• No, Asterisk does everything a private branch exchange (PBX) can do. Asterisk is a free software VoIP? switch.

• There are some patent issues you haven't mentioned. That's important.

Cell Phone Industry Fights VoIP...

Notes

1 : See EU battles industry plans to restrict Skype on mobile phones, EurActiv.com, July 16, 2009, http://www.euractiv.com/en/infosociety/eu-battles-industry-plans-restrict-skype-mobile-phones/article-184142; see also EU slashes ‘roaming’ cell phone costs, CNN.com, July 1, 2009, http://edition.cnn.com/2009/BUSINESS/07/01/eu.roaming.cellphones/index.html.

• You might have wanted to mention something about the corporate history of Skype, about the size of its user base, about the services it offers for interaction with POTS and so on. If the reader is naive enough to need the explanation you are giving, he needs more. Why are you using footnotes in a wiki? Surely you see that's absurd. Make links in the text.

By comparison, the US Federal Communications Commission (FCC) is sending mixed signals with respect to the use of VoIP technology on cell phones. In March 2008, the FCC held an auction to sell the recently-freed 700 MHz spectrum; AT&T and Verizon were considered the big winners because they each bought a lot of spectrum.(2) The 700 MHz spectrum is considered particularly valuable because of its ability to penetrate buildings and cover all fifty states, including rural areas.(3) One of the conditions of this auction was that the frequency be open access, perhaps indicating the FCC’s desire to allow VoIP technology on cell phones.(4) While the ACLU and others earlier pushed for open access to mean open devices, open applications, open services, and open networks, the FCC only required open devices and open applications.(5) So while the FCC can publicly claim to be supporting open access, which would allow VoIP technology to flourish on cell phones, in reality its support for open access is lukewarm at best.

• You haven't explained what those catchwords mean, so unless the reader doesn't need you to tell her anything, you haven't told her what she needs to know.

In April 2008, the FCC further demonstrated its reluctance to allow VoIP technology on cell phones when it turned down Skype’s open access petition, which would have given Skype federal protection to run through cell phone carriers.(6) The FCC claimed to turn down Skype’s petition because the Commission has enough rules requiring open access, including the requirement that the 700 MHz frequency be kept open access.(7) But if the FCC were really in favor of open access, why restrict Skype? The United States may be less willing to fight for VoIP technology on cell phones and open access in general because the government profits from keeping cell phone companies in business; cell phone companies pay the government when spectrum is originally licensed and then pay a second time when taxes are levied on those consumers using telecommunications services.

• The US government has less taxation interest in the telecomms sector than the European member states do. Perhaps you should look elsewhere for a reason US regulation is weaker.

Notes

2 : Chris Ziegler, FCC releases 700 MHz auction details, engadget.com, Mar. 20, 2008, http://www.engadget.com/2008/03/20/fcc-releases-700mhz-auction-details-verizon-atandt-big-winners/.

3 : Joshua Topolsky, Open Access: everything you wanted to know but were afraid to ask, engadget.com, Feb. 5, 2008, http://www.engadget.com/2008/02/05/open-access-everything-you-wanted-to-know-but-were-afraid-to-as/.

4 , 5 : Id.

6 : Nancy Gohring, FCC to Turn Down Skype’s Mobile Open Access Plea, pcworld.com, April 1, 2008, http://www.pcworld.com/article/144025/fcc_to_turn_down_skypes_mobile_open_access_plea.html; Paul Miller, FCC Turns Down Skype’s Open Access Petition, engadget.com, April 2, 2008, http://www.engadget.com/2008/04/02/fcc-turns-down-skypes-open-access-petition/.

7 : Gohhring, supra note 6.

• Maybe you want to make clear the time scale for your predictions, and give a little more insight into the mechanism. At present the closed-network operators have significantly reduced the amount of WiFi available pretty much everywhere in the developed world, and are working very hard to replace the public internet with their closed networks at the consumer wireless level. So how do you know what's going to happen in the end?

Notes

8 : Cleve Nettles, Apple, AT&T, the FCC, Google and Skype remark on AT&T opening VoIP over 3G, 9to5mac.com, Oct. 6, 2009, http://www.9to5mac.com/apple-skype-vonage.

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It is strongly recommended that you include your outline in the body of your essay by using the outline as section titles. The headings below are there to remind you how section and subsection titles are formatted.

• No, this analysis is completely wrong. The cell phone call is a service provided over a proprietary network using (in the United States) hardware that is deliberately prevented from employing non-proprietary networks and protocols to implement point-to-point dataflows containing voice conversations. It competes against use of public internet commodity bandwidth to switch voice-over-IP conversations using free software, which can of course occur over both wired and wireless pipes, which (being pipes) are indistinguishable from the network's point of view. The cellphone companies therefore try to price discriminate their data transmission services (because they also own and operate the wholesale data networks that are primary pipes from the public internet) from voice transmission services. Regulators could prevent that altogether, but they don't because the companies are successful enough at doing so to bribe the political systems within which the regulators operate. They do so partly through subsidizing political careers, but more fundamentally as tax farmers: they buy spectrum from government and then provide expensive telecommunications services which government gets paid for up front when spectrum is bought, and then again at the margins through telecomms service taxes. In return, govt used to require that everyone telecommunicate using their services, and nowcontinues at least to passively discourage a transition to voice-over-IP telephony in which everyone would have enough bandwidth (the amount required is trivial) to have free voice communications forever.

