News Blog

Internet calling provider Skype said Tuesday that it has hired Scott Durchslag, a former Motorola executive, to become its chief operating officer.

Durchslag spent more than five years at Motorola where he was most recently corporate vice president of global product and experience invention for the mobile devices business unit. Skype said that while in that position Durchslag "led product strategy, innovation, intellectual property, design, user interfaces, consumer experiences, partnerships, product marketing, and customer care."

The fact that Durchslag was in charge of "strategy" and "innovation" for Motorola's device business at a time when the company lost significant market share to competitors, because it lacked innovative and compelling handsets, isn't exactly a ringing endorsement. Motorola's poor handset performance led to the ouster of former CEO Ed Zander and a planned spinoff of the mobile device unit.

That said, Durchslag had some significant successes at Motorola. He helped strike deals with Google, Microsoft, Yahoo, and Kodak to bring new services to Motorola's mobile devices. And in a previous role at the company, he was in charge of Motorola's South Asia region where he was able to build a business with the highest margins for Motorola, according to the Skype press release.

When he joined Motorola in 2002 as chief strategy officer of the Personal Communications Sector, he helped develop the turnaround strategy that doubled market share and revenue for that part of the business between 2002 and 2007, Skype also said in a statement.

Josh Silverman, who was named Skype's president in March and will be Durchslag's new boss, is confident that his new charge will help Skype innovate and bring new services to market.

"Scott has an outstanding track record and will be able to help us apply best practices in staying ever more customer-focused and nimble, even while becoming larger," he said in a statement.

Skype provides free and low-cost voice, video calling, and instant-messaging services over the Internet. The company was acquired by eBay in 2005 for $2.6 billion. And even though it is by far the most successful voice over IP services company in terms of users with 309 million registered users worldwide, it hasn't been a financial success for eBay. In fact, last year, eBay took a $900 million so-called impairment write-down against the value of Skype. In essence, the company admitted to shareholders that it has taken a loss on its original investment.

Still, eBay is determined to make something of its investment. Mobile is likely the next frontier for Skype. And Durchslag's experience could help the company come up with a viable strategy. I guess we'll have to wait and see.

T-Mobile USA plans to announce Wednesday that its new @Home voice service will be available nationwide starting July 2.

The cell phone operator has been testing the new Internet telephony service since February in Dallas and Seattle. And now the new service, which is meant to replace traditional home phones, will be offered to any T-Mobile cell phone customer.

Subscribers will be able to connect any regular home telephone to a T-Mobile router that will send calls over the Internet much the same way as services like Vonage operate. The service costs $10 a month plus taxes and fees for unlimited domestic local and long-distance calls.

Only T-Mobile wireless customers who subscribe to at least a $39.99 individual calling plan or families subscribing to at least the $49.99 monthly T-Mobile calling plan can get the service. The @Home service also requires that users subscribe to a separate broadband service from a cable operator or telecom provider. And they are required to use a special T-Mobile router, which also provides Wi-Fi Internet access throughout the home.

This router can also be used to provide T-Mobile's HotSpot @Home phone service. This service, launched last year, allows T-Mobile subscribers to use dual-mode cellular and Wi-Fi phones that switch between both networks. When subscribers are near their home Wi-Fi hot spot, they use the broadband network to make unlimited domestic calls. And when they are outside the home, the phone seamlessly switches to T-Mobile's cellular network.

The service, which also costs $10 extra per month, serves two purposes. It helps provide better in-home cell phone coverage and also helps reduce the number of minutes used on the T-Mobile cellular network.

Britt Wehrman, director of product development for T-Mobile says the service, which launched a little over a year ago, has been a big success. The company hasn't disclosed subscriber numbers for the service, but Wehrman said that 45 percent of the hot-spot customers are leaving competitors to get the T-Mobile service. T-Mobile currently has eight dual-mode handsets that work with the service, two of which were announced earlier this week. And it has four more to announce by the end of the year, bringing the total to 12 dual-mode handsets.

The @Home VoIP (voice over Internet Protocol) service is meant to work with the hot-spot phone service, Wehrman said. When the hot-spot service was first introduced, the company found that families were interested in the plan. But they weren't willing to cut the cord on their home phones.

"The hot-spot service offers parents a good way to limit overage charges, because the kids can talk on their cell phones while they're at home without eating up minutes," he said. "But we found that many families didn't want to get rid of their traditional phones. They still wanted one phone in the house for the whole family."

So the @Home VoIP service was created to give families who don't want to get rid of their traditional landlines a low-cost option for retaining that line while still using the hot-spot service. To ensure that E911 service works with the VoIP service, T-Mobile is requiring all users to register their home address before service can be activated.

