Cisco has appealed to the European Union's General Court, asking for the European Commission's approval of Microsoft's takeover of Skype to be made conditional. The network infrastructure company wants the EC to ensure "standards-based interoperability in the video calling space."

Regulatory bodies gave Microsoft's takeover of Skype the go-ahead last year, with the deal finalized in October. Cisco says that it does not want to block the merger entirely, just restrict it and require Microsoft to make Skype play nicely with other voice and video calling systems.

Skype's video and voice chat protocol is entirely proprietary and undocumented. Skype also uses a range of different codecs (including the proprietary, Google-owned VP8 and the open H.264). This makes Skype's network of users almost completely isolated, and unable to communicate directly with any other VoIP or video system.

Skype does have a product, Skype Connect, that can bridge between Skype and SIP-based telephony systems for voice communications, and at various times has offered facilities to bridge to other PBXes. But for the most part, it has no interoperability with any other voice or video systems.

The same is broadly true of Microsoft's pre-Skype systems: Windows Live Messenger, and Lync. Though there are provisions to bridge Lync to SIP telephony systems, both Lync and Messenger are largely sealed systems.

Skype is the most widely-used voice and video call system in the world, with users numbering in the hundreds of millions, and even more able to use Skype technology through the integration with Facebook. Messenger is similarly the most-used instant-messaging system, and Lync is growing fast.

The lack of interoperability extends to Cisco's own voice and video telecoms system. Cisco's video conferencing systems are built around industry standard protocols: SIP, H.263, H.264, and others. The company has also worked towards the standardization and development of interoperable multivendor implementations of some of its value-added features, such as its Telepresence Interoperability Protocol (TIP).

Cisco says that the different codecs used by the different Microsoft/Skype products is a particular problem. Differences in call setup can be handled relatively easily by simple bridge software. But different codecs require the bridge to also transcode the video, converting between formats, which increases complexity and hardware demands, and also compromises quality. A consistent set of codecs (with consistent bitrates and other quality parameters) would eliminate the need for this costly conversion.

Cisco attempted to enter the consumer video calling market with its ill-fated ūmi line: $500 home video-conferencing systems that surprisingly failed to set the world alight. Lack of interoperability with the consumer space's most popular video calling system made ūmi a tough sell.

Without the Microsoft takeover, Cisco would have had little ability to break into this market and compete with the heavily entrenched Skype. But with Microsoft purchasing Skype, Cisco has a rare opportunity to force legislative oversight and attach new conditions to the behavior of the combined entity. If the courts were sympathetic to Cisco's requests and demanded that Microsoft and Skype switch to using standard protocols in standard ways, Cisco's products would gain access to hundreds of millions of new users.

This explains why Cisco is not arguing for the deal to be canceled outright: with the merger blocked, Microsoft and Skype would remain free to keep their systems proprietary, with no possibility of the imposition of conditions.

The European Commission made its decision last year, but unlike the comparable Department of Justice decision, EC decisions can for a limited time be appealed. That appeal window will close soon.

European Commission spokesman Antoine Colombani said that the Commission will defend its decision in court, and a Microsoft spokesperson said, "The European Commission conducted a thorough investigation of the acquisition, in which Cisco actively participated, and approved the deal in a 36-page decision without any conditions. We're confident the Commission’s decision will stand up on appeal."