Cloud & Telecom Security

At a previous post, “Skype’s road to China“, I introduced my view point of Skype at China, not bright as they are at other lands, due to the restrictions of the regulations and market circumstances. Along with the emerging technology/product from Verso, the “blocking of PC-to-phone”, ie. SkypeOut, was reported to be blocked at Shenzhen and other three cities at China.

A lot of report titiled “Skype-blocked at China” were headlined at many of world famouse relevant newpapers and journals. That kind of activity was even regarded as “bureaucratic politics” by Clark, managing director of BDA China.

The blocking of SkypeOut calls from Shenzhen started several days before Verso announced on Sept. 14 the availability of the NetSpective M-Class application filter, which the company billed as “carrier-grade Skype filtering technology.”

While Verso said in its release that the use of Skype is illegal in China, the situation is more nuanced.

Chinese government officials have been generally tolerant of VoIP software, such as Skype, that is used to make calls from one PC to another. But the ability of Skype users to make calls to a phone via the SkypeOut service is more sensitive, because this directly affects the revenue that operators such as China Telecom earn from international phone calls.

On the one hand, the Chinese government owns the carriers and will act to defend their interests, said Duncan Clark, managing director of BDA China, a telecommunications consultancy in Beijing. However, the Chinese government also wants to see the price of making phone calls come down, he said.

“It’s a question of bureaucratic politics,” Clark said.

It’s well known that Skype is different from Vonage, the latter is protected at USA as a VoIP service provider according to the FCC regulations, while the former is not. Because Skype makes money from network infrastructure of other telco companies without any revenue sharing or settlement mechanism.

At China, PC-to-Phone and Phone-to-Phone VoIP services are restricted to be “basic telecom service”, allowed to only a few state run telco companies. Althoug foreign companies will get more penetration opportunities along with WTO openness of telecom market, that would not benefit Skype, unless Skype succeed in transformation to a more transparent and open technology, e.g, communication protocol, key management, billing data output, interop with SIP, and etc.

It’s obvious that Skype represent a killer technology to provide voice and video services at a very lower cost (of course, not zero like what Skype spend on their services). It’s the responsibility of the government (in China, it’s MII) to represent consumers to force the service providers to make use of advanced technologies at the possibly earliest time (if they won’t, new licenses will be issued to other providers). But, as to China Telecom, China Netcom, and other service providers, they won’t give up their monopoly privileges currently have unless they are forced to. So “blocking skype at China” is only a tactic action to prepare themselves for the uncertainty of the future regulations.

The differences between PC and “Phone” are becoming more and more obsecure, so it will be more and more difficult to distinguish “PC to PC“ against “PC to Phone”. That’s why I suggest Skype’s road to China lies at penetrating into those handheld devices with WiMax, WiFi, GRPS, 3G wireless link.