ITBusiness.ca, the online news site affiliated with CDN, recently carried a short item pointing out an article in the IEEE Spectrum magazine about carriers blocking voice over IP (VOIP) calls.It seems the spirit of monopoly is alive and well in some of the world’s phone companies.
The article mentions no Canadian carriers. But Vodafone is doing it in Germany, and Comcast in the U.S. is identified as a customer of a California company that makes VOIP-blocking software, though it isn’t clear whether Comcast uses that capability. The IEEE Spectrum article points out, though, that under U.S. law cable companies can legally block VOIP traffic, though telephone companies can’t.
It’s a time-honoured approach to competition. Somebody else comes along who can do it better or cheaper, you resort to sabotage.
When it suits them — if, for instance, somebody suggests regulating some part of their business — the companies who use tactics like this will preach the virtues of a free market and sing the praises of competition. When they cut jobs to boost profits, they’ll say people must adapt to change. Ask them to adapt to change, though, and they react like corporate Luddites.
I’d like to say it can’t happen here. Nothing as blatant as outright blocking of VOIP is likely. But the IEEE Spectrum article also points out that while regulation prohibits phone companies in many countries from blocking VOIP traffic over their Internet services, it doesn’t prevent them inhibiting it.
As anyone who has studied VOIP knows, voice traffic over IP requires that packets get through fairly promptly and in order, or call quality goes downhill fast. Quality of service (QoS) software gives priority to voice packets to ensure this. But that can work in reverse. A carrier can tune its network so voice packets will get lower priority. There’s nothing stopping carriers from doing that.
And there’s nothing stopping them from then offering a “premium” service that amounts to simply turning off the artificially induced impediments to voice service, and charging extra for this.
This is also a time-honoured strategy. Picture the carrier as a large man wearing dark glasses and growling: “Nice voice packets you’ve got here. Wouldn’t want anything to happen to those nice voice packets, would we?”
In a speech at the Canadian Telecom Summit in May, Matt Stein, vice-president at VOIP operator Primus Telecommunications Canada Inc., accused Shaw Cablesystems of doing this. He claimed Shaw was unresponsive to complaints about quality problems on its network, but offers customers a $10-a-month “quality of service enhancement.” Certainly Shaw offers that enhancement, and its Web site says “without this service customers may encounter quality of service issues with their voice over Internet service.” Shaw didn’t necessary create those quality issues, but it’s Shaw’s choice to charge extra for the fix.
Technological change bring many benefits — like cheaper phone calls. It has also brought disruption. That’s hard on a lot of people — workers whose jobs disappear or change and who must learn new skills to survive, business owners whose business models fall apart. Those who profit most from this change keep telling us it’s inevitable and we must adapt. Maybe they’re right, but the knife cuts both ways. Those who sing the praises of technological change shouldn’t expect to block it when it happens to threaten their interests.