Speakeasy The Latest VoIP Provider To Block Certain Calls

from the this-is-going-to-get-messy dept

A few weeks back, we noted that VoIP provider MagicJack had begun blocking calls to certain numbers it didn't like -- specifically free conference numbers that were using a regulatory arbitrage loophole that required the networks of incoming calls to certain rural telcos to pay huge connection fees, creating incentives for those telcos to develop cheap or free services that brought in lots of calls. Then, a few weeks ago, it came out that Google was blocking similar calls via its Google Voice offering. I still believe that offering a telephone service that connects to POTS requires that you complete all non-fee-based (i.e., 900 number) calls, according to an FCC order in 2007 on this particular subject. Google and MagicJack disagree.

However, with more and more people switching to VoIP services, combined with more and more VoIP providers going down this route, it's becoming a big issue, quickly. Harold Feld notes that Speakeasy is the latest VoIP provider to go down this route, blocking similar calls. To Speakeasy's credit, however, unlike both MagicJack and Google, it at least clearly alerted customers to this change, and also publicly lists out the blocked numbers. It's amazing that Google and MagicJack did not do either of these things.

Still, as Feld notes, this is becoming a big deal. It's likely that more and more VoIP providers are going to quickly go down this same path, and the phone system will start to splinter. This is bad. For a phone system to work, you shouldn't have a situation where the service you use can arbitrarily refuse to complete certain phone calls. The real answer is to get rid of the arbitrage loopholes. The rural telcos are clearly abusing the rules. Yes, this could seriously curtail various free conference calling solutions, but that's better than the alternative.

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Clearwire Supports Net Neutrality? Does No One Remember Its History?

from the that's-funny... dept

How quickly people forget. With the FCC's announcement about support for net neutrality legislation the PR and lobbying machines of the major telco and cable providers have cranked up, putting out all sorts of fear mongering letters and reports about the damage such a law will do. There was one interesting exception. Some noticed that wireless broadband provider Clearwire appeared to support the FCC's position (though, I'd argue that the statement's wording is a bit vague). While the article at Moconews suggests this "isn't surprising," I'm wondering how everyone seems to have forgotten that Clearwire, in the past, was one of the most aggressive broadband providers to support a non neutral network. A few years back, it was blocking VoIP and streaming media and proudly promised to block any type of traffic or application it didn't like. It also tried to get VoIP providers to get "certified" before promising they could work on Clearwire's network. Of course, plenty can change in a few years, but it's quite noteworthy that Clearwire may have changed its tune on net neutrality entirely.

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Skype Tech Licensing Soap Opera Continues: Founders Sue eBay, New Buyers For Copyright Infringement

from the someone-screwed-up-big-time dept

Over the summer, we wrote about the bizarre and protracted legal dispute concerning whether or not eBay actually had the rights to the core technology in Skype. Skype's founders, Janus Friis and Niklas Zennstrom, claim that they retained the right to the core technology in a separate company called Joltid, and that they terminated eBay's license to that technology. There's a legal battle already underway about that, but apparently that's not enough, as Joltid has now filed a separate copyright infringement lawsuit against eBay and the list of investors who recently bought out a big chunk of Skype from eBay. The thing that still amazes me is that pretty much everyone realized right away that it made no sense for eBay to buy Skype. That was a bad idea from the very beginning. But finding out that the purchase price didn't even include the core technology, and that Joltid had the ability to revoke the license, makes the purchase almost monumentally bad.

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Skype Founders Claim eBay No Longer Has A Right To Skype's Core Tech

from the this-is-going-to-get-messy dept

As you know, eBay bought Skype for a ton of money a few years back, without having any real plan for what to do with it. There were no synergies between the two, and about the best that can be said for eBay's ownership of Skype is that they didn't kill it (though, frankly, the new UI is so bad, it makes me wonder what they were thinking) and let it continue to grow organically. Earlier this year, eBay finally announced plans to spin off Skype. Fair enough. It can probably do a lot more outside of eBay than from within. However, it turns out that there may be a bit of a legal hitch, as Skype's founders claim that eBay/Skype no longer have the legal rights to Skype's underlying technology. Apparently, the claim is that Niklas Zennstrom and Janus Friis and a separate company they ran, Joltid, only licensed the underlying technology to eBay/Skype for a limited time -- and that deal has now concluded. The two companies are scheduled to fight this out in court.

