iPhone Users Downloading Skype, Can't Always Use It

Around the world, iPhone users are flocking to Skype and finding different policies in different countries, ranging from wide open to highly restrictive. The middle ground is represented by the United States, where consumer advocacy organization Free Press is petitioning the FCC to encourage AT&T and Apple to loosen what it regards as overly restrictive use of Skype on AT&T's network.

A Free Press letter to the FCC cuts quickly to the chase: "The Skype voice over IP application on the Apple iPhone can make and receive calls over a Wi-Fi connection, but cannot make or receive calls over AT&T's 3G network," the letter states, complaining that AT&T's policy of restricting use of Skype on its 3G network goes against the commission's longstanding policies of net neutrality.

With six iPhone owners each second downloading Skype in the United States, the issue is quickly reaching a critical mass of subscribers. (Skype said more than 1 million Skype downloads were carried out in two days from the Apple App store.) Free Press lays the problem at the doorstep of AT&T and not at Apple. The letter, signed by policy director Ben Scott and policy counsel Chris Riley, suggests that "wireless carriers through restrictive language (control) consumers' use of applications and services."

However, AT&T, which has the exclusive right to market the iPhone in the United States, argues that it has "every right" not to promote the services of a competitor like Skype. In a USA Today report last week, AT&T policy executive Jim Cicconi said the carrier likewise expects Apple not to promote AT&T competitors.

The iPhone Skype policy is even tighter in Germany where Deutsche Telekom, which has exclusive rights to the iPhone, has said it will cancel the contracts of subscribers who attempt to install workarounds to use Skype.

On the other end of the Skype-iPhone controversy is Skype's experience with Hutchison 3, which has Skype contracts in Europe and Asia. In his blog, Skype representative Scott Durchslag noted that Hutchison has "sold more than 500,000 3 Skypephones, which have attracted new customers to their network, increased their average revenue per user, and kept customers for longer."

With mobile data plans booming at AT&T and other cell phone service providers, Skype argues that it helps attracts subscribers, with the net result being that carriers profit in the long run from Skype usage.

"In addition to partnerships with hardware manufacturers," Durchslag blogged, "we're talking with wireless carriers around the globe about ways that they can package Skype together with reasonably priced data plans and optimized devices in such a way to give consumers what they want, without cannibalizing their own voice calling revenues."

Durchslag also pointed to Skype's partnership with Nokia, which plans to build Skype into some Nseries smartphones.

Obviously the carriers aren't embracing the Skype program, particularly in Germany, but with regulatory agencies like the FCC and some European agencies preparing to examine the issue, the situation could change in the coming months.

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