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...

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.

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.

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.

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.

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.

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.

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?

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.

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?