But because it is an Internet-based phone service that is dependent upon a broadband modem for connectivity, families will still have to consider the risks of power outages and Internet interruptions that will make the VoIP service and E911 unavailable during those outages. But Wehrman said that the fact that T-Mobile requires that subscribers of the @Home service also have a T-Mobile cell phone subscription limits the safety concerns.

It's been a while since a major Skype release, and on Wednesday, the eBay-owned VoIP communication service will issue the first of several planned version 4.0 beta builds for Windows that are anticipated to drop over the next few months.

The biggest changes to come with Skype 4.0 beta (download) are visual and organizational. For the first time, the program contains complete prompts for running sound and Webcam checks within the program set-up. After two failed tests buffered by common troubleshooting suggestions, Skype will recommend hardware--like headsets and a Webcam--to reverse incompatibility errors.

(Credit: Skype)

Redesigned interface
Skype 4.0 beta's redesigned interface may also get you blinking. Compared with its stable cousin, the new Skype beta's GUI has overflowed its banks, replacing tabs in the once-narrow interface with a second pane tacked on to the right. Four or five functions are flattened into this single window in an effort to make communications other than the voice chat staple easier to find and use. To wit, there's an IM bar deposited at the bottom of the communications pane and large buttons that prompt voice and video calls. Video calls are large by default, filling the program's communication activity pane.

Skype Out, the service offering competitive international rates for Skype users calling contacts' landlines instead of their computers, has also been chiseled out, by a large call-to-action button on the navigation bar. The button just below it opens a directory for finding people, businesses, and chat rooms. The toggle bar tucked away at the top switches from saved chat conversations to the contacts view, and rounds out the new additions.

Some functionality, like Skype Prime, will arrive in later builds.

(Credit: CNET Networks)

Still more to come
Though there may be a placeholder for it, not every function in this first beta is live. The shop for Skype-approved hardware, while available from Skype.com, will not be activated in this iteration, nor will be the service on real-time advice, called Skype Prime. Automatic redial, call transferring, video presentations, and integration with Outlook contacts are also scheduled for roll-out in later builds.

The spread-out interface of Skype 4.0 beta for Windows will definitely take some getting used to, especially as it abandons the client's traditionally nimble, IM-styled build. However, it does succeed in calling out a wider array of communication services. This may give the Luxembourg-headquartered company a chance to deemphasize VoIP as its core competency and mark out new territory in Internet video, collaboration tools, and entertainment services.

As ambitious as Skype's new look and capabilities are, Mike Bartlett, the program's Windows product manager, confessed during our briefing that this design and the newly introduced features will be closely monitored for user backlash. It's likely that strong feedback from Skype's 309 million registered users will leave an impression on Skype 4.0 beta continues to take shape in the upcoming months.

The "new" PSP Skype Headset

(Credit: Amazon)

When we reviewed the Sony PSP Headset a few months ago, we determined that it worked perfectly fine with the console's newly enabled Skype feature--so long as you scrounged up the accessory extension cable needed to enable the two-way communication function. The problem was that the headset didn't include the cable: you needed to buy another set of Sony headphones--the PSP earbuds--just to get the included cable. It was one of those corporate catch 22s that seems to be par for the course in the world of consumer electronics.

Thankfully, Sony has finally addressed the issue. The Sony Skype Headset Kit for PSP bundles the headset and the remote extension cable into one package, all for a tidy $30. Another advantage: the extension cable is now black instead of white, so it matches both the headset and the color scheme of most PSPs. It's available now at a variety of online retailers, including Amazon and Buy.com. For Skype users who are always toting their PSPs through Wi-Fi-friendly environs, it's a pretty good deal. Just remember that the headset--and the Skype functionality--only work on newer PSP 2000 ("slim PSP") models, not the original PSP units.

Source: Amazon via Gizmodo

Sprint Nextel and Verizon Communications both see an opportunity to make a buck on their IP telephony patents after successfully suing Vonage Holdings last year.

On Thursday, Sprint Nextel said in a U.S. District Court in Wichita, Kan., that it was suing four small phone companies. Sprint alleges that Nuvox Communication, BroadVOX Holdings, Big River Telephone, and Paetec Communications are infringing on six of its patents.

Those patents, part of a larger portfolio of patents that cover voice over IP technology owned by Sprint, are the same ones used to successfully sue Vonage. The two companies eventually settled the dispute last year. And Vonage agreed to pay Sprint a total of $80 million, which includes $35 million for past use of the license, $40 million for a fully paid future license, and $5 million in prepayment for services.

