
Skype lies, breaks "Skype-to-Skype"calls are free promise - evanwolf
http://skypejournal.com/blog/2010/05/30/skype-lied-iskype-3g-breaks-skype-to-skype-calls-will-be-free-promise/
======
Yaggo
Not fair. I pay my operator a monthly fee for mobile data (10 € for unlimited
384 kb/s including two SIMs / devices, to be exact). Skype pays for their
incoming/outgoing data – it doesn't cost extra for them whether the data is
originated from mobile network or <any-type> network. Skype is simply not
justified to charge extra based on client's connection type, not even if I
used Iridium network to route my bytes to them. Maybe Skype has grown big
enough to behave as asshole and they know it.

~~~
sjs
Skype-to-skype is cool but when you're tethered to a computer and internet
connection it clearly has limited to value to most people.

Now that phones that run apps and have internet connections are popular the
game is changed entirely. They _had_ to give it away for free before because
it wasn't as useful. When you can use this on the go it becomes much more
useful and they will see many more people using it.

When things change that drastically sometimes you have to re-evaluate your
business model.

~~~
Yaggo
Then moneytize transparently, i.e. based on true costs. Charging for skype-to-
skype calls is fine as long as clients are treated equally whether they were
using dial-up, wifi, satellite or avian carriers. The type of client's
connection is as unrelated as the color of his/her socks.

~~~
hartror
People always seem to think that things are priced according to the cost to
the supplier, that is wrong. Goods and services are priced to what the
consumer will pay for them. Skype are providing a service and people are (they
hope) willing to pay for the convenience of having it on their phone. Welcome
to the free market.

~~~
philwelch
You're both wrong--and rehashing an old argument that got resolved a long time
ago. Goods and services are priced based on _both_ the supply side and the
demand side, specifically upon the intersection of the supply and demand
curve.

~~~
qq66
Not in a monopolistic environment, which due to Skype's strong network effect
it may effectively be. The concept of a demand curve depends on multiple
suppliers with different reservation prices.

~~~
philwelch
No, there's still a demand curve. A monopoly has the power to set a vertical
supply curve wherever they want (i.e. at the profit maximizing point) but the
demand curve is still simply the demand curve.

~~~
qq66
Yes sorry, meant supply curve.

------
stellar678
This probably has to do with whether or not a device is able to participate in
Skype's p2p call routing. If being on 3g introduces too much latency or has
too limited bandwidth to contribute in the network, then each client will have
a marginal cost to Skype. Maybe they're trying to ensure they can keep up with
that.

Or maybe they're just grubbing for money.

~~~
gsiener
Interesting point. Though I thought I read recently that their planned switch
to SIP would end p2p functionality.

------
iamdave
I'm intensely curious who's pulling the strings behind this, is Skype really
to blame or is it the mobile carriers putting pressure on them to collect more
ARPU by creating yet _another_ fee to collect from subscribers.

~~~
sukuriant
my bet is on the mobile carriers putting pressure on them, especially AT&T.
The last I checked, Skype was still plenty free for Verizon. In fact, it
seemed like Verizon and Skype took time to make sure their system worked
wonderfully together, forcing local calls to go through Verizon themselves,
international to have the option of going through Skype, and Skype to Skype
going through a special phone number. In fact, I just tested Skype on my
Motorola Droid on Verizon's service. It works wonderfully and said nothing of
a soon ending of the free service.

~~~
jonknee
If it was the carriers, Skype had all the hand--no one wants to hear that
their carrier wants to make you pay more money. They could have announced that
carriers were looking for ways to try and get you to pay but that Skype told
them they wouldn't play ball. Instant win.

This stinks of a money grab on Skype's behalf.

------
evanwolf
Skype will break its freemium promise to Skype users in three months. Skype
for iPhone will require a subscription to make Skype-to-Skype calls over
3G/Edge starting in September 2010 according to Skype. This changes things
from "Skype-to-Skype calls are free", which they've been saying since launch,
to "Skype-to-Skype calls are free over landlines and Wi-Fi unless your Verizon
or Three mobile operator subsidizes your service."

Skype has no marginal cost if I make that iPhone 3G call. Why are they
charging separately?

