Group Asks FCC: Make AT&T Allow VoIP on iPhone

Published July 1, 2009

The “open Internet” activist group Free Press has asked the Federal Communications Commission to investigate AT&T’s refusal to allow the Internet phone service Skype to access its wireless network on the iPhone.

The Washington, DC-based Free Press argues the restriction violates federal rules and is “designed to cripple applications or hinder consumer choice for anticompetitive purposes,” which is illegal. An AT&T spokesman said the company has “no obligation—nor should we have—to facilitate or subsidize our competitors.”

Popular Option

Since its release in April for iPhone, Skype’s voice over Internet protocol (VoIP) service has become the most popular download at Apple’s iPhone software store. Skype users can call each other for free or place calls to traditional landline and mobile phones for a small fee.

The request by Free Press, a group that has a history of attacking efforts by cable and wireless companies to restrict use of their networks, could open up a broader review of the ways wireless companies control their networks.

Deutsche Telekom, a German wireless provider, in April banned use of the Skype application on the iPhone and said anyone caught using it will face a contract suspension.

Bandwidth Hog

Azita Arvani, president of Arvani Group, Inc., a boutique strategic consulting company based in Los Angeles, argues VoIP services such as Skype hog scarce bandwidth. Wireless firms such as AT&T have an obligation to provide great service for all their paying 3G data customers, not just Skype users, she notes.

“AT&T’s current 3G technology used by iPhone is High Speed Downlink Packet Access,” Arvani said. “Without getting bogged down in technology, it is important to underline the downlink part of it. It means that the network has a higher bandwidth when you are downloading information onto your phone versus uploading information from your phone.

“Using a point to point service, like Skype, means that both download and upload links will have to be used,” Arvani added. “So, an application like Skype may not be bandwidth-hogging on the downlink, but it can clog the uplink stream.”

This has a big effect on the user’s experience, Arvani says. “For example, at a college campus, if everyone used Skype on AT&T’s 3G network, the performance of your phone’s Web browser would be dismal,” she said. “Later, when the network is upgraded, … these impacts may be lowered. But that is a call that AT&T has to make.”

Market Approach Preferred

Jeff Kagan, a wireless and telecom analyst based in Atlanta, agrees with Arvani.

“In the United States we have always allowed businesses to decide how to do business and who they do business with,” Kagan said. “It is not natural for the government to tell business what to do and how to do it.

“Traditionally, if a business made a decision that is not what the market wants, they learn the hard way by losing business,” Kagan added. “Then they can make market-oriented decisions. That method still makes the most sense—a market approach instead of a government-ordered approach, as long as the customer has choice.”

Arvani likewise cites market freedom and business considerations as compelling reasons for AT&T to continue its current position.

“AT&T has spent a lot of capital expenditure and nonrecurring engineering costs to put its network together,” Arvani said. “I think they have a right to decide what applications would negatively impact that network and be able to restrict that.”

UK Carrier Allows Skype

In the United Kingdom a mobile carrier has decided to allow the use of Skype on its 3G networks in order to differentiate itself from other carriers, Arvani says. American companies should be able to choose or not choose such a policy on their own, not be forced to do so by a government agency, she says.

“If a mobile carrier in the United States decides to follow a similar path, they are free to do that,” Arvani said. “If it turns out Skype on 3G is good business, others will follow suit. No government interference is needed.”

Phil Britt ([email protected]) writes from South Holland, Illinois.