As leaders of the House Subcommittee on Telecommunications and the Internet, we ask that you consider taking up an important telecom issue that has real impact on lower-income residents of the U.S. and the future of competition in mobile voice communications.

I’m referring to the short code issue now before the Federal Communications Commission in the form of a petition for declaratory ruling that refusing to provision a short code to a customer is unjust and unreasonable discrimination, and violates the law.

This issue is important because short codes are what make it possible in the U.S. for companies to send SMS – text messages – to individuals.

Today, mobile operators still have the ability to act as Big Brother gatekeepers even after a company has received a dedicated or shared short code from the Common Short Code Administration (CSCA), and submitted a specification of traffic flow and commands to each carrier for approval of the process of OPT-IN and OPT-OUT to make sure the recipients really do wish to receive the SMS.

In other words if Verizon, AT&T, Alltel or T-Mobile don’t like what’s in certain SMS, they have the ability to block the message from going through to the consumer.

The FCC petition filed in December by public interest groups Public Knowledge, Free Press and Mobile Commons, cited Verizon’s rejection of NARAL Pro-Choice America’s text messages to its supporters as a prime example of carriers interference with political speech.

Violating American’s sacred First Amendment rights is downright dumb. And Verizon quickly stopped blocking NARAL’s SMS as soon as The New York Times shed some light on what Verizon was up to.

But what may be a better case for why regulation is needed is the U.S. carriers’ refusal to accept SMS from Rebtel, which is also cited in the petition as an example of how Verizon Wireless, T-Mobile and Alltel have taken advantage of a perceived regulatory hole to discriminate against competitors.

For example, Verizon – the self-proclaimed “most profitable wireless company in the U.S.” –prevents its customers from sending SMS to themselves from the Rebtel web site because they contain local U.S. phone numbers Verizon customers can use to call friends and family abroad for just pennies per minute instead of the rip-off rates charged by Verizon. Many of these rates escalate beyond $1 per minute, with profit margins that rival the oil companies.

At a hearing last Monday on network neutrality and network management, FCC Chairman Kevin J. Martin said, “The time has come for a specific enforceable principle of nondiscrimination.”

We think Mr. Martin is right and should now apply that same position to the short code issue, and stop the arbitrary blocking of consumer access to certain services.

We also think it’s the FCC’s job to figure out where you draw the line between unreasonable discrimination and reasonable, fair business practices.

And, if we really live in a country of free enterprise, we think it’s high time to let the customer – the people – decide what information they choose to receive by SMS, and not have it dictated by the big mobile operators.

We hope you agree with us on this issue and closely monitor the FCC proceeding. And would the FCC believe that it lacks authority to correct these wrongs, we encourage you to introduce legislation that makes clear that the FCC should prevent wireless carriers from unreasonably discriminating against businesses using short codes to interact with their customers.

Sincerely,

Rebtel (the people’s global communication company)

Verizon also prevents its customers from receiving SMS from Rebtel customers outside of the U.S.

Well, it now appears that AT&T Wireless has started playing games with SMS, targeting messages that its customers send to themselves or receive from friends using Rebtel services both from http://www.rebtel.com as well as from Rebtel’s free Facebook conference call service, Group Talk.

To avoid the indictment of blocking Rebtel SMS, it looks like AT&T has turned all SMS from Rebtel services into what’s called Flash SMS. As a result, the messages are only temporarily stored when displayed; as soon as you close the message, it disappears and is not automatically stored in the phones Inbox.

I’m told by my more technical colleges that this is no coincidence that there is a trigger value that has to be set by AT&T to make the SMS into a Flash SMS, instead of a normal message.

I know this is happening because I’m an AT&T Wireless customer and experience their nasty trick regularly when I receive Group Talk notifications for free conference calls. And, friends who are also AT&T subscribers report the same experience.

So Shame on you AT&T Wireless. This is a dirty trick right out of the Verizon playbook, and it’s time to stop.

That probably sounds a bit odd coming from Rebtel these days. But yesterday Verizon and AT&T rolled out new plans that give U.S. customers unlimited airtime minutes for a flat fee of $100. And flat fee plans are music to our ears even if the carrier continues to block its customer SMS.

Unlimited airtime minutes means anyone who subscribes to one of these plans now has the ability to make unlimited free international calls to 39 countries around the world using Rebtel’s Smart Call system.

But even if they’re not willing to jump through the few hoops that make the international portion of call free, they can still take advantage of our super low-cost rates for calling any phone, anywhere in the world.

And eventually, we hope that Verizon will come to its senses and stop preventing its customers from sending standard SMS text messages to themselves and their friends if they contain local phone numbers issued by Rebtel.

Late last week I spoke with Robert Poe, a reporter for VoIP-News and DailyWireless about this issue. As any good reporter should do, Robert contacted Verizon after our call. Verizon (no surprise) denies that it is blocking SMS that their customers try to send to themselves or that their friends try to send to them from the Rebtel web site.

Robert declined Rebtel’s help to test our claims, which will make his findings all the more powerful when they come out. In the mean time, with the kind help of my comrade Fredrik Henning, I thought I’d take a minute to shed some light the mechanics of this problem and why Verizon is not telling the truth.

To be able to send SMS to people in U.S. from a system platform, not person to person, a short code number is required to identify the sender of the messages. Therefore every provider of messaging services has to apply for a dedicated or shared short code (a 5-6 digit number) from the Common Short Code Administration (CSCA), which Rebtel had done and received.

The reason for this bureaucracy is that the U.S. market applies interconnect charges differently than other countries. In the U.S. mobile recipients pay for incoming SMS. In contrast, people in Europe do not pay for incoming SMS because the operators in Europe are being paid by the originating operators to cover the cost of delivering the SMS to the recipient.