There are a few interesting asides to all of this. First, it reminds me of how Zennstrom and Friis ended up in another lawsuit a few years back, also involving questions about licensing the core underlying technology of Skype. There's a lot of background here, and not all the details are clear (at all), but that original case involved the claim that Zennstrom and Friis used the same core underlying technology that they used to build Kazaa to build Skype. Way back, Zennstrom and Friis had created two operations: Kazaa and FastTrack, which created the underlying tech used in Kazaa. However, they also licensed FastTrack to a company called Streamcast, that made a product called Morpheus that competed with Kazaa in the file sharing space. Got that?

The folks at Streamcast insist that part of their contract with FastTrack was that they had a right of first refusal on buying the underlying technology. But then, all sorts of stuff happened, with Kazaa being sold off to a group in the South Pacific, but Zennstrom and Friis supposedly retaining some core technology which (Streamcast claims) they used to build Skype. Then, once Skype sold, Streamcast claimed that the whole thing was an elaborate shell game, but in selling the Skype underlying technology, Streamcast claimed that Zennstrom and Friis violated their agreement on having a right of first refusal on purchasing the technology.

Yet, now I'm left wondering if that original claim was true. If the current claim is that Joltid still "owns" the original technology and Skype/eBay only licensed it, then the technology itself might never have actually been sold (unless, we're talking about two separate core underlying technologies... which is possible).

Still... the bigger question? How the hell did eBay make a deal and not make sure it had either purchased (entirely) the core underlying technology or had a guaranteed perpetual license that couldn't be revoked? The eBay Skype purchase was bad enough already. Could it be even more ridiculous in that eBay didn't even properly purchase the technology in question? It seems preposterous to believe that a company could screw up an acquisition that monumentally, so you have to wonder if it's actually true.

In the meantime, since there are questions about how eBay can rebuild Skype's underlying core technology without violating the many patents in the space, it makes you wonder if eBay may be forced to simply buy someone else's technology. Maybe it's time to call up the Gizmo Project (which has built a very Skype-like product) to see what they're up to these days. Though, can you imagine eBay needing to buy another company just to power Skype so it can be spun off again? Yikes!

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Russian Telcos: Skype Is Hurting Our Business And Must Be Stopped

from the not-very-subtle dept

Usually, these days, when companies beg the gov't for protectionist policies against upstart competitors, they at least work out a convoluted story about some sort of real harm (i.e., beyond the bottom line of those asking for protection) caused by the upstart. So, you get the record companies claiming that music will stop being made, or perhaps food companies complaining about the safety standards of foreign food products. There may even be some truth to those stories (or not), but the real reason is to avoid competition. Over in Russia, for example, it appears that a bunch of telco execs are complaining about Skype. They at least try to pass off a plausible non-save-our-asses reason: mentioning security, but they don't do a very good job hiding the truth. Repeatedly they seem to plead that Skype is evil because it makes it difficult for the old guard telcos to charge super high fees. Competition is such a pain sometimes...

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People Will Pay For VoIP Because It's In A Game?

from the something-for-nothing dept

There are plenty of places for people to make free VoIP calls through their PCs these days, while the cost of phone-based VoIP service keeps falling towards zero. Given this, it's a little surprising to see the companies behind some online video games and virtual worlds planning to start charging users to make in-game or in-world calls to other players and users. Apparently Second Life, Everquest and Star Wars Galaxies will soon feature paid calling plans, with the last two even letting "users talk with friends, no matter what Sony game they're playing." Wow, that's a great feature -- and one all those existing VoIP services already have, with the added benefit that they work when their friends aren't playing Sony games, too. So it's hard to imagine the benefits of integrated VoIP calls will justify their use over any of the free solutions for very many users. This sounds somewhat similar to the sort of thinking that was being tossed out by eBay when it bought Skype, talking about all the "synergies" between voice calls and eBay sales, and how the calls would be a huge boon to the company's bottom line. Those synergies, of course, never materialized for eBay. It seems likely they won't materialize for game and virtual world companies, either.

Carlo Longino is an expert at the Insight Community. To get insight and analysis from Carlo Longino and other experts on challenges your company faces, click here.

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Court Says VoIP Is Not A Telco Service; States Can't Tax It As One

from the just-say-no-to-usf dept

In recent years, various state regulators, desperate to dredge up extra tax income, have targeted VoIP providers, using the infamous "like a duck" test, to say that since they look like a traditional telephone service, they need to pay taxes like one -- despite the fact that they don't make use of the same infrastructure (which is part of the reason why telco services were taxed in the first place). A couple years ago, an appeals court rejected this theory in Minnesota, and now an appeals court has come to the same conclusion in Nebraska, stating that VoIP services, such as Vonage, are not telecom service providers, and thus are not responsible for taxes such as the Universal Service Fund. Of course, this also contradicts some other rulings... so perhaps we'll eventually see this in the Supreme Court as well.