Presumably subscriptions will apply to future use of Skype-to-Skype on
Blackberry, Nokia, and Android phones.

~~~
stcredzero
_Skype has no marginal cost if I make that iPhone 3G call._

If I were AT&T and I could start charging Skype for 3G calls, I would do it.

~~~
ericz
Shouldn't net neutrality prevent AT&T from charging more just because Skype
uses a certain part of the internet?

~~~
sukuriant
This isn't a net neutrality issue. This is a 'people are circumventing our
system through our system and we need to stop them', as well as a "our
networks are HEAVY LADEN with traffic because of all these smart phones we
didn't quite have the infrastructure to support. We need to start clamping
down a little" issue (I imagine)

~~~
masklinn
> This isn't a net neutrality issue.

Of course it is. Packets should be packets, if you don't have the network to
handle the packets, lower caps or raise prices, don't start making people pay
based on the kind of packets they send or receive. It is precisely a NN issue.

> " We need to start clamping down a little" issue (I imagine)

"Clamping down a little" is not a problem, "clamping down on
(VOIP|Gaming|long-lived downloads|P2P streams)" is

~~~
sukuriant
> if you don't have the network to handle the packets, lower caps or raise
> prices, don't start making people pay based on the kind of packets they send
> or receive.

> "clamping down on (VOIP|Gaming|long-lived downloads|P2P streams)" is

P2P streams and long-lived downloads have two major things in common: heavy
bandwidth over long periods of time. Those activities, in particular, are
considerably heavier on the network than, say, downloading a single, or even a
series of webpages.

One way the major carriers can do this is by disallowing certain kinds of
activities. For example, as seen on the iPhone, users are not allowed to
download files more than 10MB in size. That isn't a case of "what" a person
can download, but instead an issue of "how much" a person can download in a
small period of time. Is that still 'net neutrality'? And, if not, then how is
VOIP any different?

(This is under the presupposition that the price increase was ATT's doing, and
they're not doing it because it's taking away from their profits; but instead
they're fearing that VOIP will cause an even greater tax on their already
strained network.)

~~~
masklinn
> One way the major carriers can do this is by disallowing certain kinds of
> activities.

> Is that still 'net neutrality'?

If you disallow specific network activities, yes it's a network neutrality
issue.

> users are not allowed to download files more than 10MB in size

I do not believe that is correct. The AppStore application is configured to
not download applications over 20MB (up from 10MB since February) over 3G, and
the iTunes application does the same thing for music or podcasts, but that's a
setting at the application level. I don't think e.g. Safari refuses to
download files more than 10 (or 20) MB, or that the connection cuts off with a
corrupted file.

> That isn't a case of "what" a person can download, but instead an issue of
> "how much" a person can download in a small period of time.

No, because again you're disallowing specific activities (e.g. VOIP, P2P) not
certain network behaviors (data streams of over 1MB for over 10mn for
instance). Therefore your network management is about activities (traffic
shaping) not resources (resources management) which makes it an NN issue.
Because you're arbitrarily preventing the users of the network from performing
specific activities even though the network itself can handle them.

> This is under the presupposition that the price increase was ATT's doing,
> and they're not doing it because it's taking away from their profits; but
> instead they're fearing that VOIP will cause an even greater tax on their
> already strained network.

I don't believe that for a second, but again if the issue is resources, then
write policies in terms of resources, not activities.

------
neonfunk
From Skype's perspective, how is the cell network different from any other
ISP? It's the carriers who will shoulder the burden; and there's no indication
that any of the fee is going to them, given that Skype says "operator fees may
still apply". I don't get it.

~~~
viraptor
It's many times more useful to use Skype on your mobile. If you're on 3G, it
means you have no access to desktop Skype. And if it's more useful to you,
they can charge for it.

~~~
neonfunk
The extra usability is a function of the carrier's network, not anything on
Skype's end. And since many of us are already paying our carriers for data
plans, why should Skype arbitrarily charge us a second time? I still don't get
it.

~~~
viraptor
It's pretty straightforward and not very "nice":

> _why should Skype arbitrarily charge us a second time?_

1) because they can; 2) who's going to stop them (definitely not carries who
gain on that agreement)

~~~
neonfunk
No one's going to stop them from doing what's within the law; that's a given.
I'm saying it strikes me as unethical, and it assumes a certain infancy in the
public's tech acumen... which perhaps there is! But it still seems like a poor
assumption to base a business on going forward.