• That you didn't figure this all out for yourself is no disgrace: we'll be talking about it more in weeks to come. But you could have read something more than one Forbes' Article, which as usual is pretty much uninformative total bullshit designed to sell a stock tip. Had you done so, including by consulting the readings I have posted already, you would have gotten much more of a head start. So I think the right thing to do is to broaden the reading a little bit and then do another draft on the basis of the new reading. That should help very substantially and make it possible for you to write an excellent essay.

The Obsolete Business Model

Companies established rules to regulate cell phone calls based on the obsolete business model of operators working switchboards, but those rules do not make sense in the cell phone context. For example, it used to cost more to call in the middle of the business day because more operators were needed to address the increased volume. Thus, people used to pay less for a long-distance call placed after 11 p.m. This practice bears a striking resemblance to the restriction on cell phone calls where minutes are "free" after 9 p.m.

Similarly, “despite the lack of any plausible link to their underlying costs,” (Article, 96), phone companies began charging more for text messages to encourage consumers to purchase unlimited texting, which increased profits. I myself am a “victim” of AT&T’s text messaging plans, often exceeding my 200 text plan by 20-30 texts. It is unfeasible for me to expand my plan to avoid the extra charges for going over my allotment, since the next level of flat-rate text messages is 1000 texts, which far exceeds what I need. (Undoubtedly, AT&T knows the habits of its consumers well enough to determine that providing 200 texts and 1000 texts, with no option in between, is the best way to make the most money.)

The New Business Model

MetroPCS? has a different attitude about the cell phone industry. This company functions more like a service provider and less like a service dictator: it offers consumers unlimited talk for a flat rate of $40/month instead of locking a consumer in for a specified time period and restricting what the consumer can do during that time. See Article, 99-100. According to MetroPCS? ’s model, a customer pays to gain access to the cellular network, and then once on the network, he can do whatever he wants.

MetroPCS? seeks to “turn cell phone calls into just another cheap digital commodity.” Article, 94. By providing the service for less money, it makes the service more accessible, which will attract more customers; while the profit margin will be lower, the volume is so much higher that MetroPCS? will make more money. MetroPCS? is already the fifth largest cell phone network behind AT&T, Verizon, Sprint Nextel, and T-Mobile—a distant fifth but gaining quickly. Article, 92.

Faced with this competition, the oligopoly of the giant four have all followed suit to some extent, issuing unlimited, no-contract plans (except for T-Mobile who is expected to do so in the near future). Article, 100. This step turns the cell phone oligopoly into mere service providers who provide access and no longer dictate the terms of that access. Limitations on using the network (whom you can call when and for how long) will no longer work. Companies will be forced to cut their prices for service because of competition from the Big Four, and from smaller companies like MetroPCS? . Eventually, however, it is the competition from the internet itself that will doom the Big Four and other proprietary models.

What the Future Holds

Whereas in the past, cell networks were built to process cell phone calls and other data separately, the 4G network treats phone calls as just another kind of data to be moved around. Article, 101. Despite the Big Four’s resistance, the market will not allow them to keep VoIP? applications like Skype from operating on the cell phone network, especially as 4G will treat a Skype phone call the same as any other data communicated over the phone. Instead of making the cell phone call a cheap digital commodity, anarchist production – routing calls over the internet – will entirely eliminate the commodity of a cell phone call. Just as the Big Four had to recreate themselves after the collapse of traditional local and long-distance phone service, so too will they have to find another way to survive and profit. Consumers are discovering that all of their cell phone calls can be covered by paying for a monthly data plan (as with mobile internet), as opposed to MetroPCS? ’s unlimited talk plan which does not include internet. As the Big Four already provide data services for laptops, in time a cell phone plan will not distinguish between talk and data capabilities, and a single monthly rate will allow access to talk or surf the web.

• No, this is technical nonsense. In the first place, whether to provide "fake Internet" or actual all-ports, all-protocols services is not intrinsic to the spectrum bundle providing the wirleless access over a net segment, it's a software-determined property of the not-public proprietary network provider you've signed up with, no matter which of the so-called "choices" for taking the real Net away from yourself you've been conned into making. Second, the idea of being charged $10/month for what in the wholesale market would be $0.000000001 worth of bandwidth for all your voice conversations is not exactly attractive. That it's not the price at which the guys who bribe politics to make five times as much from you and twelve times as much from older people with stupid habits are currently charging is hardly important. The right retail price under current circumstances for the quality of bandwidth service you receive in your university dorm room (which you would find, if the music and movie bullshit companies would stop artificially criminalizing you, is enough to bring any HD movie into your room from a standing start in ten or twenty minutes, and an ordinary DVD in four or five, thus making Netflix and all the streaming services worthless) plus all the wireless voice and data services iPhone users are currently really unable to get from AT&T when you are out and around, should be about what you currently pay Columbia for the Ethernet jack in your dorm, which amounts to about $5/mo. If the US reorganized the regulatory and political framework around giving Americans even just the quality of service and price level currently available to absolutely everyone in South Korea or France, rather than your forecast, which is essentially about how wonderful it would be to put everyone in a high-priced Japanese-style telecomms jail, you'd still be able to get everything I'm talking about, with real as opposed to fake network services, home and away, for $40 or so. You need to take a little more look at the international situation, instead of believing the nonsense you find in American business magazines. What they write about telecomms is even more obviously false and corrupt than what they write about health care, which is saying something.

• Forbes_Article.pdf: Forbes Magazine Article: "The $10 Phone Bill"

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