mocoNews - Skype's iPhone App Sparks Wireless Net Neutrality Debate

Carriers on both sides of the Atlantic have reacted predictably to the roll-out of Skype's iPhone application last week, fearing that the service will eat into their already declining voice revenues. In the US, iPhone distributor AT&T (NYSE: T) has restricted its use over Wi-Fi networks while in Germany, the gadget's exclusive carrier partner has said it has banned its use.

AT&T public policy executive Jim Cicconi said it all when he told USA Today that the carrier has "every right" not to promote the services of a wireless rival (Skype), and that they "absolutely expect our vendors"?i.e. Apple?"not to facilitate the services of our competitors." If that wasn't clear enough, he added, "Skype is a competitor, just like Verizon (NYSE: VZ), or Sprint (NYSE: S), or T-Mobile."

But now two groups, one in the US, and one in Europe, are pressing regulators to come down in favor of VoIP applications on mobile. In the US, net neutrality advocacy group Free Press has asked the FCC to investigate whether Apple (NSDQ: AAPL) and AT&T are acting unlawfully by restricting the use of Skype's application to Wi-Fi networks. The group wants the FCC to clarify and confirm that net neutrality laws extend to wireless networks, or as the group's policy council Chris Riley said in a statement, "The FCC must make it crystal clear that a closed Internet will not be tolerated on any platform."

In Europe, special interest group Voice on the Net (VON) Europe asked European policymakers to adopt laws that ensure consumer can access internet calling services on any public network, according to Reuters. The group, whose members include Skype, Google (NSDQ: GOOG), Intel (NSDQ: INTC) and Microsoft (NSDQ: MSFT), are arguing that carriers who block VoIP applications are restricting consumer choice.

Meanwhile, Skype has shot up to the top of the list as the App Store's number one free app. Will consumer demand force the carriers to eventually accept their role as wireless ISP's? Computerworld argues that its just a matter of time and that AT&T could start off by offering data only monthly plans.

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