Skype's iPhone limits irk some consumer advocates

ByABC News
April 2, 2009, 11:21 AM

— -- "Consumers will pay the price for AT&T's blocking," says Chris Murray, senior counsel to Consumers Union. By using Skype on the iPhone, consumers can sidestep AT&T, allowing them to get by, potentially, with cheaper voice plans that offer fewer minutes. Consumers can also save a bundle on international calls.

Technically, the limitation on Skype and other Internet phone companies is imposed by Apple, which has similar arrangements with other carriers.

Apple spokeswoman Jennifer Bowcock says the company "has always said" that Internet phone applications for the iPhone and iPod Touch would be limited to Wi-Fi but declined to elaborate.

Jim Cicconi, AT&T's top public policy executive, says AT&T has "every right" not to promote the services of a wireless rival.

"We absolutely expect our vendors" Apple, in this case "not to facilitate the services of our competitors," he says.

Murray says logic like that "highlights the urgent need for Congress and the Federal Communications Commission to clarify that the wireless Internet will be open just like the regular Internet." Unlike the land-line business, wireless is largely unregulated. The loophole owes to the origins of wireless, which began decades ago as a high-end business service.

Now that millions of consumers are cutting the cord and going wireless, it may be time to revisit some of those rules, says acting FCC Chairman Michael Copps. "In the fast-changing world of technology, you have to constantly revisit the rules and regulations to make sure they're in accord with the real world."