Verizon Communications, which won a $120 million settlement from Vonage last year, is also asserting its patent claims. Earlier this month the company filed a suit in the Eastern District Court of Virginia against cable operator Cox Communications for infringing on eight patents that had to do with voice over IP technology. Two of the patents in the Cox case are the same ones Verizon successfully sued Vonage for infringing.

Since Sprint and Verizon have already successfully asserted these patents, it certainly strengthens their new cases. And it's very likely the companies will either win in court or be able to pressure these companies and any other VoIP providers into licensing deals.

This is very good news for Sprint, which would benefit greatly from turning its existing patent portfolio into a cash cow. The beleaguered cell phone carrier has been bleeding customers and is in desperate need of new revenue growth to boost earnings.

Dell has entered a partnership to take to Fonality's affordable VoIP phone systems to small and midsize businesses.

This is big news for the VoIP world--and for the open-source Asterisk project underlying Fonality.

Dell will be selling the Fonality VoIP Phone System through its global SMB sales organization, as well as its channel.

Needless to say, the opportunity is huge. According to a Dell'Oro Group group analyst quoted in The Wall Street Journal (PDF), 35 million small businesses worldwide are expected to adopt VoIP calling over the next three years.

Fonality brings to the table a product designed to be easy to use and directly installable. Dell brings its market reach and brand. It's a good deal for Dell. It could be the making of Fonality.

Look at the math.

Can members of Al Qaeda use voice over Internet technology (VoIP) to avoid wiretaps?

Recent comments by Michael McConnell, Director of National Intelligence, seem to suggest that terrorists could create significant roadblocks for the National Security Agency by simply routing their traffic through the U.S.

Mike McConnell: I'll have some of what he's smoking,

(Credit: Office of the Director of National Intelligence)

The incongruously named Protect America Act of 2007 gutted the existing Foreign Intelligence Surveillance Act (FISA), and allowed the National Security Agency to significantly expand its surveillance powers. It's set to expire in February, and the Administration is looking for reasons to justify extending the law. With perfect timing, Michael McConnell, Director of National Intelligence, has come to the rescue.

An interview published in the upcoming edition of The New Yorker quotes him, stating that,

"McConnell said that federal judges had recently decided, in a series of secret rulings, that any telephone transmission or e-mail that incidentally flowed into U.S. computer systems was potentially subject to judicial oversight. According to McConnell, the capacity of the NSA to monitor foreign-based communications had consequently been reduced by 70 percent."

Conveniently enough, if Congress passes legislation to further gut FISA, the NSA will be able to resume its warrantless snooping on the terrorists, the troops will be safe, global warming will cease to be a problem, and no more puppies will have to die.

While the average privacy geek would consider an NSA wiretap of an undersea fiber-optic cable carrying millions of phone calls to be surveillance, it turns out that the law does not agree. As per the existing FISA rules, anything the NSA does outside of the U.S. does not count as electronic surveillance, and thus does not require a warrant. Thus, any wiretapping that happens in Iraq will never require approval of the FISA court, with or without any new legislation being passed.

AT&T and the NSA: best friends forever

(Credit: Electronic Frontier Foundation)

(I'm not the only one to call bs on McConnell's claims. Wired's Ryan Singel is offering a $1,000 wager that "when and if those rulings are ever released, we'll see they say no such thing." Clearly, the pay over at Wired is far better than CNET. While I can't offer the same level of money as Ryan, if McConnell does turn out to be telling the truth, I'll promise to switch my telephone service to AT&T--thus sending a little bit of money to the NSA's best friend forever.)

However, for the purposes of this blog post, let's assume that McConnell is in fact telling the truth. Let's assume that a phone call between two members of Al Qaeda in the Middle East that happens to flow through a U.S.-based server automatically kicks in a requirement that the NSA get a FISA warrant before it can listen in--even if the tap is conducted in Iraq, or under the Atlantic Ocean.

It's not surprising that this would be alarming to the NSA. In a previous interview, McConnell claimed that each FISA warrant takes more than 200 man hours to process. Were every member of the Iraqi insurgency to route his communications via the U.S., the NSA would presumably become the largest law firm in the world.

Which brings me to the point of today's blog post. If McConnell is to be believed, Al Qaeda merely needs to switch to using U.S.-based voice over IP services, and it can immediately crush the NSA under a pile of FISA paperwork. No matter where the NSA actually tried to intercept the Internet-routed phone call, a FISA warrant would be required. For $24.99 a month per terrorist, Al Qaeda could launch a gigantic legal denial of service against the folks at Fort Meade. Furthermore, now that the iPhone has been hacked to support VoIP software, the VoIP-subscribing terrorists could communicate in style.

