Net phone company is pushing for rules that would let consumers decide which devices and software they use on cell phone networks.
In a document dated February 20, Skype asked the FCC to apply to the wireless industry what is known as the "Carterfone" rules, which would allow consumers to use devices and software of their choice on cell phone networks.
Skype's motivations are clear. The company has created software that allows people to make free phone calls across the Internet. And now it wants users who access the Internet via a mobile device to be able to use their software and services, too.
"We want to allow our users to use the Skype software where ever they are," said Christopher Libertelli, senior director of government and regulatory affairs for Skype. "And we want to make sure the policy is set in the right direction so that when Skype users want to use it on mobile devices, they'll be able to."
The "Carterfone" rules, which were enacted in 1968 during the old AT&T's monopoly of the phone industry, allow consumers to hook any device up to the phone network, so long as it did not harm the network. Prior to these rules, AT&T provided all telephones and devices connected to the telephone network, and it routinely sued companies that sold unauthorized products that could attach to the network.
The rules helped spur new innovations, such as the fax machine and Internet modem. In more recent times, the principle has been extended to other communication networks, such as cable modem and DSL. This has paved the way for companies such as Linksys to sell wireless routers.
But the principle has not been applied to cellular networks. As a result, the market has evolved into one that is heavily controlled by carriers. They dictate which phones are used on their networks, what content users can access, and which applications can run on phones. Some have even included specific terms in their service contracts that prevent customers from downloading and using software from Skype on their networks.
Tim Wu, a law professor at Columbia University, published a report earlier this month also arguing the "Carterfone" rules should apply to the cellular industry, because otherwise carriers exert too much influence on the design of the devices and the applications that run on them.
"They have used (their) power to force equipment developers to omit or cripple many consumer-friendly features," he writes. "Carriers have also forced manufacturers to include technologies, like 'walled garden' Internet access, that neither equipment developers nor consumers want. Finally, through under-disclosed 'phone-locking', the U.S. carriers disable the ability of phones to work on more than one network."
Not surprisingly, the cell phone industry's trade organization, CTIA, doesn't agree with Skype or Wu that regulations are needed.
"Skype's self-interested filing contains glaring legal flaws and a complete disregard for the vast consumer benefits provided by the competitive marketplace," Steve Largent, chief executive of the CTIA, said in a statement. "The call for imposing monopoly era Carterfone rules to today's vibrant market is unmistakably the wrong number."
But some experts believe that with or without regulation, the days of carriers controlling the customer experience on mobile phones are slowly coming to an end. Already consumers with smart phones running Windows Mobile can download the Skype client, even if the operator forbids it.
"At the end of the day, bits are bits in the Internet," said Dave Passmore, a research director at the Burton Group. "So Verizon or anyone else who wants to tell someone they can't download a VoIP client onto their phone from the Internet is going to have a very hard time enforcing it."