Defining a Phone Company in the Digital Age

by Jeff Wiener on March 14, 2013

Oh for the days of old when it was easy to define a phone company, it was the friendly business down the street that ran the telephone wire into your home or office. But now that the digital age has left the old analog line in the dust and alternative video and voice solutions continue to proliferate, distinguishing who is and who isn’t a telecommunications operator has become markedly more difficult, evidenced no more so than by the controversy in France surrounding the popular Voice-over-IP service Skype.

In a report issued by the New York Times, French telecom regulator, an entity known by its French acronym Arcep, said Tuesday that it has asked federal prosecutors to investigate Microsoft’s Skype division over its repeated failure to register as an official telecommunications operator in accordance with French law. While such regulation is not asking permission to operate in the country per se, it demands “prior declaration” because being an official French telecom incurs additional responsibilities.

On a larger stage, this story certainly sparks debate over what constitutes a phone company in this modern digital age and where VoIP fits into this ever-changing picture. Should telecom regulations extend to Microsoft’s Skype, it won’t be long till other communication entities like Facebook suddenly find themselves reclassified as your new phone company as well.

For those unfamiliar, Skype and other similar phone services utilize a system called voice-over-Internet-protocol (VoIP), one that enables voice and video conversations over the Internet instead of over a traditional phone line. It’s the new age of communication, and services like Skype claim hundreds of millions of users across the globe.

With this in mind, the question becomes, is offering a VoIP communication service the same as operating as a phone company? Truth be told, in this digital age the answer might have to be ‘yes.’ As French authority Arcep explains, the fact that users can make Skype calls from a computer or smartphone means that, “In effect…this service constitutes furnishing a telephone service to the public.”

According to Arcep, Skype Communications was contacted on several occasions, asked “to declare itself an electronic communications operator,” yet as French regulators explain, no action was taken. The purpose of declaring one as an official telecom operator in France is that one incurs certain obligations in providing additional communication services, most notably that “of routing emergency calls and putting in place a means for allowing legal wiretapping.”

The fact that Skype ostensibly operates as a telecom service provider in the country yet fails to employ the legally mandated responsibilities that accompany official declaration as a telecommunications operator is the key issue at stake here, an issue that could result in legal action taken against Skype and its parent company Microsoft.

As the NY Times notes, “The French action comes at a tricky time for Microsoft, which has come under pressure from digital rights groups over how data about users collected from Skype are shared with advertisers and law enforcement agencies.”

It comes as no surprise, of course, to hear that Microsoft disagrees with this ruling, stating that, “Skype is not a provider of electronic communications services under French law.” But that’s not to say the situation isn’t complicated, as when one looks at the services provided by Skype one can’t help but think that Skype sure looks like a telecom operator, sure acts like a telecom operator, and so perhaps it’s about time it incurred the responsibilities of every other phone company out there.

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Doug Moffat March 15, 2013 at 11:32 am

If the French are concerned over Skype, just wait until WebRTC is fully implemented and embraced. Anyone will be able to add voice and video connectivity to their website.

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