FCC Handcuffs U.S. Consumers and Business Again

Jim Courtney is a Contributor to Skype Journal, resident in Canada, who has worked most of his career as the Canadian Country Manager for U.S.-based technology companies and spent two years working at the headquarters for one in California at the time the Internet went commercial in the mid-90’s.

Having been trained as an engineer, scientist and business person, I have always been amazed at how the U.S., the self-assumed leader of free enterprise and democracy, seems to want to stifle their own economy and ecosystem for innovation through its government’s ongoing support of special interests whose business models are challenged by technological innovation and breakthroughs.

There is an ongoing debate over H1-B visas, so Microsoft decides to set up a research facility in Vancouver, B.C. to be able to hire a sufficient number of skilled personnel needed to support its various activities. Richard Florida, who recently moved from the U.S. to take up an appointment in the business school at my alma mater (U. Toronto), writes about the global competition for talent in The Flight of the Creative Class. His three T’s of economic development – technology, talent and tolerance – lead to his concern for long-term prosperity, development and innovation in the U.S. From the book’s flap:

But the United States still boasts one of the most diverse and creative citizenries in the world, and Florida points out that, if it can discover solutions to address rising inequality, the global dissemination of talent and the inherent tensions of the creative age, it will once again lead the pack. If only the rest of the world doesn’t discover those solutions first….

Once again the U.S. is shooting itself in the foot. FCC Chair Kevin Martin told an audience at the CTIA Wireless Convention in Las Vegas yesterday that he was dismissing the Skype petition for net equality that would force operators to connect any lawful device to the telephone network provided it doesn’t do harm to the network. This is one more stifling government decision in a world where Japan, Korea and Europe are providing the infrastructure that has allowed open competition, an infrastructure that separates the pipes from the content – Stockholm is a prime example – and an infrastructure that clearly provides much lower cost and higher participation communications activity for both the consumer and business.

This decision demonstrates nothing more than a failure on the part of politicians and government mandarins to understand and comprehend the technology infrastructure available to enhance business processes, to build effective hardware platforms, to take advantage of today’s more cost effective rapid software development tools. It portends for a less competitive U.S. that does not understand how the rest of the world is not only catching up with skills, technology infrastructure and opportunities for personal advancement but also in business management experience and business opportunities.

As for the impact on Skype’s presence on mobile platforms, there is nothing immediately affected. There are significant wireless data infrastructure issues to be addressed before there can be true VoIP over wireless along with a business model acceptable to carriers. Several vendors, such as iSkoot, IM+ for Skype, Fring and Mobivox, have found ways to access Skype via any carrier; they may not always have the full feature set but often having voice and chat is sufficient for the majority of conversations. In practice iSkoot has started to develop some carrier partnerships as they have found a way to bring both market advantages and cost savings to carriers using lessons from a SS7-type algorithm. Building on this algorithm they also provide a means to access Skype for those smartphone owners who are on carriers with whom iSkoot does not have a direct relationship. IM+ for Skype allows you to set up calls not only for your own mobile phone but also to have them sent to other phones such as an office phone. Mobivox simply provides access to Skype contacts from any phone handset with the help of VoxGirl and her speech recognition.

Furthermore over 80% of Skype users are outside the U.S. When a broader U.S. public starts to realize that they do not have the communications offerings found in Europe and the Far East, a movement will arise demanding change. It just may take a few years.

Finally, with the adoption and implementation of WiFi in homes and offices and the spread of dual mode GSM/WiFiphones, such as any WiFi-enabled Blackberry 8×20, there will be many ways to circumvent the carrier networks. Users again will start to ask about applications that they can run over WiFi networks but not carrier networks. When there is broad user demand for more openness the politicians will respond.

In my case, I am running on three smartphones over the Rogers network. None of these phones is sold by Rogers at this time (no, I have not succumbed to the unlocked iPhone craze); for $25 you can buy a SIM and set up a user account including a phone number.. Two of these devices also support WiFi. Since Rogers data plans are somewhat expensive, with no unrestricted plans available, I restrict major data activities, such as installing new applications, operating Qik.com and using SlingPlayer for mobile to when I am in a WiFi zone. iSkoot on my Blackberry 8820 is not a problem since the data component is largely text and the voice component goes out over the Rogers voice channel.

In the long term the Martin recommendation will limit hardware innovation; it will limit innovation in services and applications. It will put U.S. at a competitive disadvantage for both business and consumers. But will it also drive the carriers to invest in the infrastructure required to support and match the offerings, both services and applications, available in Europe and the Far East? Will it really encourage the carriers to really open up their systems through appropriate API’s and rewarding business relationships? Not fast enough when you have an oligopoly for wireless carriers. Should the U.S. (and Canada) actually be striving harder to end up in three to five years with an infrastructure based on the Stockholm model where users have fibre to the end point – effectively built as a regulated utility providing the "pipe", pay under $20 per month for unlimited very high speed data (100 Mbps) and have their choice of service providers?

Meanwhile – the best response for current users – go into guerilla warfare mode and demonstrate usage, real life experience and demand for these services and applications amongst your friends and business acquaintances:

  • demonstrate all the innovation that can arise out of developer partner programs, such as the Skype Developer Partner program, with several business applications in place and operational, and/or the iPhone with its SDK.
  • use iSkoot or IM+ for Skype to access your Skype and SkypeOut contacts from mobile devices such as Blackberry, Nokia and other smartphones
  • encourage the implementation and use of readily authenticated WiFi access points at your home, office and other frequently visited locations.
  • use applications such as SlingPlayer for Mobile and Qik.com on devices where it is supported and cost effective for the enduser.
  • show the carriers they are losing significant business.

If a broader base of users than simply "in-the-know" technical geeks start to experience these applications and services, awareness of the issues raised by the Skype petition will be spread virally … and we all agree that is the most effective marketing available. Change can be driven, if enough are aware of the issues and are ready to speak their voice.

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About Jim Courtney

Bringing over thirty years' experience in the sales, marketing and management of cutting edge technology businesses.
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