Voice over Internet Protocol (VoIP) is a general term for a family of technologies that enable voice communications over the Internet (and corporate intranets). Strong double-digit growth has placed VoIP into everyday life for many millions of people. In the early days I used Packet8. Then a VoIP system was created by entrepreneurs Niklas Zennström, Janus Friis, and a group of software engineers based in Tallinn, Estonia. I happened to be in Tallinn as part of a Baltic cruise a couple of years ago and wondered why the cobbled streets of a nearly thousand-year old small town on the Baltic Sea was lined with brand new high-end sedans. Later I realized that Tallinn was a mini Silicon Valley and home to the development of Skype. Skype became my “phone” for SMS messaging but especially for calling home from abroad for free. Skype was a game changer. A potentially even bigger game changer is Google Voice.
I have used a number of the VoIP services over the years but an impediment has always been that there was no way to use an existing contact list. With Google Voice you get instant synchronization with your Gmail contact list. When you start out you get a phone number — you can pick most any area code you want. The new number then becomes your “universal” number. When someone calls it your cell phone, your office phone, you home phone, and vacation home phone all ring. You answer and hear who is calling and press 1 to accept the call. Or for some people that you designate, the call goes straight to voicemail. For others only your cell phone rings. You can add your contacts to different groups and have each group be treated differently. You can “ListenIn” on voicemails as they are being recorded and then decide to enter a conversation. When you receive a voicemail you get an email containing a machine transcription of the message. It is not perfect but good enough that you can tell who it is and what the call is about. You can block callers, record conversations, or add them into an ongoing conference call — up to four callers can be added to the free conference call. The history tab in Google Voice shows all of your inbound and outbound calls. Needless to say you can search through the history of all your calls to refresh your memory about a conversation you had a year ago. SMS messages and all of your calls have shared inboxes, trash, history, and spam folders just like gmail.
The feature I like the most is that you can install X-Lite — a free VoIP program that runs on your PC — and add the associated SIP number as one of your Google Voice phone numbers. When a call comes in while you are at your PC, a dialogue box pops up on your display. You click “answer” and then the call can be handled with a headset (I use a Plantronics noise-canceling model) which provides hands-free high quality audio for me and the caller. Another nice feature is that you can make a Google Voice call from your iPhone (or any mobile phone). All U.S. calls are free. A call to Norway is two cents per minute. With free conference calls and a boatload of other free features, Google Voice is going to put the heat on the telephony monopolists. It will also put pressure on eBay’s $2.5 billion acquisition of Skype for which they later took a $1.4 billion write-down.
Speaking of the telephony monopolists, there have been rumors — denied by AT&T — that the giant phone company told Apple not to approve Google mobile for the iPhone. Apple says it is looking into it. Apple’s concern is that Google mobile is so tightly integrated and user-friendly that it takes away from the iPhone’s branded look and feel as a phone. This is just the beginning of a clash between Apple and Google. As for AT&T, they like innovation as long as it is not at their expense. Google mobile would let people call Europe for free or close to free while AT&T charges $1.49 per minute unless you sign up for a monthly plan. Google Voice, Google mobile, Skype, and the many other innovative VoIP providers see a phone call as just another form of data and moving data around the Internet is very cost effective. AT&T sees a phone call as a voice service and they are trying desperately to protect their revenue by stifling progress.
The Wall Street Journal just published an excellent editorial on this subject called Why AT&T Killed Google Voice. The sub-title to the story is “Telecom operators are yesterday’s business. It’s time for a national data policy that encourages innovation”. Author of the story Andy Kessler says the Federal Communications Commission is investigating wireless open access and handset exclusivity and that the result ” may finally end the 135-year-old Alexander Graham Bell era. It’s about time.”.
Kessler says “AT&T is dying” and that they are “dragging down the rest of us by overcharging us for voice calls and stifling innovation in a mobile data market critical to the U.S. economy”. The problem is a lack of competition. Unlike all other Internet and data-related companies where there are thousands of competitors, when it comes to ownership of the spectrum — the wireless pipe to customers — that is hardly the case. Verizon Wireless and T-Mobile joined AT&T in bidding some $70+ billion since the mid-1990s for spectrum. The cost gets passed on to us in the form of higher fees. They have not had to compete on price. Google Voice is the new competition offering voice service for free by leveraging their huge data handling systems resources and advertising revenue.
Kessler says we can live with overpaying for mobile but “it’s inexcusable that new, feature-rich and productive applications like Google Voice are being held back, just to prop up AT&T while we wait for it to transition away from its legacy of voice communications”. Now the FCC and its new Chairman Julius Genachowski are getting involved. Hopefully the outcome will be deregulation not regulation. Many will call for a new national communications policy. But even that’s obsolete and Kessler comes at it differently. “There is no such thing as voice or text or music or TV shows or video. They are all just data. We need a national data policy”. There are four parts to Kessler’s idea.

• End phone exclusivity. Any device should work on any network — yes, including the iPhone. Data should flow freely.
• Transition away from giant companies owning airwaves and move to a standards based unregulated model like WiFi.
• End municipal exclusivity deals for cable companies — yes, including Comcast. Recognize that “TV channels” are a thing of the past. Enable people to pay for what they want to watch and not have to pay for dozens of “channels” they don’t watch.
• Encourage much faster data connections to our homes and phones. Kessler says it should more than double every two years. To homes, five megabits today should be 10 megabits in 2011, 25 megabits in 2013 and 100 megabits in 2017. These data connection speeds are technically doable today but are being held back by obsolete voice and video policies made to satisfy the telecom giants and their legions of lobbyists.

I agree with Andy Kessler that technology doesn’t wait around — “so it’s all going to happen anyway” — but it will take years too long given the current course and speed. The best thing the new FCC could do would be to adopt the four pints above and then put itself out of business. New services like Twitter don’t need to file with the FCC. Neither should new “voice” services. Voice is just another kind of data. Let’s treat it that way.

• Why AT&T Killed Google Voice
• Google Voice (post from March 2009)