Skype Deliberately Crippling Functionality of iPhone and WinMo and Verizon Apps?

from the New!-Improved!-Exclusive!-Broken! dept

There’s something anti-competitive afoot in the ‘VoIP over 3G’ space this year. Let me run you through a timeline, and see if you can’t spot the dirty pool:

  1. Skype has had a highly functional VoIP client for Windows Mobile devices for a few years. It allowed smartphone customers to use most features of Skype over WiFi OR a carrier’s cellular data network. It was distributed around the carriers direct to customers of Skype, and was designed for those customers’ benefit.
  2. March 2009: Skype on iPhone is launched, but is unable to do VoIP over the 3G data channel because AT&T and Apple blocked that functionality. Skype, Google, the FCC, and consumers cried "foul" at AT&T and Apple.
  3. Oct. 2009: After considerable FCC and consumer pressure, AT&T relents, and allows VoIP over 3G (and was even publicly applauded by Skype’s CEO Josh Silverman). Skype users, naturally, expect an updated Skype version that will leverage 3G data.
  4. Jan 16, 2010: Skype releases a new iPhone version which DOESN’T take advantage of the new leeway AT&T (and ostensibly Apple) allow for VoIP over 3G. Skype points fingers, mostly back at Apple.
  5. Jan 27, 2010: Apple removes any 3G VoIP restrictions. Now there is nothing holding Skype from doing VoIP over 3G on iPhone.
  6. Mid Feb, 2010: At MWC in Barcelona, Verizon and Skype announce a special version of the Skype app that will run on Verizon. While most press outlets rejoice at the "openness" Verizon wireless is finally showing,  it turns out to be a limited, crippled version, which is designed to fit Verizon’s agenda, NOT customer wishes. This version can use the 3G data network, but just for chat and ‘control’, not for voice. It requires a >$10/mo data plan, is not available for phones with Wi-Fi, and ‘Skype out’ cannot be used to make domestic phone calls. In this deal, it appears that VZW paid Skype for some exclusivity in the USA.
  7. Mid-Feb, 2010: Also at MWC, Skype CEO Silverman tells Om Malik that we can expect 3G VoIP on iPhone "Very soon", with no firm commitment.
  8. Feb. 26, 2010: Skype completely pulls it’s very functional Windows Mobile apps with little explanation, and no suggestion of when they might return. The app, which works fine, just goes away. Why pull the most functional Skype mobile app and leave only crippled versions?

Looking at the timeline above, it’s pretty easy to guess what’s going on here. Skype has been negotiating with Verizon Wireless for some exclusive deal in the USA. But unlike the relatively good, open Skype deal enjoyed by Hutch "3" subscribers in the UK, the Verizon version is crippled with confusing limitations, complications, conditions. It’s clear the Verizon goal is to use Skype to upsell data plans to users who don’t yet have one, and to drive or retain Minutes of Use of cellular voice traffic. Skype just sold its US mobile users down the river! Skype still promotes "Skype Mobile" on its US web pages, but if you click on any OS like Android or Blackberry, you’ll see the bold headline "Coming Soon: Skype on America’s most reliable wireless network." And are basically told to wait for the exclusive product.

The only reason Skype offered for retracting the WinMo app is "because we want to offer our new customers an improved mobile experience – much like the version that has proved so popular on the iPhone…" Wait…Is that the same version that annoyed users because it couldn’t do VoIP on 3G? And how does killing a product with no replacement offer an "improved mobile experience"? Seems like more of an absent mobile experience.

Going forward, this also could position Skype well for offering a premium paid version of a fully functional app at a future date, when exclusive deals expire. A freemium model would be less unsavory than the exclusive/crippled structure that we apparently have for now. At least with freemium, the free market can choose to pay or not from any given carrier. With the exclusive/crippled structure, customers have little choice – except the choice to use another VoIP provider who is focused on giving end users what they want.

