That is pulling the plug on POTS. You know that little jingly thing your mother and grandmother still use at lifeline rates? Yes its still out there but dwindling by the day. So what happens? –

In response to a Notice of Inquiry released by the FCC to explore how to transition to a purely IP-based communications network, AT&T has declared that it’s time to cut the cord. AT&T told the FCC that the death of landlines is a matter of when , not if, and asked that a firm deadline be set for pulling the plug.

AT&T tells the FCC that supporting traditional POTS landlines is impeding investment in broadband, VoIP, and wireless services.AT&T said in its response to the FCC that “with each passing day, more and more communications services migrate to broadband and IP-based services, leaving the public switched telephone network (”PSTN”) and plain-old telephone service (”POTS”) as relics of a by-gone era.”

It also stated “It makes no sense to require service providers to operate and maintain two distinct networks when technology and consumer preferences have made one of them increasingly obsolete.”

Is AT&T right? Yes. The fact is Central Office based systems have long lead times and nearly as long tax treatment. Most of the majors were using 19/20yr MACRS or ACRS depreciation on the capital investment as that was agreed to by both the industry and the IRS as appropriate, circa 1950’s. Little has changed on that front ever since. But that poses a problem for say Version who just put a new CO remote in 5 years ago. (Rare as that is.) So how would that install be treated? Under the current rules an accelerated recapture would take place for junking the equipment. That’s a major hit when you consider that even today CO investments are in the billions. So the Telcos would push for tax relief if devaluation ever happened.

My gut says not so fast. Even though what AT&T says is true I have the tingly feeling in the back of my head that it won’t work out that way. AT&T would take the revised recapture relief to the bank, not do any more R&D/advanced services/VOIP/network upgrades, then cry poor mouth all the way into the CEO’s pocket. I am not against AT&T, its just how these guys have operated for years. I have been in the belly of this beast to know better.

There of course is another fly in the ointment to a devaluation of CO networks. I call it the other 1200. That is approximately how many phone companies there are in this country. Most are small operators, functioning as COOPs in rural territory that none of the majors even want to touch. At a minimum there would have to be some sort of relief offered to these companies. At a minimum most would require a DSLAM to get their customers on to VOIP. Most likely SBA enhanced funding would have to be offered at 0% interest to these companies. To date I have not heard of any plans to do so.

Devaluing the POTS network has to happen. We need to realize that as soon as possible. We also need to make sure that in the switch serious profit taking does not occur. Compensation where needed, support where required, but in the end it should be a net-net wash.

Linky.

As is give the Telco monopoly a run for their money in the voice only space. Today, Google officially announced that they acquired Gizmo5 the internet smart phone service for ~$30m. –

It’s a potent recipe — take Gizmo5’s open standards-based online calling system. Add to it the new ability to route calls on Google’s massive network of cheap fiber. Toss in Google Voice’s free phone number, which will ring your mobile phone, your home phone and your Gizmo5 client on your laptop.


Meanwhile you can use Gizmo5 to make ultracheap outgoing calls to domestic and international phone numbers, and free calls to Skype, Google Talk, Yahoo and AIM users. You could make and receive calls that bypass the per-minute billing on your smartphone.

Then layer on deluxe phone services like free SMS, voicemail transcription, customized call routing, free conference calls and voicemails sent as recordings to your e-mail account, and you have a phone service that competes with Skype, landlines and the internet telephone offerings from Vonage and cable companies.

That’s not just pie in-the-sky dreaming.

Google could pull it off. Combined with their existing Google Voice offering, a GV-Gizmo5 combo might give the Telcos the heebes. Like how about a serious integrated message stack? Its been implemented for years as a per supplier proprietary service. But till now, as an open available anywhere service? Just hasn’t happened. But Google has the tools/network/talent to pull it off. Oh and they have the customer base to go from nothing to the most dominant intgrated message stack on the planet.

Bank on it.

Linky.

Skype’s getting new owners, and apparently new attitude. Third party support has enabled Skype to do things it was never intended to do and this has made it more useful to millions.  Even the clueless Ebay management understood the value of third party extensions.  While Skype API’s remain open for now,  it’s pretty certain developers will change focus to more supportive platforms. Whatever the reason, this move is increadibly short sighted. The new Skype  looks even less enlightened than the old one.

Starting Friday, Skype is effectively pulling the plug on its Extras program, which was designed to help third-party developers create add-ons for Skype’s VoIP service (Windows | Mac)–like emoticon enhancements, backup services, and music player plug-ins. Unlike Firefox’s similar third-party extensions, not enough people were installing Skype Extras, Skype said in both an e-mail and in a blog post to developers.

