Alec Saunders SquawkBox

Google and AT&T are having a spat over “Net Neutrality”.  Google Voice doesn’t pass calls to certain rural carriers because of the high cost of termination in these jurisdictions.  That includes, I’ve been told, our Calliflower conference service which is hosted at a rural carrier as well.  AT&T is trying to convince the FCC that Google Voice is, in fact, a common carrier, and should have to abide by the same rules as they do.  They’ve labeled this a fight over Net Neutrality, which is a mischaracterization.

Hold that thought.

Last week the Iowa Utilities Board came down hard on so-called free conference calling services that operate out of Iowa.  For those unfamiliar with the model, here’s how it works:

1. All long distance calls made in the United States operate on an inter-carrier payment scheme, where one carrier collects money from a customer, and then pays another carrier to receive that call.
2. Free conference call services try to locate their services in places where the recipient carrier charges a higher rate than the average, and then receive a share of the revenue that the recipient carrier earns.

It’s arbitrage, pure and simple.

In the old days, when people actually paid for long distance calls by the minute, these schemes didn’t matter much.  However, in today’s environment, where carriers have marketed their plans as having unlimited nation-wide long distance, arbitrage plays between what the carrier charges the customer for service and the price they pay to deliver the calls can cost the carrier money.  Arbitrage is interfering with the carriers marketing plans, and they don’t like it much.  They’re fighting back.

So what did the IUB — Iowa Utilities Board — say?

1. That termination fees paid by the long distance carriers were to be refunded.  The fees were improperly collected.
2. That telephone numbers assigned to some of the free conference service providers had to be unassigned and reclaimed.   They had been illegally granted to the service providers in the first place.

Folks at Sprint who’ve been close to this are painting it as a victory, but that may be premature.  The IUB ruling is quite technical, hinging on whether or not the conference service provider is a customer or a business partner.  The long distance carrier is required to pay termination fees when a call terminates at the local carrier’s customer premises.  A customer subscribes for tariffed service, and has premises in state.  The conference service providers had a business arrangement where they didn’t pay for services – they simply split revenues. Because they paid no fees for collocation, bandwidth or phone service, they were deemed to be partners, not customers, as they shared profits and losses with the LEC instead of subscribing for services.   By that reasoning, the IUB determined that the tariff didn’t apply, and no termination revenues needed to be paid.  Moreover, because the conference service provider paid no fees, and rented no space from the hosting carrier, they were deemed to have no premises in state.  In order to be allocated a number, the rules state that the subscriber must have premises. Therefore it was illegal for the free conference service providers to be even given a telephone number.

The Iowa Utilities Board treated the entire arbitrage scheme in that state as an illegal conspiracy to artificially jack up termination revenues, and shut it down on technicalities in the tariff. They carefully said, however, that charging termination fees for conference calling services wasn’t illegal.  The manner in which it had been done, however, was illegal.

This will have many service providers in Iowa scrambling.  Iowa was one of the most popular locations for free conferencing and other kinds of services for many years.

So back to Google versus AT&T.  This isn’t a fight about Net Neutrality, even though AT&T has characterized it that way.  In actuality, AT&T appears to be trying to drag Google into their fight over rural access charges.  Google may be an (unwilling) ally, as they are facing the same issue – how to avoid paying higher than average termination fees in a business model that gives the customer unlimited long distance for no additional charge.  By trying to characterize Google Voice as a common carrier, they are asking the FCC to force Google to terminate calls on those rural carriers – a move that Google will fight.

Political maneuvering at its finest, no?

And by the way, if anyone cares to know, Calliflower is not located in Iowa.  The Iowa Utilities Board’s decision affects many free conferencing service providers, but it doesn’t affect us.  If your conference call number is in a 712 area code – that’s Iowa – check out Calliflower today for your peace of mind.

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• AT&T Calls Google a Hypocrite On Net Neutrality (tech.slashdot.org)
• AT&T Complains Google Voice Violates FCC’s Net Neutrality (huffingtonpost.com)
• Bits: AT&T Says Google Voice Violates Net Neutrality Principles (bits.blogs.nytimes.com)
• AT&T Whines To FCC That Google Voice Violates Net Neutrality [Oh Snap] (consumerist.com)
• AT&T Complains Google Voice Blocks Calls It Can’t (thaibrother.com)
• AT&T Accuses GOOG of Net Neutrality Violation (marketingvox.com)
• AT&T, Google Spat Over Google Voice Blocked Calls Is Important… But Totally Misses The Point (techdirt.com)
• Critics: AT&T griping over Google Voice a “red herring” (arstechnica.com)

"Slick".  That’s what I said when I powered up the Polycom phone that the folks at Junction Networks sent me in order to be able to review their new My.Onsip user interface.  Truly plug-and-play, the phone immediately found the Junction Networks hosted PBX, configured itself (even through my NAT and Firewall), and was ready to go in a few seconds.

