Skype and that river

Da Nile is flowing through Bonn and the global T-Mobile headquarters. The German carrier is blocking Skype iPhone use on both its network and also its Wi-Fi hotspots. Skype’s general counsel responded

I find it quite telling that Deutsche Telekom would be so bold as to announce this arbitrary blocking of Skype. They pretend that their action has to do with technical concerns: this is baseless. Skype works perfectly well on iPhone, as hundreds of thousands of people globally can already readily attest. But their announcement also demonstrates that some operators do not fear the customer or regulatory consequences of their bad behaviour. It’s worth noting that even if German consumers wanted to change mobile providers, they could not: like Deutsche Telekom, every other German mobile operator contractually forbids consumers from using VoIP applications. (this is the same in France, actually).

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Yet, no one can do anything about it: German or EU regulation does not forbid such blatantly unfair practices, and the new EU legislation for telecoms which the European Parliament and European governments are supposed to adopt later this month will not help either, it seems from the latest texts being considered in Brussels: it may even make things worse, by legitimizing restrictions put in place by operators to users’ Internet access, as long as they inform consumers.

AT&T is more open in its criticism as told to USA Today:

Jim Cicconi, AT&T's top public policy executive, says AT&T has "every right" not to promote the services of a wireless rival.

"We absolutely expect our vendors" — Apple, in this case — "not to facilitate the services of our competitors," he says.

"Skype is a competitor, just like Verizon (VZ) or Sprint (S) or T-Mobile," he says, adding, Skype "has no obligation to market AT&T services. Why should the reverse be true?"

Now (self-styled) consumer activists are asking regulators to intervene (in a longstanding regulatory case) on Skype’s behalf and end VoIP blocking once and for all:

"This issue is not new -- it is simply unresolved. Wise voices at the FCC have long said that the Internet Policy Statement applies to wireless," said Ben Scott, policy director of Free Press. "As more and more consumers begin to access the Internet wirelessly, it is critical that the FCC clarifies that online consumer protections that prohibit blocking are the same regardless of how we access the Web."

A similar argument came Monday from Voice on the Net (VON) — a DC-based VoIP lobbying group featuring Google, Microsoft and Intel — which has asked the EU to overturn the T-Mobile decision.

Again, this is an unwinnable fight. I’m guessing that the carriers figure they can get a 0.5-2 years by stalling in the US, and longer in Europe where their status as former government departments (PTTs) will allow them to exploit nationalism against the Luxembourg-based Skype (owned by the big bad American eBay).

Google is in a particularly odd position. It is pro-VoIP, pro-Skype and wildly in favor of “Net Neutrality” in addition to being a co-sponsor of the VON Coalition. However, for its Android-based G1 phone is kowtowing to T-Mobile’s restrictions in the US.

Thus far, Skype has only released the Java-based client “Skype Lite” for various top five phone vendors and specifically for Android. The “Lite” means VoIP-free: it makes calls over the voice network, thus mollifying carriers.

At some point, there will be a real Skype for Android phones. So then what will Google do? Block it? Have the VON Coalition attack T-Mobile while Google knifes Skype from the Android Market?