Developers and users will have some adjustment time, though. Skype won’t certify any new submissions, but it won’t yank support for existing Extras either, that is, until their certificates expire. You’ll still be able to install existing Extras through the Windows desktop client, and you’ll still see them featured in the Skype shop. Skype will also continue to maintain its public application programming interface. (Cnet)

There’s no question the Skype grew under Ebay’s ownership. There’s also little question that it would have grown without Ebay as well. An investor groups that includes a few tekkies as well as the usual suits may help Skype realize the potential Ebay management never understood.

eBay Inc. (NASDAQ:EBAY) today announced it has signed a definitive agreement to sell its Skype communications unit in a deal valuing the business at $2.75 billion. The buyer, who will control an approximately 65 percent stake, is an investor group led by Silver Lake and includes Index Ventures, Andreessen Horowitz and the Canada Pension Plan (CPP) Investment Board. eBay is expected to
receive approximately $1.9 billion in cash upon the completion of the sale and a note from the buyer in the principal amount of $125 million. The company will retain an approximately 35 percent equity investment in Skype. The transaction, which is not subject to a financing condition, is expected to close in the fourth quarter of 2009. (Wall Street Journal)

While voice communications as  a stand alone premium service is poised to crash, the VoIP landscape is changing. With major players like Google and Yahoo offering competitive services and with smaller players like SIPphone taking market share, the area is becoming very competitive. With prices already at or near zero, competition will be in features, ease of use, and for fee value add options. As more open, 4G wireless networks enable the used of open mobile devices, look for the traditional voice carriers to enter the free or nearly VoIP arena as well.

Google Voice provided a great way to unify all of your other phones from one central number, but could not directly connect your calls. Gizmo has been the most innovative kid on the VoIP block, but has been overshadowed by Skype’s low flat rate calling prices to land lines and a big lead in user base.

Just announced, the two have been combined in a mashup to make a formidable product:

With Google and Gizmo5 you can get a suite of free calling services including:

• A free US telephone number which when called will ring anywhere in the world.
• Free* US calling.
• Free calls to:  1-800 numbers, SIP endpoints, GoogleTalk and Skype users.
• Use any PC, smart phone, Wi-Fi phone or ATA to receive or dial calls.  (Gizmo Voice)

eBay’s plan to spin off Skype with an initial public offering in 2010 is being threatened by a dispute with the VoIP service’s co-founders, who still own a key part of the software.

Bloomberg reports Skype’s founders Niklas Zennstrom and Janus Friis have accused eBay of breaching a licensing deal and are threatening to yank the technology, which would disable the popular voice over internet service.

In return, eBay is suing Joltid, the company operated by Skype’s founders, in a London court to prevent the shutdown.

The Skype founders apparently retained the service’s peer-to-peer sharing technology when they sold to eBay for $2.6bn in 2005. (Which, of course, begs the question why eBay would pay all that money without ensuring they own the entire platform).

Well smart business people always work to sell the cow but license the right to the milk it produces. That appears to be what is happening here with a legal scuffle between Skype founders and eBay. So when Meg Whitman, who was the CEO that brokered that deal, plunk down the money she did not read the fine print on what she was really buying? Certainly appears that way regardless of the outcome of the lawsuit.

Would be a real blow to eBay if they lose. The value of the Skype property that they are trying to spin off would be worth less if the buyer has to pay royalities to the two gents owning the technology. Any buyer worth their salt would know this and only pay accordingly. For what they would really be buying is just the customer accounts and IT infrastructure.

There are still some fun things to watch in the IT biz.

Linky.

Yes, it is not like when they were riding high Skype could care less about being interoperable. Fact they were down right rude about it, setting trip wires in their own systems so third parties could not use the IM capabilities, etc. But oh now that they might be spun off and have to make a profit they come sniffing with a call for ‘interoperability’ because they smell cash in corporate accounts. –

In particular, Skype wants support for Skype calls that come in to businesses using PBXs that support Session Initiation Protocol (SIP) trunking, said Stefan Oberg, general manager and vice president of Skype for Business “This is an area where we’d like to cooperate with you.”

Skype has announced its Skype for SIP capability that would make the link between its calls and corporate PBXs. Oberg was seeking cooperation to make interoperability easier for corporate customers. Skype has also issued Skype for Asterisk, which enables using Skype client software as softphones in businesses that use open-source Asterisk IP PBXs.