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Want To Get Out Of Your iPhone Contract on T-Mobile Germany? Easy, Just Use Skype

from the verboten dept

Skype has gotten some press this week after it announced the availability of a an iPhone client for its service (except in Canada, though, thanks to patent issues). The application only works over WiFi, though, and not the cellular data network. Operators typically say these restrictions are in order to prevent the use of massive amounts of bandwidth and harm network performance for other users; what seems more likely is they're worried that Skype will "steal voice minutes" away from their network. That's a silly belief though, because when users are already paying for a big bundle of minutes, and have unlimited off-peak minutes, and so on, it's not very likely they'll go to the trouble of using Skype for most calls. Perhaps the only ones they'd use such an application for are for calls they weren't going to make through the operator's network anyway -- such as international calls, for which they'd use a cheaper landline, a calling card, or wait until they're in front of a PC. Blocking Skype from working over the mobile network only hurts the operators by putting up a barrier in front of customers, it really doesn't protect any revenues. But no matter, the blocking -- or worse -- goes on. In Germany, where Skype is the top download from the App Store, T-Mobile (the operator which sells the iPhone there) is threatening to terminate the contracts of customers who use Skype on their iPhones, because the contracts prohibit the use of VoIP services. That's a nice touch: play by our rules, or you'll no longer have the privilege of giving us your money. You know, that doesn't sound so bad, because then users are free to take their business elsewhere. Although, as Skype's general counsel points out, every other mobile operator in Germany also bans VoIP.

Carlo Longino is an expert at the Insight Community. To get insight and analysis from Carlo Longino and other experts on challenges your company faces, click here.

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Things That Won't Get Your Company Through The Recession: Limited, Hard To Use Free VoIP

from the well-trod-path-of-failure dept

The price of voice calling has long been moving towards zero, making the "cheap phone calls" business model a fairly unattractive one. But, as Om Malik points out, that doesn't stop VoIP startups from traveling down the same path as previous failures by trying to use "free calling" offerings to build a business. The latest is a company called Jaxtr, which is touting a service that allows its users to call each other for free (how original!). But it's not so straightforward: in addition to both people on a call having to be Jaxtr members, the service gives each of them a special local number to call to reach the other person. So instead of just dialing, or clicking on a user in a buddy list, this is the process:

Jaxtr members simply enter the number of the jaxtr member they wish to call. Jaxtr will then give them a local number to reach that person. Once they initiate the call, jaxtr notifies the person they are calling, and will give that person a local number to call, too -- allowing the parties to connect directly. They can then talk for as long as they like, free of any charge from jaxtr. These assigned local phone numbers can also be used again by the same parties on an ongoing basis.

Two points: it still requires members to have their own phone service and make a local call, and, as Om notes, it's the same kludgy approach that's been tried before by other VoIP companies, with little success. Prices of voice calls are falling across the board, making the inconvenience of systems like this a huge barrier for users to overcome when compared to direct-dialing or other voice-calling or voice-chat services. But Om hits the nail on the head when he asks how VoIP companies can make money from free calls. Jaxtr says its plan is to convert free users to paid customers; they should check out how that's fared so far for Skype, even with its tens of millions of users.

Carlo Longino is an expert at the Insight Community. To get insight and analysis from Carlo Longino and other experts on challenges your company faces, click here.

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Verizon Gets Smacked Down For Its VoIP Patent Suing Spree

from the so-much-for-whacking-cable-competitors dept

Verizon was one of the last players to the VoIP party. Cable companies had been offering VoIP for years, and then Vonage, AT&T and a variety of other startups really built the market before Verizon even bothered to enter the space with an overpriced, uninspiring "me too" product that the market made clear it didn't want. Yet, somehow, Verizon was able to get some patents on the technology, despite a ton of rather clear prior art that showed Verizon's patents should never have been granted.

So, with those patents, Verizon began suing -- and it started with the lame duck in the VoIP space: Vonage. The company has been struggling for a variety of reasons, and a bunch of patent holders swept in to sue the firm that actually made VoIP a viable product in the market. Vonage came under massive pressure from shareholders to get rid of these lawsuits, so it settled rather than deal with a lengthy court room battle.

Verizon interpreted this as a validation of its patents and set off to find others to sue. Its next target was Cox Cable for its digital telephony solution. The plan was clear. After beating Cox, it would turn its legal guns on the big boys like Comcast and Time Warner. Except, it appears the courts have tossed a wrench into those plans by siding with Cox in pointing out that the company doesn't violate Verizon's patents. While Verizon will most likely appeal, this should be seen as a pretty big win for Time Warner Cable and Comcast, who may not even have to defend themselves against Verizon's questionable patent claims at all.

