Skype yesterday petitioned the FCC to lay the smack down on wireless phone carriers who "limit subscribers' right to run software communications applications of their choosing" (read: Skype software). Skype wants the agency to more stringently apply the famous 1968 Carterfone decision that allowed consumers to hook any device up to the phone network, so long as it did not harm the network. In Skype's eyes, that means allowing any software or applications to run on any devices that access the network.

The reason for Skype's interest in the issue is obvious: they want to force network operators to allow Skype-enabled calling across their networks, something currently prohibited on wireless data plans. In its filing, Skype argues that this capability would offer "tremendous new sources of price competition provided by entities such as Skype," and that's exactly why wireless operators will fight the plan tooth and nail.

Something similar has happened before. In the early days of the wired telephone network, the phone company provided not only network service, but also the equipment, and routinely took firms to court if they sold products meant to be attached to consumer telephones (which were still owned by the phone company). In 1956, a court ruled that a device called the Hush-a-Phone was allowed to be fitted onto the telephone so long as it was "privately beneficial without being publicly detrimental."

In 1968, the FCC endorsed this principle in the Carterfone case. The Carterfone was an early attempt at building a wireless phone. It used a two-way radio and an acoustic coupler to patch a person's voice into the telephone network, and the FCC again ruled that this was allowed so long as the network itself was not harmed. The principle is still in place today, and wired phone networks now stop at a small termination box usually located on the outside of homes; anything past that point is the homeowner's responsibility, but phones, modems, and faxes can all be hooked up to the network without requiring phone company permission.

This principle currently affects the wired telephone network, the cable TV network (any set-top box can be hooked up to any cable system, at least in theory, once the "integration ban" goes into effect later this year), and the data networks offered by both services (DSL and cable, which can be hooked up to any device inside the home). Wireless phone networks are a different story. Defenders of the status quo argue that this isn't a problem, since plenty of competition already exists in the market, and the invisible hand of the market will inevitably provide that which consumers want better than any government regulation can do.

Unfortunately, the "invisible hand" has been a little too invisble here, and no operator actually offers a wide-open network. Skype thinks a smidgen of government regulation could actually help out quite a bit, and they cite Dr. Tim Wu's recent paper on wireless network neutrality for support. Skype (and Wu's paper) point out the various ways that the wireless phone companies block consumer choice: crippling features on phones, locking handsets to operators, limiting consumers' ability to install third-party applications, and limiting the terms of service with bandwidth caps and restrictions on what content can be accessed through the network (Skype calls are forbidden, for instance).

Skype essentially wants to turn the wireless phone companies into just another network of the kind currently operated on the ground. This would require carriers to allow any phone to be used on their networks, and for any application. Users would simply purchase a voice or data plan (though these could easily converge into a data plan if VoIP calling is used) and then use the device of their choice to access the network of their choice. Verizon, Cingular, et al. hate this and would love to keep crippling WiFi and Bluetooth access on their phones in order to keep traffic flowing through their network, using their (high-priced) services.

Recognizing that its proposal would pose some thorny technical problems, Skype "approaches these issues with humility, recognizing that application-layer competition depends in part upon the 3G deployment efforts of wireless carriers." They suggest the creation of an FCC-guided forum to handle technical specifications, one that would operate transparently and would involve all stakeholders in the issue. The forum, in Skype's view, would ensure that "no entity can enforce techniques such as blocking, locking, or certification requirements that have the intention of preventing consumers from modifying or installing software unless it is reasonably proven that such software harms the network."

The wireless operators don't have any intention of being reduced to mere commodity providers of network services if they can help it, and this recent filing certainly won't raise Skype's reputation within the industry. Of course, since that industry already restricts Skype from running on its network, this is no big loss.