Happy birthday Skype! Why are we paying for voice?

04 Sep

skype-mobile-mainCan anyone remember a world before Skype? That’s what we lived in just 10 short years ago. It’s amazing how time flies, and how much one piece of software can change everything.

The beta version of the software, created by the same guys who developed the outlaw file-sharing service Kazaa, launched in late August, 2003. Just like Kazaa, Skype was a disruptive rebel – it sought to use the power of the internet to greatly lower the cost of something that people had typically been paying through the teeth for: long-distance calls.

It became immensely popular, incredibly fast, so much so that phone companies – both landline and wireless – started to sweat. All that lucrative long-distance revenue was vanishing faster than music industry sales. The difference was that, unlike sharing music files over Kazaa, millions of Skype users weren’t necessarily violating copyright. Skype was a perfectly legitimate alternative to phone companies. You can’t copyright voice conversations and then steal them, after all.

It’s amazing how much wireless companies in particular fought the inevitable tide. AT&T in particular pressured Apple to prevent developers from designing apps that allowed calls to be made over a wireless network, which ultimately hobbled Skype into being a wi-fi-only product on iPhones. Apple didn’t change the rules until 2010, after U.S. anti-trust authorities started sniffing around.

Incredibly, this is still an issue in some parts of the world. Skype is actually at the centre of a net neutrality debate currently taking place in Europe, where an estimated 236 million phone users can’t use the service properly because their wireless providers are blocking or degrading it. Meanwhile, in North America, we almost take it for granted.

The big question that consumers here might want to ask their regulators is why, when they generally have an established right to enjoy Skype over their chosen wireless provider’s network, are they still required to pay for a voice service?

If consumers can use Skype or any other similar app to make calls over a data network, does it make sense for them to also have to pony up for a second voice service? It’s a lot like forcing people who subscribe to home broadband to also pay for a landline.

Here in Canada, the Canadian Radio-television and Telecommunications Commission last week announced that it is looking into wireless carriers’ roaming rates. While it’s at it, the regulator should probably look into what looks like a clear case of tied selling. There are many wireless customers out there who would very much like to simply buy a data plan for their smartphone, without having the extra expense of an unwanted voice plan. They should have that option.

ADDENDUM: As a reader points out, it may be possible to buy a tablet SIM card and data plan and then pop that into a phone to get data only. It’s a bit of a workaround that I’ve never tried, but it’s still not an option for the vast majority of people who are in contracts. Mandatory voice plans are evidently acting as subsidies on contracted phones.


Posted by on September 4, 2013 in mobile, skype


8 responses to “Happy birthday Skype! Why are we paying for voice?

  1. Hideo

    September 4, 2013 at 12:09 am

    Peter, you can do this. Get a SIM card for a data stick, iPad or tablet. If you need to make a traditional voice call, you’ll be billed by the minute. The same thing goes for sending and receiving text and picture messages. I have done this many times.

    • Peter Nowak

      September 4, 2013 at 12:44 am

      Interesting, I’ll have to try that. You can’t do that while on a contract, though (well, you could technically, but you’d still be paying for voice).

    • Ry

      September 4, 2013 at 7:27 am

      This can be done, but keep in mind, it’s against the ToS to use a tablet plan in a phone. While I have seen people use a Internet Stick in a phone without any issues, those plans generally cost much more.

  2. Hello

    September 4, 2013 at 1:31 am

    TELUS is putting part of the Brian Canfield Centre for Excellence in Telecommunications, its 1976 headquarters, up for lease. Search “Brian Canfield Centre Colliers” and look at pictures of a first-rate corporate environment. Peter, what do you think of this world-leading corporate environment?

  3. Infostack

    September 4, 2013 at 7:10 am

    If you could port your cellphone # to skype PSTN/cellular voice would be dead in a nano-second.

    Skype succeeded in 2003 because it transited very inexpensive wholesale VoIP providers who were using relatively new technology called session border controllers in layers 4-5. It wasn’t just a peer-to-peer network, but rather a 2-way content/voice delivery network. I believe all they had to do was pay port charges. Of course it is not free, but it is very very inexpensive on a per session basis.

    It’s the same economics that’s driving datacenter and high capacity interconnect growth and what I refer to as WAN-side scale. These are all horizontally scaled business models washing up against inefficiently costed and priced vertically integrated service provider monopolies (wired and wireless). The latters’ collapse is inevitable given the rapid depreciation of capex/opex at every layer and boundary point and the ever bifurcating and fragmenting and growing demand models.

    All that said, the IP world needs evolved (balanced) settlement systems so that WhatsApp users can talk to Skype users can talk to Fring users. As well, users on network A can influence the investments on network B so that they can ensure QoS. Therefore the IP world needs to meet the PSTN world half way and move from bill and keep to a new settlement model. Please don’t call it 2-sided, as that is a monopolistic and piggish term.

  4. I've cut the cable TV cord, working on the cellular "cord"

    September 4, 2013 at 4:06 pm

    I’m getting too cynical, I guess, but I think Robellus are quite clever and capable of adapting to whatever we throw at them. If we abandon cellular voice and move to VoIP, then watch data plan prices skyrocket. They simply will not let their profit margins decline.

    I used to pay $30/6 GB ($5/GB) of data from Rogers four years ago. Data should be getting cheaper but it’s difficult to get this “deal” except at promo times and you must have a healthy voice plan to boot.

    Currently I’m a prepaid customer and we get the shaft like you wouldn’t imagine even though we put the lightest loads on the network (story idea!). Prices for minutes/text/data are nothing short of criminal, ($2048/GB) but it’s still cheaper than a monthly plan for my usage. Now I rely exclusively on free wi-fi and haven’t had a cellular data plan for a couple of weeks. So far I’m surviving. Even using a VPN I’ve found that my VoIP calls from a Tim Hortons or McDonald’s work fine.

    I’m trying hard to operate an open wi-fi network at home for emergency use by neighbours and their visitors, which also allows the use of VoIP. However, this is a bag of hurt to redirect to a ToS page (to cover my butt), limit bandwidth usage, AND to securely isolate from my home network unless I operate a dedicated router. Still working on it.

    So please encourage every restaurant you visit to offer free wi-fi if they don’t already. If wi-fi becomes ubiquitous then VoIP becomes a real possibility perhaps allowing for cheaper voice plans.

    • Peter Nowak

      September 4, 2013 at 4:20 pm

      There’s only one problem: guess who supplies wi-fi to the restaurants, complete with their own onerous terms of service?

      • I've cut the cable TV cord, working on the cellular "cord"

        September 4, 2013 at 4:52 pm

        Yes, I know it’s usually Bell and they do forbid VoIP in their ToS, which I gleefully ignore. I suppose they could tighten things up and block VoIP but then it would become a cat-and-mouse game as VoIP services try to work around the blocks.

        I guess it’s usually Bell because restaurants need a phone and Bell just tacks on the Internet at a hefty fee, no doubt.

        Still, I say fight ’em at every turn. Gee, I feel like a resistance fighter in my own country.

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