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German Court Bans VoIP On The iPhone; Says It's Unfair

from the felony-interference-with-a-business-model dept

We've pointed to a bunch of stories that involved Apple somewhat arbitrarily forbidding or banning iPhone apps, but now it appears that the courts are getting in on the game as well. A German court has banned a VoIP iPhone app after T-Mobile, the mobile operator who offers the iPhone in Germany, complained. The court says that this VoIP app "makes use of unfair business practices," though it's difficult to see how. VoIP is a perfectly acceptable application, so why is it unfair? The court's explanation here seems a bit stretched as well. Apparently, the only way to run this particular VoIP app is on a jailbroken iPhone, and T-Mobile's contract forbids jailbreaking the phone. Of course, if that's true, isn't it an issue between T-Mobile and its customers who broke the contract? Why should the app maker be blamed? All it did was build a useful app? This seems like yet another case where a company is arguing that interference with a business model should be illegal.

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Voice Is Data: Tech Won't Be Able To Stop VoIP In The Air

from the of-course-not dept

With increasing attempts to turn internet access on in the sky, there's been some concern about people making VoIP calls from airplanes, just as there is a concern over mobile phone use in the sky being too "annoying." Some of the companies providing internet-in-the-sky have claimed that they would block VoIP calls, but that's going to be pretty difficult. As we've pointed out in the past voice is just data and you can always find a way to disguise the data, such that it won't be blocked. And, indeed, that seems to be exactly what's happening. Andy Abramson talks about how he got around AirCell's VoIP blocking when talking to a friend who was on one of these wired airplanes. There's always going to be away around those things, so unless Congress really decides to ban all voice calls on phones, why not wait and see if people chatting really is a problem?

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Forget Credit Cards, Scammers Now Want Your VoIP Accounts?

from the worth-more-money dept

Last month, we pointed out that the market for stolen credit card data was so saturated that prices were falling. Of course, that just inspired scammers to go looking for other types of data that was a bit harder to find: VoIP accounts. According to the BBC, scammers selling VoIP account info are now able to get higher prices than those selling credit card data. Of course, it's not at all clear how widespread this really is. The info seems to be coming from a company trying to sell a solution to deal with this -- which already makes it somewhat suspect. Also, you have to wonder how valuable VoIP account data really can be compared to credit card numbers which have much wider applicability. Either way, it will be interesting to see how the market deals with the "glut" of credit card data out there, and where else data scammers turn.

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Will Self-Control Work For In-Flight Internet Access?

from the are-people-trustworthy? dept

With in-flight internet access getting closer and closer to reality for many airlines, there are still plenty of questions about etiquette and acceptable behaviors. Some airlines are purposely setting up content filters and blocking the use of VoIP (as much as possible, since it's possible to get around most blocks), but as Broadband Reports points out, some believe that people will self-regulate, in most cases. People surfing porn at open WiFi hotspots hasn't been a huge issue, because people know that others are around and so they have enough self-control. The same should be true on airplanes. And while we all know people who are oblivious to how rude it is to hold a loud mobile phone conversation in public, a few reminders and social cues may be enough to keep that from being a serious problem in the air. There will be exceptions -- but is trying to eliminate those few exceptions worth having a near total ban on certain activities?

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Chinese Going Off The Official Telco System To Call Taiwan

from the time-for-the-great-voice-firewall dept

Paul Kedrosky points us to the news that, for the first time in 11 years, the "official" volume of phone calls from China to Taiwan has dropped rather significantly. Both the Digitimes report and Kedrosky suspect (reasonably) that this shows how many Chinese are jumping to use services like Skype to make these calls. Skype has long had a popular following in China, so this shouldn't be a huge surprise -- but it does make you wonder if the Chinese government will follow the path of various countries like Bangladesh, Belarus, Namibia and Jordan in banning Skype. We've already seen some experiments in China with blocking or banning certain types of calls. If the government feels that too many people are using these services, don't be surprised to see a wider ban enacted.