The result of this exclusive deal is, essentially, to deprive an entire country of the value of a good VoIP service (Skype) on mobile phones, and instead to offer us a crippled version that is designed not to delight any user, but to delight a carrier. How ironic, then, that Skype’s Silverman has been at the forefront of the push for more "open" networks:

"Nonetheless, the positive actions of one company are no substitute for a government policy that protects openness and benefits consumers. We’re all looking forward to further developments that will let people use Skype on any device, on any network."

or when he said this from a September lobby trip to DC:

 "We have witnessed certain broadband providers unilaterally block access to phone calls delivered over data networks and implement technical measures that degrade the performance of peer-to-peer software distributing lawful content. And as many members of the Internet community and key congressional leaders have noted, there are compelling reasons to be concerned about the future of openness."

Compelling reasons, indeed. It seems that in this case, AT&T actually followed through with their promises to be more "open" while Skype and Verizon have just painted a big "open" sign on the gates of the walled garden. Enter at your own risk.

Filed Under: ,
Companies: skype, verizon

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Comments on “Skype Deliberately Crippling Functionality of iPhone and WinMo and Verizon Apps?”

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Marcus Carab (profile) says:

Maybe I’m missing some technical detail here, but… is there any reason why VOIP shouldn’t just work through your normal 3G data channels – other than the fact that “unlimited data” actually means “unlimited data provided you don’t use too much of it”? And if that’s the reason then isn’t that… well… total bullshit?

Derek Kerton (profile) says:

Re: Re:

Skype, and its carrier partners aren’t just offering a software app that looks for any available TCP/IP socket and uses it. The app is designed to NOT use the 3G, or to NOT use WiFi, depending on the version (iPhone can only use WiFi, the VZW app can only use 3G for voice).

In effect, the app is not connection agnostic, but prefers certain pipes over others. This is done in no way to benefit the user, but to meet the business models of the carriers and Skype. While this is not as anti-competitive as a non-neutral monopoly network, it is close enough to be sadly ironic.

Steve R. (profile) says:

Its the Governements Fault!

Actually this is an illustration to all those that claim that evil government regulations are to blame for frustrating technological advances. It is the companies themselves who are really responsible for retarding technological progress.

What does this imply for unregulated net-neutrality? Clearly these companies cannot be trusted to freely abide by net-neutrality concepts.

Modplan (profile) says:

We have witnessed certain broadband providers unilaterally block access to phone calls delivered over data networks and implement technical measures that degrade the performance of peer-to-peer software distributing lawful content. And as many members of the Internet community and key congressional leaders have noted, there are compelling reasons to be concerned about the future of openness.

They can’t seriously be saying that as the runners of a proprietary VOIP network which is part of what has allowed this crappyness to come about in the first place.

It’s all gone downhill for openness in net communication since email.

Josh (profile) says:

Who cares about Skype?

Skype is a proprietary VoIP network, and just like all the telcos they wants to make a buck. Instead of complaining people need to look into maybe building some kind of P2P VoIP network.

What are the bright minds in the open source community doing to help bring this about? Are their projects like this already that we just haven’t heard of.

Not everyone wants to or needs to embrace this openness allowed by the removal of these restrictions, but I’m sure we can find some intelligent people who can work something out.

Derek Kerton (profile) says:

Re: Who cares about Skype?

You are right that Skype is not a monopoly, and is a private company that should be free to make the choices I wrote about in the article.

However, I don’t suggest we need to sue Skype or regulate Skype. I merely suggest that some people might want to seek out alternatives that aren’t trying to manipulate our use.

They are absolutely within their rights, but so are customers who choose alternatives. That’s how the market should work.

You asked about open standards, here’s one:

JackSombra (profile) says:

UK deal

“But unlike the relatively good, open Skype deal enjoyed by Hutch “3” subscribers in the UK”
Got any info on this “deal” ?

Because after playing around with my nokia 3 mobile phone this weekend discovered something interesting, the “skype client” on 3 is not actually a skype client but rather a iskoot client (even though it puts skype logo’s everywhere to make it look like a skype client) that hooks into the “skype network”.

And same as the verizon situation it only uses the 3G network for chat and control, voice is handled via the normal telephone network, basiclly all skype incoming and outgoing call’s are routed via a 3 mobile number and from there passed to skype voip network via iskoot software (though this system is actually pretty good, even if you have poor 3G reception, the call quality is still perfect as long as normal cell signal is good) and multiple features of the normal mobile skype client are disabled, like skype msg to SMS.

