Getting past curses

In baiting a mousetrap with cheese, always leave room for the mouse.Saki (Hector Hugh Munro)

Dear Vorticians,

A life-long Boston Red Sox fan, I have spent the waning weeks of summer and the early days of autumn listening to seemingly endless talk of curses – in specific, the Curse of the Bambino which, we’re told, has kept the Sox from winning a World Series for 85 years.

Some Vorticians who reside in the vicinity of Silicon Valley may feel that the curse has, in fact, been exorcised from the Sox only to take up residence in the body of the Oakland A’s, who’ve been haunted by their inability to win clutch games in the post-season. (Could the curse also have jumped to the Giants?)

I have to be careful here because the Sox still have a long way to go and a gaggle of pinstriped multi-millionaires to get through before they hit the World Series. But Red Sox Nation is feeling a lot more excited and a bit less cursed these days. How are you feeling?

Speaking of curses, the peer-to-peer file sharing service known as KaZaA has been on the receiving end of many foul utterances from those who hold the copyrights to music and other content. Well, the founders of KaZaA are back at it, this time combining voice-over-IP and P2P technology to let people make free phone calls over the Internet.

The service is known as Skype and you can find out more about how it works at https://www.skype.com/skype_p2pexplained.html . Basically, you download the Skype client and you can talk for free to anyone else who has it. The company claims that more than 1.1 million downloads have happened already, and it says the voice quality is “better than your regular phone.”

Is this another industry-threatening revolution in the making? The founders are envisioning it as such. Calling Skype the first 21st-century phone company, they say: “Our vision is to . . . challenge the outdated business models and rip-off tactics of legacy telecom companies and to bring global unmetered communications to people all over the world. We will achieve our vision by building a user-driven P2P network leveraging emerging disruptive technologies.”

No argument about the disruptive nature of P2P – at least in the form of KaZaA and Napster. And Skype isn’t alone in worrying about that disruption. Federal Communications Commission Chairman Michael Powell said in a recent CNET interview that “what (VoIP) is going to do is start to weaken the foundation of the way we’ve done things for 100 years.”

Indeed it will. This week, a federal judge told Minnesota regulators that they can’t apply traditional telephone company regulations to VoIP phone service provider Vonage, which we’ve discussed in this newsletter. That appears to be a nice victory for VoIP providers and a setback for beleaguered telephone companies caught in a pinch between these emerging competitors and others, like the cable companies.

(On the cable front, however, the telcos may have caught a break recently. An appeals court said that the FCC was mistaken in classifying cable companies as “information services” providers solely, meaning cable might be subject to more regulatory oversight – maybe even requirements for line-sharing.)

The other evening, a colleague waxed enthusiastic about Vonage and its cheap VoIP service. Others at the table pressed for details and ooohed over the savings and cool features. It was exactly the kind of word-of-mouth advertising the company touts in its television ads. Exactly the kind of thing that should terrify the telcos.

That’s it for now. If you’ve used Skype or have any thoughts on the VoIP threat, send ‘em my way. E-mail to jgallant@vortex.net.

Thanks.