As cool as it was, however, I wasn’t as interested in how easy the phone was to configure as I was in the GUI that Junction Networks announced last week.  Web based, my.Onsip shows presence information for everyone in your organization, incorporates XMPP-based chat, and allows dialing from either the on-screen GUI, or the phone.  You can see a photograph below (credit Lonnie Lazar’s review at Voxilla).  On the left you see presence and availability information for people in your organization, and on the lower right, tabs for messaging.

So why is this so compelling? Fact: over 80% of calls end in a voice mail box today.  If business can find a way to deal with telephone tag, they can boost productivity everywhere in the organization.  Simply knowing the availability of the people you need to reach will help immensely.  Moreover, Junction Networks has gotten the interaction model right.  Today’s business phone user uses  IM first, to establish that the other party is available to talk, followed by a voice conversation if necessary. 

Now all they need is a mobile version for my iPhone or Blackberry.

In a speech glutted with market data, Skype CSO Chris Dean began his remarks at VON by saying that there is an ongoing sea change in the telecom market, and it’s only accelerating.  The macro trends are around wireless, wireline, emerging applications and service models, the economy and the regulatory environment.  And he warned that there are immense risks to operators that don’t adapt.

According to Dean, 35% of Skype customers are using the product for business in some form, and 20% use video for business purposes.  95% chose Skype to save money, 62% say they communicate better, 70% say the use it for travel, and 80% say they see increased productivity.

Reaching out to wireline carriers, wireless carriers, MSO’s, OEMs, VARs, application developers and independent software vendors, Dean said that Skype is “no longer the bad-boy disruptive influence” it once was. He then went on to announce a new relationship with Cisco, and a channel program for service partners that will roll out later this year.

It was a sound and welcome riposte to the criticism that Skype has abandoned its ecosystem.

The democratization of the news took another step forward yesterday when Livestream announced Livepack.  A backpack sized turnkey hardware solution that marries HD video to six load-balanced 3G modems with encoding hardware and 30 hours of uplink time per month, this solution promises to replace the ubiquitous broadcast truck with something a single person can carry.

The price?  $2500 per month, or $1500 per month on a 12 month commitment.  When compared to a $50,000 per day satellite truck, however, that’s nothing.

Perhaps more interesting to me, however, is the way in which this technology might disrupt the broadcast industry.  Think of how tiny form factor hard disks changed the computer industry, and then imagine the potential of being able to broadcast HD video from anywhere, without a crew, and without masses of equipment.  The paparazzi will have a field day, no doubt, but what will this do to political reporting, the enterprise (portable telepresence anyone?), and sports?  What new venues will we see video journalists reporting from?  And how will the citizen journalism movement adopt these technologies?

Montreal based Mobivox announced this afternoon that it had been acquired by Indian / MountainView California startup SabSe Technologies.  The brainchild of Hotmail co-founder Sabeer Bhatia, and serial entrepreneur Yogesh Patel, Sabse first launched the Sabsebolo.com conferencing service in India, then acquired Jaxtr in June of this past year, and has now acquired Mobivox.

Terms of the acquisition weren’t disclosed, but one source close to the deal said “It’s good for both parties, and plenty of development will be done out of Montreal.”  That’s welcome, as Bhatia and Patel could have easily shipped the entire operation offshore. 

To date, Sabse has launched a conference calling service, a hosted PBX provider, acquired an international VoIP player, and now they have bought a voice user interface player.  What’s the end game?  In this 2008 interview, Patel says:

We strongly believe Sabsebolo has the potential to be a dominant player in the market. Not only in the audio conferencing but may be the whole voice platform.

Bob Poe began his piece on this acquisition saying “It’s clear that many VoIP companies aren’t meant to be standalone telecom businesses”.  In fact, the market is ripe for a roll-up of VoIP players, and SabSe is clearly taking on this role.  Expect to see other players stepping up to the plate as well, as the market for interesting VoIP technology companies heats up.

And if anyone is counting, Mobivox’ exit to Sabse is the 16th in the last five years by a client of VoIP maven Andy Abramson…