Bob Emmerson's Blog

Vanuatu (June 3) - Niklas Zennstrom, originator of the popular Skype peer-to-peer IP voice client, has gone public in response to new regulation from the US Federal Communications Commission giving voice-over-IP (VoIP) providers 120 days to make their services compatible with the E-911 emergency system. Hailed by wireline and wireless telecom providers, the FCC ruling weighs heavily on competing vendors of low-cost IP telephone service such as Vonage and Broadvoice, whose infrastructure, say some analysts, is neither readily, nor cost-effectively adaptible to support E-911. Analysts expect some shakeout in the currently red-hot VoIP space as deadlines pass, and non-complying providers find themselves targeted by FCC enforcement actions.

One popular VoIP provider, however, is taking the FCC ruling more in stride. Skype's peer-to-peer VoIP system, according to founder Niklas Zennstrom, is not a telephone service at all -- thus by rights should be exempt from FCC E-911 and other regulations. Unlike infrastructure used by conventional VoIP providers, which employs central call-direction servers to coordinate communications among endpoint devices, Skype communicates peer-to-peer between end-user clients. "This is not how normal telephone or VoIP systems work," Zennstrom says. "We initially defined ourselves as an adjunct to regular telephony -- an enhancement. But after further internal deliberation have decided to rebrand ourselves as something completely distinct from IP or conventional telephony: Skype is a peer-to-peer word-sharing software client."

Zennstrom continues: "Teenagers love to share spoken words with one another. Skype is client software, deployed by single individuals on their personal computers, which enables such sharing on a globally-scalable basis, entirely via p2p connections, and without central infrastructure. It is no more than superficially analogous to telephony, as this term is generally understood. This sharing of words enabled by Skype is private, in principle entirely legitimate, and per se breaking no existing laws or regulations of any modern, democratic nation-state. Needless to say, Skype wishes to clarify that while we developed and hold rights to the Skype client and underlying intellectual property, we are, and can be in no way responsible for the specifics of words shared when Skype clients interoperate under control of their users."

Rachel Glickman, an entertainment litigator retained by the FCC in the wake of the E-911 ruling, disagrees, describing Zennstrom's assertion as "disingenuous, debateable, disruptive and dangerous." Glickman, a recognized expert on copyright law, semantics and corporate intimidation, is best known for having successfully represented the heavy metal band, Metallica, in their high-profile 2003 case against users of KaZaA: "Metallica, RIAA, Sony and Twenty-Three Other Multinationals v. The Parents of Random, Hapless College Students, Nationwide," which proceeding, though settled for an undisclosed sum, is widely viewed as a landmark of intellectual property law, and perhaps the first example of a class-action lawsuit brought by corporate entities against a general population (precedent considered crucial in justifying, among other things, the present US-coalition-sponsored war in Iraq).

"They say people can use Skype for exchanging spoken words. They say this is prima facie legal, and in any case, can't be feasibly prosecuted or enjoined because Skype has no central infrastructure. But this completely ignores the reality, which is that kids around the world are using Skype, every day, to exchange millions upon millions of words that they don't own!"

"Everybody knows that kids copy everything they hear. This is a secret?" Glickman continues. "What parents, teachers, university administrators and others need to understand, however, is that when kids copy words they didn't invent, this is stealing. It hurts the legitimate creators of those words, in etymology, neologism, literature -- and it hurts their legitimate licensors in broadcast, publishing, and not least in telecommunications." Glickman says that use of Skype to exchange "appropriated" words (so-called 'dub words') is widespread in high schools and colleges, both nationwide and globally.

"When people use p2p to exchange and consume words in the public domain, and within respect of usage guidelines, that's okay. Somebody wants to quote Brian Lehrer or Leonard Lopate when talking to their friends on Skype, that's fine -- NPR even has a word for it: 'podQuoting.' But saying that kids are using Skype exclusively for podQuoting is incredibly disingenuous. PodQuoting only accounts for a minuscule fraction of Skype's global traffic, and the creators of Skype know it, and have covertly based aspects of their business plan on projections of this sort of non-legitimate use. So they are responsible."

Word-originators seem split on whether Skype actually threatens revenue. Some well-established wordsmiths, particularly those such as William Safire of the New York Times who earn significant income through speculative licensing of popular memes and neologisms, argue that the word-sharing service is causing them significant material losses. "When some kid reads my column on rap-influenced vocabulary and then turns around and starts saying "fashizzle my nizzle" to his friends, over Skype, that's money coming right out of my pocket," Safire says.

Rapper/actor Snoop Dawg disagrees. Dawg is widely acknowledged to have actually created "fashizzle" -- but when he attempted, sometime in 1995, to place it in the public domain, he discovered that rights to the word and all derivatives had already been asserted by Safire and associates.

"Man, you want to hear 'disingenuous?'" Mr. Dawg says. "Disingenuous is when people like Safire, and Verizon try to take words away, lock 'em up, and make regular people pay to use them. They call this 'intellectual property' -- like it's a right. But they don't know that words, like rights, come from God: In the beginning, was the word, am I right? Me, I feel grateful that God gave me the creativity to imagine "fashizzle," and I wanted the people to have it, and use it free of charge. If Skype helps the kids spread their words, then Skype's okay by me. Besides, the world moves on fast -- nobody cool says "fashizzle" any more. Word."

Still, Glickman argues, if she and the FCC can prove that Skype's business plan, as represented in projections to private equity funding and similar sources, is based largely on traffic-volume assumptions presupposing transgressive use, that may be enough to start the litigative ball rolling. But so far, Glickman says she has been unable to obtain a copy of Skype's business plan, and founder Zennstrom denies that one exists. "The only plan we have is to add features to the client, to increase ease of use, and to perhaps offer some ancillary services on a pay-as-you-go basis," Zennstrom says. "What happens with Skype is up to its users."

Glickman counters: "If that's how they want to play it, the FCC and its co-plaintiffs may have to steel themselves, take a sheet from Metallica's playbook, and go after individual abusers of Skype's software-mediated service. People need to understand that unauthorized word-sharing is a crime, that it has victims, and that its victims can, and will demand reparations. Free use of Skype clearly, in many cases, breaches the concomitant rights of approved carriers such as regional Bell operating companies, who have paid -- in some cases, substantial -- fees for the privilege of carrying words over wires and through the air, between their legitimate owners."