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Net2Phone Jumps Into The VoIP Patent Lawsuit Business: Sues Skype

from the everyone's-doing-it dept

In the last year, we've witnessed plenty of companies dig up VoIP patents with which to sue market innovator Vonage. Verizon, AT&T, Sprint and Nortel all were able to get Vonage to cough up some money, rather than continue to fight some questionable patents. The fact that there are so many overlapping patents, is exactly the "patent thicket" problem that our current patent system encourages. Of course, there are always more patents to choose from, and it appears that Net2Phone has dug out an old patent and decided not to sue Vonage, but to go after Skype instead. Unfortunately, there's very little in the way of detail. The ZDNet post just claims it happened, but doesn't give any details about the actual lawsuit (even where it's been filed). Also, the writer seems amazed that it's based on a patent filed in 2000, even though it's common enough to see old patents used in patent lawsuits. In this case, it's absolutely true that Net2Phone was an early pioneer in the VoIP space, but saw its business eclipsed when it had trouble coming up with a product people actually wanted to use (and then watched as providers like Skype passed them by). If anything, this seems like yet another example of those who lost in the marketplace punishing those who innovated better. Skype came up with a good product that people wanted to use. Net2Phone did not. It's hard to see why Skype should be punished for doing a better job serving the market.

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German Government Struggles To Tap Encrypted Skype Calls

from the crypto-works dept

The Wikileaks project is starting to bear fruit, with documents leaked to the site beginning to get a lot of attention. The latest example is correspondence between the German government and a vendor (via Slashdot) that apparently makes software for intercepting Skype calls. Interestingly, the interception technology appears to be pretty primitive and rather expensive. The software has to be installed on the Skype client, and the vendor suggests that this can be accomplished by attaching a trojan to an e-mail or physically entering the premises to install the software on the target machine. And, evidently, only Windows 2000 and XP are supported; Vista support is still in the works. The company charges thousands of euros per target computer. This suggests that Skype's encryption technology is secure against at least the eavesdropping techniques available to the German government. Apparently they haven't found a way to decode encrypted Skype traffic off the wire, so they're forced to resort to these fairly cumbersome attacks on Skype clients -- attacks that are no more convenient for law enforcement than simply bugging the target's office. That suggests that the risk of comprehensive government surveillance of online telephony is still a fair ways off. If you encrypt your online activities, they're probably pretty secure. Of course, it's entirely possible that other government agencies, such as the NSA, have more sophisticated eavesdropping technology that they haven't shared with the Germans. My guess is that any government agencies possessing really sophisticated eavesdropping tools are also less likely to have their private documents show up on Wikileaks.

Timothy Lee is an expert at the Insight Community. To get insight and analysis from Timothy Lee and other experts on challenges your company faces, click here.

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Sprint Shoots For Patent Litigation Rather Than Innovation

from the not-this-again dept

We've noticed a certain pattern among tech companies once they run into business problems. Rather than figuring out how to improve their product by innovating, they resort to patent litigation. It's an all too common practice, unfortunately -- and can be a sign of how strongly a company believes in its own ability to actually innovate. Perhaps the latest to follow this unfortunate trend is Sprint. Sprint is clearly facing a number of problems in its effort to innovate out of trouble, so it probably will come as no surprise that it's now going after a bunch of small companies for patent infringement, concerning the same VoIP patents it used to squeeze money out of Vonage. Just as Verizon did with its Vonage patent windfall, Sprint has decided to turn around and sue more companies. Though, unlike Verizon, Sprint is focusing on smaller players who probably have even fewer resources to defend themselves, making them more likely to quickly settle, rather than deal with the cost and uncertainty of a lengthy patent lawsuit.

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Will VoIP Finally Get Hacked?

from the we-shall-see... dept

Ever since VoIP first came on the scene, there were fear mongering reports saying that you shouldn't use VoIP because it will get hacked. However, in all these years, we've yet to hear a serious report of VoIP getting hacked -- and, even the scary warnings about VoIP hackers have quieted down. Yet, here we are, with a security company now claiming that 2008 will be the year that VoIP gets hacked. Of course, that security company is also selling a solution to prevent VoIP systems from getting hacked, so perhaps you should take the prediction with a rather large grain of salt. So which is it: is hacking VoIP networks not that easy? Is the fear overblown? Or have we just been lucky?

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Drunk Off Patent Success Against Vonage, Verizon Moves On To Cox

from the who's-next dept

Having successfully sued Vonage over VoIP patents, despite an inferior product and plenty of prior art, it appears that Verizon is seeing who else it can sue for VoIP patent infringement. First on the list is cable provider Cox, who offers VoIP to its customers, just like most cable providers these days. A successful lawsuit against Cox would almost definitely mean additional lawsuits against all the other cable providers, who have also been much more successful than Verizon in actually offering a VoIP service that customers find useful. Of course, in this day and age, it seems that rather than improve the product, the answer is to sue everyone else for patent infringement. Just like the Founding Fathers intended.

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