's not that much.

government only gives us corporations which can be extreme sociopaths as long as everything they are doing is legal.

Whereas not regulating means being an extreme sociopath is legal. I'm not seeing a lot of good either way, here.

If you're saying there are loopholes and that's bad, you're right. Why not spend your time railing against loopholes instead of against the government in general? You're infinitely more likely to accomplish something, especially if you pick a specific loophole to work on and go from there. It's boring, not nearly as much fun as complaining about the existence of government, but it might actually help something.

Competition is Good

[Bellum Aeternus]

While I don't like Skype per se, they bring up a good point and have Congress's ear. The current mobile providers do everything they can to reduce customer choice and therefore competition. They lock phones, force users into long contracts, and charge outrageous prices. Look to Asia and Europe for examples of successful, open networks with no locked phones and no contracts (yes, you can get a contract for a lower price but you're not required).

Common carrier laws should be applied to the telcos and to Skype; in fact to any large network. The government is supposed to server the people, not businesses. Everyday I hope that somebody in Congress will remember this.

Re:Libertarians

[Rakishi]

We call them Mexicans now. Thank god for regulation!

Most of those woman and children from back in the day would likely cut of a limb to have the same working conditions as illegal mexicans have.

Regulation means they are allowed to do this to an extent and cannot be sued. Yeah for regulation!

Wait, you actually think lawsuits would change anything without regulation? Look at the Ford Pinto, businesses simply take into account how likely and expensive a lawsuit will be and if they still make killer profits it doesn't matter.

Not to mention that lawsuits of the magnitude and number needed require a very fucked up legal system and laws that people can sue under.

How exactly is this better than the same public choosing not to do business with said businesses?

I'm not sure if communists or libertarians are larger idiots in their inability to understand humans and human society. If everyone does those sorts of things and actively covers it up you're neither going to have much choice or much information about which businesses don't (if your competition is "clean" then you simply pay people to publish reports that they're not to confuse the public).

Where consumer activism would have given us corporations which realized they must act in socially acceptable ways ...wow, I mean just wow. No, consumer advocates cannot possibly deal with all corporations when all they can do is to publish reports. Millions would die from products and activities which aren't detected, those that are detected would simply be written off as cost of business and large amounts of fud would keep people from being truly informed. And that's assuming a modern level of corporate integrity, if you have something more akin to the mafia then costumer advocates would simply disappear once in a while.

Re:As a free market libertarian, I vote against th

[Registered Coward v2]

Here in Europe there are organizations that keep the playing field level, by forcing mobile service providers to do just what Skype asks. Here it doesn't really matter which provider you chose; the're all good because they all have to compete in the same playing field. Why should it matter for a provider what 'type' of data is sent over their network, and by what device this data is sent? Data is data, and the more bits they transport the more money they get. Apparently in America this isn't so. Amazing.

And Europeans generally pay more than Americans for that level playing field. You can call almost anywhere in the US to anywhere else for one flat monthly fee and don't have to worry about going from Georgia to Texas and getting hit with roaming charges; plus your fee includes the phone so you don't have to buy it seperately.

Is it "better" - no ; just different. I prefer lower rates to portability. I alos like no roaming rather than worrying what I will be charged if I use my Portuguese carrier's phone in Germany or having to buy a new SIM to get local rates.

Since US carriers offer cheap unlimited data plans Skye could make a decent client for PalmOS and Windows Mobile based phones; but they don't. I used their client on my WM Treo and it was less than impressive; plus since my service already allows me to call anywhere in the US without a surcharge it offered no advantages other than being able to make international calls for a lot less.

Skype should focus on making decent software rather than forcing the government to help them out when they fail in the marketplace.