Now I'm just hoping someone comes out with a iChat/AIM/Jabber/GTalk-like P2P
standard for voice (does this already exist?).

~~~
viraptor
Not sure about iChat and AIM, but GTalk already uses an XMPP-based protocol
called Jingle. Theoretically you can use it between any 2 jabber clients which
support it.

------
paul9290
Upon seeing this I am contemplating canceling AT&T service - keeping my iphone
and get a Verizon or Sprint MiFi router and use Skype to place the calls, as
well use my Google VOice number to ring my skype in number. I use my GV # now
anyway so I can just forward it. I dont talk on the phone that much more so
text, facebook, email and twitter.

Im not sure im going to do this but it's tempting even more when skype will be
able to run in the background on my 3GS when 4.0 comes out. I would save
myself $10 to $20 a month doing this. THe MiFi I can carry in my wallet.

------
stretchwithme
was it a promise to be free forever? or just one of their features, which they
are free to change whenever they wish?

~~~
milkshakes
<http://www.skype.com/intl/en/security/safety/safe-payments/>

_Skype-to-Skype calls will always be free_

~~~
stretchwithme
yep, it does say that quite clearly

------
riobard
I'm wondering how long Skype calling in fring
<[http://www.fring.com>](http://www.fring.com>); will remain for free.

------
loyaltyspace
What a sensationalist headline.

So what if they've introduced charges? If someone else provides this for free,
go there. If not, cough up!

~~~
arbitraryperson
But they gave me their word!

~~~
OoTheNigerian
where?

~~~
Frazzydee
It still says so here: <http://www.skype.com/intl/en/security/safety/safe-
payments/>

"Skype-to-Skype calls will always be free but there are a few things that cost
a little such as calling mobiles and ordinary phones when you want to get hold
of your friends that havent started using Skype yet."

~~~
OoTheNigerian
Ok. That's much better. When people maike claims, it is always good to put
evidence. The discussion would have been different if that was put there.

But I believe charging is the only was that network operators will allow Skype
to work at all. It would be good if they explained it that way.

------
cookiecaper
I guess I don't think it's that big of a deal. When Skype promised "free
Skype-to-Skype", I don't think they considered that they would eventually be
used on smartphones. It'd probably be smarter if they'd just charged a few
bucks from the app first place, though.

This may also be a condition imposed by Apple, because people with unlimited
data plans would use Skype instead of their (limited) included airtime, which
I'm sure doesn't make cellular partners too happy.

~~~
jallmann
But does Skype via 3G actually cost them more than a WiFi call? Assuming their
calls still use the data network, it's not like they have to buy and maintain
gateway equipment. I don't see how the smartphone issue is relevant.

I agree though, that this move may be more political than anything else w.r.t
cellular partners.

~~~
jonknee
It doesn't cost them anything more, but I bet it means more usage. It's a lot
easier to have Skype always in your pocket than just when tied to WiFi. I
think they foresaw a future when data-plan only phones make all their calls
"for free" through Skype.

------
dc2k08
When I bought my last phone nearly three years ago, the selling point was that
pre-installed skype app worked for free over their 3G network and skype to
skype calls were free. Skype out calls were barred though. I presume this new
charge only applies to iphones? If it is the case that Apple badgered them
into applying a charge which some are suggesting, I presume this information
will leak at some stage. Won't be good PR if true.

~~~
bbatsell
I can think of absolutely zero reasons, technical or otherwise, that Apple
would _want_ Skype to charge for only its iPhone software, much less a reason
strong enough to "badger" them into charging. Isn't it far more likely that
Skype's new buyers see that they need to begin to monetize their largest usage
stream in order to survive, especially since that usage stream has started to
migrate to more "usable" platforms?

------
moolave
Somewhere, some company will level the playing field on this feature. It's
happened to phone companies, why not on this app?

