The inevitable has arrived: Skype vs. DT

By Carl Ford

As a Bell Head, it's hard for me to find any gumption for righteous outrage.

For over a decade we have been watching voice become an application, and as we move to the social networking side, its being further reduced to a function. 

This is the future, regardless of any battles today.

So having this long-range view, the squabble makes little sense to me.

First of all lets take the side of Skype. Skype is providing an application that supports awareness of friends. As I have written, Skype has become something of a useful social network for me (far better than leave behind blasts on Twitter and Facebook walls). Internal to itself, it supports communication in various media- text, video, and voice. The value of the solution is the presence awareness and the ability to reach out to people at a higher completion rate than any other method. It has value independent of telecom. 

And the fact that it has this value has caused demand for it to reach beyond its application, which is why we have SkypeIn and SkypeOut.  These services extend the reach of the original Skype product, and people pay for the additional connectivity. And some carriers are embedded in making money with Skype on this service.

Now lets defend DT. This is not hard either. DT was one of the first companies to adopt ISDN, even before the Internet united data.  The cutting edge is nothing new to Germany where most homes have PBXs. So, they are not reacting out of fear. Skype has a cellular phone service with their partner 3, so why should DT's phone be required to have Skype?  DT sells the iPhone with voice included in the pricing strategy, so enabling 3G Skype does change the revenue strategy. Additionally, taxes are being paid by DT for voice calls, so will regulators will be looking for taxes regardless of how voice is delivered?

Which brings me to real issue.  Access is the unit of measure of the future. With access being the real value of a service provider, how voice, video or text comes across becomes less relevant.

The battle disappears, or at least gets minimized.

The Internet is a best-effort network, and the backbone is alive and well overall. However, the backbone's cost is not directly associated with access, and while dial-up set the costs based on sharing the network access, broadband services and wireless services particularly have different traffic patterns. So is cost recovery being achieved?

A few years ago, Dr. Falk Von Bornstaedt, vice president of product management and IP/Solutions, ICSS, Deutsche Telekom, pointed out that inefficient P2P systems were eating DT's backbone inefficiently. For my Bell Head brain, this is a real issue, (though I hear Henry's voice in my head saying bandwidth is cheap).

So while this battle will be interesting, my view is the war is one of regulation. The model for taxes and carrier interconnection needs to be changed. Since this battle highlights the problem, I am glad it promotes awareness.