Derek Kerton (profile) says:

Re: UK deal

Yes. It turns out that the original 3G networks had bad latency for carrying VoIP. The iSkoot solution uses the cel network as you say to channel the call from the phone to a gateway using voice channel, then from that gateway into Skype.

The key is around availability, limitations, billing, and pricing. The Verizon service is only available on their smartphones in which they previously crippled out the wifi, it is limited in that you cannot may a Skype call to the USA, it is tied to increased billing for a minimum data plan (which it barely uses).

But you may be right. The Hutch version also appears somewhat limited, but not to the extent of ours over on this side of the pond.

Anonymous Coward says:

Perhaps Skype wants to get phone manufacturers to integrate Skype into their phones. Back in November Nokia released their N900 (running Maemo Linux, not Symbian), which has Skype integrated into the phone application, and it completely ignores what network it’s being used on. That said, the N900 in the USA is only sold as an unlocked phone. Could this be that Skype is sick of dealing with carriers, which have a say in what goes on their locked phones? That doesn’t explain the WinMo thing though. Can anyone comment as to the UI usability of the old winmo apps?

The Infamous Joe (profile) says:

What I don't get

You would think Verizon would be *all over* VOIP, or maybe I don’t understand how it works.

You know all those (millions and millions) of AT&T commercials that play up the fact that you can talk and surf at the same time? If Verizon treated voice as Data, wouldn’t I be able to surf and talk at the same time?

Maybe I’m missing something.

mjb5406 (profile) says:

Re: Anti-competitive?

No question that Verizon can control its own network… but to ink a deal that specifically states that Skype cannot create clients for any other carriers’ phones? That’s the anti-competitive nature. It’s totally different than the iPhone which is hardware-unique, but if Verizon gets an Android app for its Droid series phones, there should be nothing stopping ANY Android user from getting it. It’s also very different because Skype already had a WinMo client in place, and announced full-feature clients for iPhone and Android and has now pulled the plug (Skype Lite is even gone from Android Market). Is this because Skype needs money after being spun off by eBay? Probably. Is this the way to do it, by pissing off a huge community of users? Probably not.

Derek Kerton (profile) says:

Re: Re: Anti-competitive?

Right. That’s what I was getting at. Those two companies working together to make a limited version is their own choice. But then to pull, exclude, and retract all the better versions starts to stink.

But as I said, VoIP IS a competitive market, and there are many options, as the commenters in this thread have indicated.

Ian (profile) says:

I do not think that word means what you think it means

@17 carriers shouldn’t be allowed to block any port they want? They own all those ports so….

@18 Skype is free to NOT sign a deal with a carrier that requires an exclusive; what you are describing is actually “competitive”

@19 Two companies deciding to raise prices is not “anti-competitive,” it’s “competitive.” “Anti-competition” requires government intervention into free markets, and I see none of that here. Skype and Verizon are in business to make money; If you feel screwed by their plans, then start your own carrier.

Ted T. (profile) says:

Skype over 3G will come with iPhone OS 3.2

No offense, Mr. Kerton, but did you google before writing this drivel? The coming (presumably by April 3, in time for the iPad launch) iPhone OS 3.2 SDK/API has explicit support for VOIP over 3G. That’s when Skype will launch their Skype over 3G iPhone client.

How hard was that?

Derek Kerton (profile) says:

Re: Skype over 3G will come with iPhone OS 3.2

That’s funny! I clicked the Google search you offered, and most of what I saw was a bunch of angst from people regarding how Skype over 3G is a mess.

There was this, which I think you are getting at:

But if you read that post, I think you see a February 3 perspective, before the Verizon deal. Heck, back in September, Skype was the champion of open networks and equal access to all content and services. Things can change.

Let me put it this way. There is nothing in that article, or anywhere, that promises the Skype over 3G functionality by any date. I think it may be delayed or offered in some new crippled fashion. Or on limited devices.

I’m already well-aware of the “promise” of Skype over 3G. I’m just skeptical of the will to execute, given recent developments. Shall I prove it? Read the article, and specifically bullet #6. How hard was that?