------
pixelcort
Does this have anything to do with a potential difficulty in establishing
direct connections between Skype clients that are both on 3G networks? Are
they running relays for these clients that they are trying to recuperate from?

------
ephealy
I was already considering a full jump to Google Voice. This may seal the deal.

------
adrianscott
I think they started lying earlier when they offered 'unlimited' that isn't
really unlimited, but subject to a so-called fair use policy. I would call
that 'virtually unlimited'. FTC, where are you??

------
johnrob
I lost any trust for Skype the first time they emailed me that I had 7 days to
use some credit or they would confiscate all of it. How is that not theft?

~~~
pdx
That was discussed here, probably when you brought it up last time. It's the
same reason that gift cards expire and properly written NDA's have time
limits. Nobody wants to owe somebody something until the universe dies,
especially accountants, and especially if the people to whom that debt is
owed, are dead or have forgotten about it. It would be insane to carry it on
your books until doomsday.

~~~
mr_november
I disagree with this, it's entirely possible for vendors to honour gift cards
(and credits) indefinitely. In fact, here in Canada, in most provinces, if not
all, it's law and has been for some time:
<http://www.gov.on.ca/mgs/en/News/133713.html>

~~~
jws
The problem comes in the accounting. Try borrowing X million dollars against
2X million in assets when you have 4X outstanding debts that can be called in
at any time. Sure, they probably won't be, and you might discount them to near
zero, but the lender won't be so generous.

~~~
freakwit
But in the sale of the gift cards/credits, at a 1:1 exchange rate, your assets
would increase as well as your debt, surely?

~~~
jws
Sure, at the time of sale. But you will spend/disburse the money you receive
in short order and be left with a looming debt on your balance sheet.

~~~
dedward
Exactly.... I actually found Skype's way of handling this to be far more fair
and less predatory than most - not only were they generous with the expiration
date, but they insisted you only had to log in and place a single call (spend
a penny or so) to keep it going another 6 months, or whatever.... it's just
keeping dead liabilities from accumulating... and skype was NICE about it,
sending me all those notifications.

------
RabidChihuahua
Skype mobile is really a different kind of product. If they want to charge for
it they are entitled. Phone calling is getting cheap enough as is.

------
bdfh42
Skype not playing honest with their customers? Hardly news is it? I dropped
them several years ago because of basic dishonesty on their part.

------
cabalamat
I'm not bothered by this, because it's their funeral. There are other VoIP
programs, it's not particularly difficult to write one, and with Android set
to dominate open-architecture 3G phones, something else will dominate VoIP.
Hopefully, something open source and using an open protocol. (SIP?)

Oh and if you bought an iPhone and can't access the cost-free VoIP solution?
That'll teach you to buy locked-down hardware, you idiot[1].

1: this description does not apply to people who took an eyes-open decision to
buy locked-down hardware, knowing it was locked down, realising the
consequences and accepting them.

~~~
rmc
It's not easy to create a competitor to Skype.

Skype's main attraction is not the technology, but the network effect and it's
closed system. You could make a cool SIP client for Android/iPhone/etc. but it
wouldn't matter because you wouldn't be able to talk to 90% of the mundane's
who only have Skype.

~~~
alex_c
Skype's network effect and lock-in is extremely small compared to something
like Facebook, or even something like an IM network.

Think about it: early adopters (techies) start using a free competitor (or
several free competitors). They get their less tech-savvy friends and family
to switch. The rest of the world follows. It's easy to explain ("It's like
Skype"), the carrot is obvious ("except it's free"), and the lock-in is
minimal - download a new client, enter the contact you want to call, and
you're done. There's no chat history, or complex social network, or tons of
uploaded pictures, etc. etc., to keep people from switching.

I don't think the "mundanes" really use Skype, they still use regular phones.
If someone's savvy enough to use Skype, they're savvy enough to switch to a
free competitor if it's good enough.

~~~
amix
Last time I checked Skype's user count was above 500 million and they have 50+
million daily active users. Their network effect is pretty huge.

~~~
alex_c
That really depends on the average size of someone's network. How many
networks are only composed of 2-3 endpoints? (most common example - talking to
family "back home"). Compare to Facebook's 100+ average network size.

