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VoIP Central to FCC Wireless Inquiries Under Obama

It's clear that the FCC's emphasis has changed dramatically under President Obama. Most notably, the agency has become a lot more serious about increasing openness and competition in the telecommunications industry. One part of its effort is a strong push for network neutrality in general – that is, for mandating that Internet providers treat all traffic equally, to legally prevent them from blocking or degrading services that compete with theirs. Another part is a focus on the mobile communications business in particular. VoIP will be central to that part of the effort.

The agency's involvement in the recent dustup among Apple, AT&T and Google is a good example. Officials wanted to know why the iPhone App Store rejected Google Voice, an application that would give users an alternative way to route their calls. Rather than traveling end-to-end over AT&T circuits, calls would traverse the cellular voice network only to a Google Voice gateway. From there, they would travel over a VoIP network, bypassing the carrier's expensive long-distance circuits.

Although the service would still use up subscribers' cellular minutes, it would significantly undercut AT&T's rates for international calls. That would be a big deal for AT&T and its customers alike, since international calls from cellular phones are among the most expensive – and, for operators, profitable – anywhere.

The rejection of Google Voice for iPhone seemed to indicate a refusal to allow any applications that competed with AT&T. As a result, the FCC asked everyone involved to explain in writing what was going on. Their responses indicated that all wasn't (according to Apple) as it seemed. Rather than rejecting the Google Voice application, the iPhone maker said, it was still studying it. And its doubts had nothing to do with the service competing with AT&T, but rather with the way the app violated the iPhones's strict user interface rules.

That may have been true, but other App Store rules do prevent VoIP services from competing with cellular carriers'. The main one is a prohibition on VoIP services that send calls to and from the handset over the cellular data connection rather than cellular voice links. But it looks like the FCC is wading into that one too. As part of its Google Voice/iPhone investigation, it put Google itself on the spot by asking about its reported prohibition of Skype on Android, the Google-developed mobile phone operating system.

The report, which appeared USA Today, said that Android users could only use Skype Lite, an application that like the Google Voice iPhone app sent calls over cellular voice links to a VoIP gateway. That much was true, but the paper also claimed that Android users were prohibited from running Skype over the cellular data network. Google replied that while it was technically possible to block such applications at carriers' request, in reality no such Skype application was available, and thus there was no blocking going on.

>That leaves open the question of whether cellular carriers will in fact allow VoIP applications that run over data links. From the carriers' point of view, doing so has two near-fatal flaws. For one thing, it would put most of their revenues from airtime minutes at risk of disappearing. At the same time, it would put an additional burden on their expensive data networks. And whatever incremental data revenues it produced wouldn’t come close to making up for the lost voice minute revenues.

In short, allowing true mobile VoIP would mean allowing companies like Skype to use the carriers' own data networks to compete with, and thus drive down the price of, their voice services. Unsurprisingly, there's nothing they would like worse. On the other hand, it sounds like just the kind of increased competition that the Obama FCC has in mind.

So it should come as no surprise that, as VoIP blogger Andy Abramson noted, Google has reported that AT&T says it plans to take a "fresh look" at authorizing VoIP on the iPhone. It's actually a pretty smart thing to say to the agency that has the power to force them to do just that, even if the carrier is spending tens of millions lobbying to try to make sure it never happens.


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