Free Voice Kills says:

Should MegaCarrier just shut down?

Everyone here is upset they cannot buy Verizon’s/ATT’s/T-Mobile’s/Sprint’s cheapest plan (10 minutes per month for $10!) and rack up 1900 minutes of talk time on Skype VoIP app?

You really think that the phone companies will continue to build out their networks if you (and the rest of the U.S.) buys the $10/month plan and yacks away unlimited?

Then you complain when the MegaCo phone company says “either you STOP this bull-cookie behaviour or we STOP building our WiMAX towers, fiber expansions, data routing/caching/storage Internal Network Upgrades!!”

Sounds like “whaaaa, I can’t get it for free!”. It costs a great deal of money to build out the VoIP and wireless infrastructure that you want to pay $10/month to ride.

VoIP kills the cell phone price model. Cool. Enjoy the rush for the next 18 months. The phone companies response will be to kill (or THROTTLE) data and ports to anyone not on their new $60/month data plan.

So you can get a cheap Voice ride now on the $20/month data-plan, but expect as Skype takes off, the data plans will go up to $60/month to cover the massive losses in your new “I’ve found a way to beat the cell phone company!” game.

To quote a talking head from a dying, legacy industry, “And that’s the Way it Was”.

Derek Kerton (profile) says:

Re: Should MegaCarrier just shut down?

Well, you’re railing against the wrong Techdirt writer. I’m the one here who argues non-stop IN FAVOR of tiered pricing, throughput caps, etc. I believe firmly in increased pay for increased use.

However, not one part of that argument (which you espouse above) serves as an excuse for taking a good product, crippling it, and trying to FOOL your customers into thinking it is something it is not.

If you don’t sack up and offer VoIP, then don’t try to trick your subscribers into thinking you are. And don’t “salt the fields” of the market with exclusives that prevent other players in the market from offering a good version of Skype.

BTW, I’m not lashing out at Verizon primarily in this article. If you didn’t notice, I save most of the invective for the “Free service” company that turned their coat inside out and sold out. Lobby congress for openness, and then cripple your product as part of an exclusive from one carrier? Bah!

I want these companies to do straight dealing, tell the truth, and be forced by the market pressure to build products that the market wants. We need an informed market for that to occur. Hence, my article.

If you interpret that as “whaaaa, I can’t get it for free!”, then that’s just a comprehension fail.

Wouter says:

Proprietary format

If people would care more about their freedom and think twice about the dangers and limitations of proprietary formats, there would have been better – as in more open – options to choose from and the whole Voip thing wouldn’t depend on one company with extensive self-interest instead of thinking about users and the technology itself…

Plus, cell-phone carriers as well as cable companies and other telecommunication sector businesses should be regulated more tightly since they have too much power to either restrict or overcharge for new technologies for the sake of their own vested interests. Free market ideology doesn’t seem to work well in the telecommunication sector, with in many places virtually complete monopolies and conflicting interests…

Dana Nutter (profile) says:

The new age of greed just keeps getting greedier

There’s been a disturbing trend in business over the past 15-20 years where companies no longer want to provide good service at fair prices, but instead try to hype of the value of what little they do provide to extract obscene prices, now it’s getting worse as products are being engineered by monopolistic companies to force consumers into having to pay for these these services instead of using cheaper services. The only way to stop this is for a consumer revolt. No matter how nice these products are, WE NEED TO JUST STOP BUYING THEM UNTIL THEY GIVE US OPEN PRODUCTS THAT LEAVE US FREE TO CHOOSE HOW *WE* WANT TO USE THEM! The telecom and media companies are the greediest of the greedy. How I use my data connection should be of no concern to telecom companies, and crippling that connection is only going to push me away. I wouldn’t mind having an IPhone, but refuse to buy something where I’m forced to use a single carrier (especially a carrier that doesn’t have a good signal where I live). Instead I have an ITouch but find out I can’t tether it via Bluetooth to my existing phone for data access. This too is obviously a feature that was intentionally left out to fuel the greed of these corporations, namely AT&T who gains from their IPhone exclusivity at the expense of non-customers as well as customers.

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