Oberg saod the company is building a stable of channel partners who will sell Skype to businesses and developing a premium support service that businesses require in order to ensure uptime for their communications. That will include local tech support with staff that speaks the local language, he said.

The company is also working on a business control panel, software that will enable a business to buy Skype credit and distribute it among individual users within the business.

I have only one thing to say to Skype. —

You are late to the party. You want to play now YOU interop with the standard, not the other way around. You had the opportunity to have your say in the matter years ago but decided not to play. Well tough. Play with the cards you dealt yourself. The world does not owe you favors. SIP is now the defacto standard live with it.

The gall.

Linky.

A tipster — a very reliable one — tells me that Skype is almost ready to launch that iPhone version, perhaps as soon as next week. CTIA Wireless, a large mobile industry trade event, kicks off in Las Vegas next Wednesday, so perhaps the announcement will be made there. I am working on getting more details, as well as screenshots of the service.

The biggest clue about Skype’s pending iPhone launch came when iSkoot decided to move on from its Skype-centric strategy. The company had been offering a client that allowed cell phone users to use Skype services. Skype already offers a Windows Mobile version of its client.

As I’ve said before, Skype will have to turn to mobile to keep its growth intact. In recent months, many services, among them Truphone and Nimbuzz, started supporting Skype in their communication clients. However, a standalone Skype client would get a lot of traction among the Skype faithful. In the meantime, I think Skype is slowly flexing its muscles and swatting away little VoIP players with some of its recent moves.

An interesting move by Skype. One that makes sense. One that is good for the end customer too. You pay Skype’s rate for an international call rather than AT&T’s rate. The question I have is how long will AT&T let that persist before they find some way to get their ‘tax’ in on the deal?

The bigger qualm is Skype itself. While the rest of the VoIP industry is coalesced around Open Standards, Skype continues to play Microsoft with it protocols. For the system as a whole it is just not good practice and does not foster interoperability.

Linky.

In an interesting move the Skype folks are releasing the SILK codec that is part of their new 4.0 platform. Now we know why that is, encourge all those third parties to write code to it. –

The wideband codec recently debuted as part of Skype 4.0 for Windows (with a Mac version coming in April.) With a claimed 400 million Skype users registered worldwide, the VoIP provider is apparently none too concerned about handing the competition keys to the kingdom without the usual charges.

Skype says it’s offering the licenses gratis to “establish a new industry-wide standard in speech processing,” ranging from web developers to chip manufacturers to mobile device makers.

SILK transfers audio between 8kHz to 12kHz - at least, that’s what Skype said, but we assumed it means 8Hz; thanks to all the readers who spotted the inconsistent numbers - compared with the 300Hz to 3.4kHz signals from most telephone companies. That means the conversation will sound clearer and more life-like, assuming both ends are using the codec.

Requiring SILK at both ends (and in between) will probably be the first hurdle for it to catch on with hardware manufacturers. If there’s a link in the communication chain not supporting wideband telephone, both sides get the same old lacking quality. But as Skype notes in the company blog, if you want to establish a new industry-wide standard, removing the cost is certainly a good start.

For Skype it is a good move. Now how about a new Linux upgrade while you are at it??

Linky.

Yes, you know who you are. You worry about EM radiation from toasters and late night knocks on the door from MaBell Phone Cops. Well you might be able to rest a little easier if you start using Skype. Especially if you can get on an European server –

The spybiz exec, who preferred to remain anonymous, confirmed that Skype continues to be a major problem for government listening agencies, spooks and police. This was already thought to be the case, following requests from German authorities for special intercept/bugging powers to help them deal with Skype-loving malefactors. Britain’s GCHQ has also stated that it has severe problems intercepting VoIP and internet communication in general.

Skype in particular is a serious problem for spooks and cops. Being P2P, the network can’t be accessed by the company providing it and the authorities can’t gain access by that route. The company won’t disclose details of its encryption, either, and isn’t required to as it is Europe based. This lack of openness prompts many security pros to rubbish Skype on “security through obscurity” grounds: but nonetheless it remains a popular choice with those who think they might find themselves under surveillance. Rumour suggests that America’s NSA may be able to break Skype encryption - assuming they have access to a given call or message - but nobody else.

The NSA may be able to do that: but it seems that if so, this uses up too much of the agency’s resources at present.

“They are saying to the industry, you get us into Skype and we will make you a very rich company,” said the industry source, adding that the obscure encryption used by the P2Pware is believed to change frequently as part of software updates.

Enjoy. Oh by the way, your hat is a little crooked.

Linky.