Of course, the problem with using most commercial VoIP solutions is that phone calls flow over the wire in the clear, making it trivially easy for our spooks to listen in once they've dealt with that pesky matter of the warrant. Thus, any smart terrorist worth his salt would most likely use encrypted VoIP software, such as the uber-fantastic Zfone project, which can be had for free.

Start-up IP telephony providers Jajah and Jangl are teaming up to take on the competition, the companies said Thursday.

The companies are part of a new generation of voice-over IP providers that have crept up recently hoping to replicate the success story of Skype, which was bought by eBay two years ago for $2.6 billion. The market is already crowded with dozens of these small players. Typically at this stage of the game, start-ups are too busy duking it out against each to forge partnerships, but executives at Jajah and Jangl say it makes sense for them to partner even though some of their products may overlap.

"It is rare to see companies at this stage do something like this," said Michael Cerda, CEO of Jangl. "But it's such a confusing market out there and the press and VCs often lump all VoIP providers together. But our strategies and technologies are really very different. And when we sat down together, we realized they're actually complementary."

Jajah is focused on providing low-cost international calling. Already it has the ability to terminate calls or transfer calls from the Internet to the local telephone network in more than 122 countries around the world. Earlier this year it received funding from the German phone company Deutsche Telekom. And it has ambitions to grow into a major telecommunications platform provider in the future.

Jangl, on the other hand, is focused on providing secure phone calling for social-networking and dating Web sites. The service essentially provides alternative local phone numbers that can mask a person's actual phone number, so that they don't have to give out a personal telephone number to strangers.

But while their focuses may be different, Cerda and Frederik Hermann, director of global marketing for Jajah, say they see benefits in working together for both companies. For example, Jajah is about to launch an in-call advertising platform. The way it works is when a user is being connected to a call, he has the option of listening to a short 10-second advertisement. As a reward for listening to the commercial, the user earns credit, which can be used to defray the cost of making future calls over the Jajah network.

Jangl, which claims to be on some 40 million social-networking profiles on sites such as Match.com, says it brings an important target audience to advertisers because its service is already integrated into the media-rich social-networking world.

"Jajah brings the ads and we bring the customers," Cerda said.

Also as part of the deal, Jangl will be able to terminate calls onto the regular phone network from the Internet in all of Jajah's 122 countries. Today Jangl only offers termination service in 32 countries.

"Over the past two years, we've built a huge back-end system for terminating calls all over the world," Hermann said. "So we're able to allow Jangl to use that resource and we recover a small margin on that."

But Jajah and Jangl's main competitor Jaxtr says the companies are merely running scared. "I see it simply as the weak banding together," said Konstantin Guericke, CEO of Jaxtr.

One thing is for certain, partnerships are tough to manage no matter the size or stage of growth of the companies involved. But who knows? Maybe this partnership will be a prelude to a merger. Executives from Jajah and Jangl haven't ruled out the possibility, but they each say it's not on the table right now.

"Merging the two companies might make sense at some other juncture in the future," Cerda said. "But both companies are still so young. And they have something they want to be when they grow up. And we have something we want to be when we grow up."

Talkster has been getting some buzz from fellow CTIA-goers. The new international dialing service is offering free global calls in exchange to listening to a few ads. The VoIP-based, phone-centered service feels like the perfect Skype (download) and Pincity mashup. It's free like Skype, and also relies on a VoIP backbone, but like Pincity, Talkster makes use of local numbers to initiate mobile and landline calls.

It sure sounds irresistible, and I've read a few glowing reviews, but in actuality it's a bit tricky. Talkster members enter their number and the number they're calling, and Talkster assigns a new, local number for callers on each end of the line. Say what?

If I want to call my sister in England, I enter both our phone numbers and receive a third number in my 415 area code. That's my permanent number for the phone number I just entered. My sister will get a number for me too. If I want to catch her at home, work, and on her cell phone for free, I'll need to enter each phone number and get three separate Talkster lines.

It wouldn't be so confusing if that were all, but of course it's not. Initiating a call isn't merely the result of dialing one of my Talkster-issued local numbers. There's an order to the calling system. Let's say I initiate the call to my darling sib using a Talkster phone number. I dial the appointed number in my area code and she picks up. But we can't talk yet. She first has to hang up while I stay on the line. My sister then quickly locates her local number, and while Talkster servers do some speedy math to connect our loose ends together, we both listen to an ad. Or that's the plan as soon as Talkster's ad deals are in place.... Read more