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iPhone Skype Restrictions Spark Controversy

Apr 6, 2009 | Parker Waichman LLP

A consumer advocacy group is questioning restrictions faced by iPhone users who want to take advantage of a new Skype application.  Skype is  a Voice over Internet Protocol (VoIP) application that competes with AT&T's own voice service.  Since its release last week, Skype's free iPhone service has become one of  the most popular downloads at Apple's iPhone software store.

By using Skype, iPhone customers should be able to sidestep AT&T, allowing them access to cheaper voice plans that offer fewer minutes. iPhone users can also save money on international calls by using Skype.

But AT&T and Apple have restricted access to Skype.   It can't be used on AT&T's high-speed 3G wireless network. Apple, which has an exclusive deal in the U.S. with AT&T, says iPhone users can use the Skype service only at Wi-Fi hot spots.  Before Skype could offer its application at Apple's on-line download store, it had to agree to these restrictions.

Free Press, a group that has long-advocated net neutrality, has sent a letter to the Federal Communications Commission (FCC) asking it to determine whether or not the restrictions imposed by AT&T and Apple are a violation of federal law.  In its letter, Free Press cited the FCC's Internet Policy Statement which holds that  "consumers are entitled to run applications and use services of their choice" in order to "preserve and promote the open and interconnected nature of the public Internet."  Those guidelines, which aren't formal rules, say carriers should let subscribers have access to any legal Web content or service they choose as long as it doesn't harm the network.

For its part, AT&T is defending its Skype restrictions.  After the launch of the Skype iPhone application, AT&T's top public policy executive said in an interview with USA Today that the company has every right to block Skype. As far as AT&T is concerned, Apple is expected not to promote or facilitate the services of AT&T’s competitors, the executive said.

According to a report on, how the FCC responds to Free Press' concerns could have far-reaching implications not just for the future of VoIP, but in terms of what restrictions mobile operators can legitimately put on the use of their networks, which also may have impact on peer-to-peer programs, live video, and other services.

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