Skype asks FCC for a hand


Networks are networks and cell phone restrictions aren't in the customer's best interest
Normally I would oppose government intervention in the free market.

But cell phones are basically government enforced monopolies. Their "exclusive" licenses lock out competition. My own recent experiences show me that the cell phone carriers are hardly interested in what their customers want. And that is why I am cheering this.

Skype yesterday petitioned the FCC to lay the smack down on wireless phone carriers who "limit subscribers' right to run software communications applications of their choosing" (read: Skype software). Skype wants the agency to more stringently apply the famous 1968 Carterfone decision that allowed consumers to hook any device up to the phone network, so long as it did not harm the network. In Skype's eyes, that means allowing any software or applications to run on any devices that access the network.

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.

Something similar has happened before. In the early days of the wired telephone network, the phone company provided not only network service, but also the equipment, and routinely took firms to court if they sold products meant to be attached to consumer telephones (which were still owned by the phone company). In 1956, a court ruled that a device called the Hush-a-Phone was allowed to be fitted onto the telephone so long as it was "privately beneficial without being publicly detrimental."

In 1968, the FCC endorsed this principle in the Carterfone case. The Carterfone was an early attempt at building a wireless phone. It used a two-way radio and an acoustic coupler to patch a person's voice into the telephone network, and the FCC again ruled that this was allowed so long as the network itself was not harmed. The principle is still in place today, and wired phone networks now stop at a small termination box usually located on the outside of homes; anything past that point is the homeowner's responsibility, but phones, modems, and faxes can all be hooked up to the network without requiring phone company permission.

I honestly believe that this would have happened anyway without Federal intervention once satellite phones started dropping in price. But in this case, if the Feds require landline networks to allow other connections, then the precedent is clear for cell phone networks as well.

There is at least one implication that I will be following closely if this becomes an FCC rule. Potentially, this could mean that Apple's iPhone won't be restricted to AT&T Wireless (formerly Cingular) networks. It may be possible to access the premium features from anywhere because the servers will have to be open to everyone.

— NeoWayland

Posted: Fri - February 23, 2007 at 01:33 PM  Tag


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