Thursday, May 3, 2007

Baby Bells come out blasting

Back in February, Skype asked the FCC to open up cellular networks. While some called this a “Cartefone for cellphones,” Skype’s arguments were less about wireline voice and more about the FCC’s 2005 wireline datacomm (i.e. wired broadband) precedent.

If the FCC backed Skype, it would mean that VoIP software, hardware and service providers could bypass carriers’ voice services, a spectre that global carriers just hope will go away. Not surprisingly, the two largest US cellphone operators and their trade association are opposed, and on Monday they filed additional objections.

Over the past week, the CTIA has posted a flurry of reports and memos against the Skype petition at their website. There are objections from the CTIA, their high-profile lobbying firm, Verizon executives, and economic consultants hired by CTIA and Verizon. I suspect the two reports from economic consultants alone cost over $100K. Skype is unlikely to get any manufacturers to openly oppose the big carriers, so they are clearly outgunned unless they can get some nonprofits to take their side.

Interestingly, some of the objections to Skype’s petition are being made on antitrust grounds. But strangely silent in the filings is the company that now calls itself AT&T — really Southwestern Bell and all the parts of old Ma Bell that SBC Ed Whitacre was able to stitch together before he acquiring the AT&T name. As SBC got bigger, the acquisitions got more controversial, particularly when SBC gobbled up BellSouth (and with it the other 40% of Cingular).

The Reagan Administration thought it was a good idea to break up Ma Bell, but now SBC and Verizon (NY Bell) have built most of it back up into a national telecom duopoly. Maybe a company called “AT&T” doesn’t want to be mentioning “antitrust” in front of the Feds right now for fear of waking the ghost of William Baxter (1929-1998).

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