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Is Skype the, an or no answer?

By Scott Bradner

Skype, well rhymed with "hype," has come to town. Over the last month or so it seems just about every major newspaper and trade journal has had at least one article on this latest kick in the pants from the folk who brought the world Kazaa. Last time they planted a good one on the posterior of the music industry and this time they are aiming at a very tender spot in the anatomy of telephonis gigantis (the traditional phone companies).

For the inattentive folks out there Skype (www.skype.com) is a peer-to-peer phone overlay network that runs over the Internet. The Skype beta software has been downloaded about 3 million times since they made it available at the end of August. With this software anyone with a PC running Windows 2000 or Windows XP can talk with other Skype users anywhere in the world, even those behind network address translator (NAT) boxes. Skype uses proprietary software and is not supported on any other platforms, nor can it connect to the traditional phone world where there are some 2 billion phones. Skype says they will support some other platforms in the future and will be setting up a way to call normal phones and non-Skype IP Phones in the future. The software and service is currently free but new functions like calling normal phones will cost money if you want to use them. Skype phone calls use the microphone and speakers in the PC or you can buy a headset. There is currently no way to plug your regular phone into your PC to use Skype.

They claim that the voice quality is better than regular phones as long as you have enough bandwidth -- higher dial-up connections are OK as long as you do not try to do anything else at the same time but using the service over a broadband connection is a better idea. Some reporters say they are right about the quality. I cannot say one way or another since the Software will not run on my Macs.

It is hard to say if Skype will be as important in shaping the future of telephony as Kazaa looks like it will be in reshaping the music industry. Regulators could try to close it down tomorrow or the cable and telephone companies who bring you broadband Internet services could mess up these services just enough to make Skype calls sound bad. Skype says that they had 100,000 simultaneous users by late October but that is a very small drop in the telephone ocean.

The Boston Globe reported that some stock analysts described Skype as "a giant meteor hurtling on a collision course" with the incumbent phone companies. It would take a quite giant meteor indeed. I trust these analysts were not ones who told their clients to buy Enron stock in days gone past. Other analysts seem to be stuck in the phone mentality that says that Skype cannot actually work because the Internet does not have any quality of service guarantees.

I expect the truth is in between somewhere. Skype and the many other companies that can support "free" phone calls over the Internet will, at the very least, give us pundits something to talk about for a while. Keep in mind that telephonis gigantis is a hard beast to kill -- just ask the dead bones of hundreds of CLECs.

disclaimer: Harvard has museums full of the dead bones of things that failed Darwin's testing but the above pundit fodder observation is my own.