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“To Whom May I Direct Your Free Call?”

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VoIP (Voice over Internet Protocol, the “new new thing” in telephony, which promises to make phone calls FREE) is closer than ever: developments are happening at near warp speed. Let’s start with this past Sunday’s lead article in the New York Times’ Money & Business section, headlined “To Whom May I Direct Your Free Call?”

Turns out the two guys who invented Kazaa, which destroyed the music business, have now turned their attention to the phone business, with wonderful prospects for you and moi. From the article:

    They have created a way to allow people to make high-quality phone calls over the Internet without having to pay a penny.”

    It is ‘a real opportunity to do something that is disruptive in a very positive way,’ said Niklas Zennstrom. ‘We have a big ambition with Skype: it is to make it the global telephone company.’

    Skype allows free calls between any two users who have downloaded the software. It is simple to use and provides clear connections to anyone with a broadband connection and a basic headset.”

    Even Mr. Zennstrom, 37, and his partner, Janus Friis, 27, say they are surprised by how fast Skype is catching on. This winter, Skype plans to introduce a feature that will make it possible for users to call people on regular telephones – for a fee it says will be “substantially lower” than current phone service. That means that Skype wouldn’t just allow computer-savvy users to call one another: it would allow them to call anybody with regular phone service.”

    Already, more than a million people have downloaded Skype’s free software.” The company has been in existence for one month, by the way.

    In a recent report on the telecommunications industry, Daiwa Securities wrote that Skype ‘is something to be scared of, and is probably set to become the biggest story of the year’ in the telecom sector. ‘We think the Skype offering (and whatever may follow it) is akin to a giant meteor hurtling on a collision course toward Earth,’ the report said.”

    ‘VoIP is going to change everything,’ says Jeff Kagan, a telecommunications consultant based in Atlanta. ‘The big telecom companies worry that VoIP could completely undermine their business within 12 months,’ says Berge Ayvazian, a senior research fellow at the Yankee Group.’

All the telcos, wired and wireless, are “dead companies walking.” Still time to sell short….

You can already use a regular telephone with VoIP, by the way; Vonage started doing this a few months ago and already has 55,000 subscribers. You get unlimited calls in the U.S. and Canada for $35 a month. Oh, is that less than the combination of your wired + cell bills? Really? I’m not the only one?

The best part is, it’s legal! Unlike music file sharing, these guys found a loophole big enough to, as Arnold said to Arianna during their debate about her tax strategy, “drive my Hummer through.”

“‘I am here to have fun and to have some challenges and try to achieve them and to make an impact,’ Mr. Zennstrom said. ‘Of course, I want to make money, too.'”

“Does Mr. Zennstrom relish the idea of causing trouble for the telecom industry? He laughed, then said, ‘Yes, that’s fun.'”

I’m totally in tune with these guys: I love to cause trouble and have fun. In fact, for me, the two are synonymous: always have been, always will be. In “A Hard Day’s Night,” Ringo is asked, at a press conference, “Mr. Starr, do you consider yourself a Mod or a Rocker?”

“Oh, neither,” replies Ringo. “I’m a mocker.” Perfect.

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About bookofjoe

  • Eric Olsen

    Joe, very important story, thanks!

    Please try the indenting deal I mentioned, much less confusing when doing a block quote.

    Also, I am surprised your view of Kazaa et al is so close to that of the music industry. I don’t think Kazaa has had all that much to do with the recording industry’s problems. I think they mostly brought it on themselves and the Kazaa’s of the world just punctuated the issues already there. As many studies as not seem to indicate file sharing actually HELPS sales by introducing people to new music and allowing them to sample before they buy. I think it’s very much analogous to the Internet phone revolution you applaud.

  • http://mcfrank.blogspot.com Chris Arabia

    Call me a cynical bastard–it wouldn’t be the first time–but I fear that there may be a one-car accident in these guys’ future.

  • Eric Olsen

    I agree! But don’t you think publicity like this – in the NY Times no less – indemnifies them somewhat against “jury’s disease”? With the cat this far out of the bag, can if be stuffed back in?

  • Doc

    Net2Phone offers a somewhat similar system where you can use land lines to call on both sides (with a per connect and per minute charge).

    The quality is a bit miserable but cheap. Or course, if you don’t have a high speed connection, you’ll need to shell out for that.

    Expect buyout by ATT who will offer it as a “not so free” option in the future.

  • http://macaronies.blogspot.com Mac Diva

    Joe said something substantive! Way to go, dude.

    The catch with VoIP is that both parties have to have the same software. You also must know the other party’s IP number. And, his computer must be on and not firewalled. So, don’t throw out your real phones yet.

  • http://w6daily.winn.com/ Phillip Winn

    MD, you’ve been told this before, but I’ll say it again: this is not ‘Joe’ from Blogcritics comments (url: http://shortstrangetrip.org/), it’s ‘bookofjoe’ (url: http://bookofjoe.livejournal.com/, picture in blogad strip at left) who is known in real life as ‘Joe,’ and who contributes substantive information on a regular basis. Please try to keep them straight – there are two people named Joe.

    Also, your information about VoIP is slightly inaccurate. Perhaps for Skype specifically your comments are all true, but I use VoIP for my home telephone service (Vonage.com), nobody has to be running any software, I don’t need to know anyone’s IP number, etc, etc, etc.

    For that matter, iChatAV from Apple doesn’t require you to know an IP number and does a decent job burning through many firewalls, though some of your other comments still apply.

    I use VoIP at work, too, a 3Com NBX system, and I similarly deal with pphone numbers and extension numbers, not IP addresses. There are serious firewall issues with the NBX system, though.

    VoIP is a big thing, and Skype represents only a small portion of it. For that matter, all computer-based software solutions conbined represent only a portion of VoIP.

    Cheers!

  • http://macaronies.blogspot.com Mac Diva

    I think you should write more about your positive experience with VoIP. The drawbacks I refer to above are what is keeping those of us who know about the procedure from becoming really enthusiastic. As they are ironed out, I believe VoIP will become more useable.

  • http://w6daily.winn.com/ Phillip Winn

    Good suggestion, MD. Besides, Skype keeps getting all of this free press from bookofjoe, and Vonage is a far better value proposition in my opinion, so I suppose I should spread the love.

    I’ll write up a review on Vonage soon, warts and all. Right after I review Luther, and the stack of books that keeps getting taller and taller and …

    Thanks, MD. For everything.