Rebtel wants its customers to be able to send SMS to their friends that are mobile subscribers in U.S. mobile networks. Rebtel wishes only to send SMS on behalf of the users, and not perform any unsolicited bulk messaging (a.k.a. SPAM or advertising).

So, despite what Verizon spokesman Jeffrey Nelson tells the press, every SMS sent from Rebtel’s system is sent on behalf of the users who have requested that Rebtel send SMS to their friends or to themselves.

But it doesn’t end here. To get a short code implemented in a U.S. mobile operators network a specification of traffic flow and commands has to be submitted to each operator for approval of the process of OPT-IN and OPT-OUT, insuring that the recipients really do wish to get charged for receiving SMS.

Rebtel provided its specification of this process and got it approved by some operators, but not all, namely, Verizon.

So the bottom line is we’ve played by the rules. Our specification follows all requirements to get a short code approved with regards to OPT-IN and OPT-OUT. Yet, Verizon refuses to approve it. What’s that about? Why is this allowed?

We think it’s now time for the industry to stand up to this bullying.

We think the CTIA the trade association “dedicated to expanding the wireless frontier needs to reprimand Verizon and demand they play by the rules.

And if that doesn’t work, then we think it really is time for the FCC to do something about Verizon and its blatant anti-competitive abuse of power.

Soon after Public Knowledge, Free Press and others filed a petition asking the FCC to rule that text messaging and related short codes are protected from unjust and unreasonable discrimination. Rebtel, which was named in the petition, received some attention in the press, and Verizon was none too happy about it.

I’m talking about the Verizon that reported $1 billion in earning last quarter while adding 2 million wireless customers to bring its total to 65.7 million.

The Verizon that went to Capitol Hill recently as part of the CTIA to ask that they be spared from the indignities of burdensome regulation on their text-messaging services and short-code offerings.

The same Verizon that told BusinessWeek that Rebtel can still text-message our customers to offer their service.

And the very same Verizon that is now preventing its customers from sending standard SMS text messages to themselves and their friends if they contain local phone numbers issued by Rebtel.

Goliath didn’t like the negative attention it received in the press regarding its treatment of little David. It doesn’t want people, especially people at the FCC, to know that Verizon violates their customers freedom of speech every day.

So they contacted Rebtel just before the New Year and told us that they would stop blocking their customers SMS IF Rebtel would shut down all PR on the short code issue and send a letter to the FCC in praise of Verizon and its new openness and cooperation with Rebtel.

Being the trusting souls that we are, we complied. We stopped talking to the press. And when the press called during January we explained that Verizon had seen the light, that we were talking with Verizon and expected to have an announcement from the two companies shortly.

At first Verizon complained because there were some straggler stories appearing on the Web. And then there was silence. No response to our mail. Return phone calls came to a halt. Nothing.

It took us a week or two but we finally realized that we had been tricked. Verizon had tricked us into silence. Well, shame on us! We should have known better. And now we do.

But the true shame and the real crime is that Verizon customers are being prevented from sending SMS messages to themselves and their friends from the Rebtel web site.

We’re not asking for special access or treatment. We just want Verizon customers to be able to send standard text messages to themselves and their friends regardless of the content. That’s what free speech is all about. But Verizon thinks differently.

Because it doesn’t like what’s in those SMS messages, local phone numbers that will connect Verizon customers to their friends and family abroad for just pennies per minute instead of the highway robbery charged by Verizon for the same call and because they don’t like the viral nature of the Rebtel service, Verizon shuts them down. It turns off their customers right to send SMS.

Well, live and learn, as they say. But I promise, this one ain’t over! This David, for one, is pissed.

Today we’re kicking off our holiday campaign, enabling new Rebtel customers to receive $2.00 from Rebtel for every $1.00 they put into their account through the end of the year.  

Then we give our new customers a choice:  They can donate the money to either UNICEF or Amnesty International.  They can give the funds to a friend, family member or work colleague so they can make super low-cost international calls using Rebtel.  Or, they can keep our gift in their account to make more calls.

The campaign begins today and runs until January 1^st, 2008.  Only first payments of up to $10.00 qualify for the program.

Non-paying Rebtel users – people who have previously registered and have been using Rebtel’s Smart Call service for making free global calls, or who joined Rebtel only to get a free 10 minute international call, but have never made a payment to Rebtel – may also participate.  We’re always looking for ways to help our users do good in the world.  That’s why we started Rebtel.  And we hope you’ll take us up on our offer.Happy holidays.

I think it is Jeff Pulver who raised the stakes by offering a reward for “cool” VOIP apps. It’s true, there is a quest for coolness here, coolness meaning anything that is not “Call Forwarding and/or Voicemail” in Jeff’s words. So, what would be compelling then?. Jeff writes:

(…) after listening to Brian Whitton speak, it became clear to me there is still a great opportunity to disrupt the communications industry, if for no other reason, than because of the amount of business processes in place at Verizon (and other incumbent Telcos) before a new service is deployed. In fact, in the time it takes for the financial analysts at Verizon work out the operating budgets for doing a voice over ATM rollout and the time engineering spends trying to justify the “risks” for deploying an IP Voice solution, the seed of a communications revolution could planted and sown. All it takes are like minded people who want to change the way we communicate and the guts to take on the status-quo. And what is better than the present time to reboot and restart the Internet Communications revolution?

Well, yes. However, rebooting in this business to us means giving people the easiest means to accessing VOIP from their ordinary phones. After all VOIP is but a technology for transferring Voice over IP: it’s not a service in and of itself. I would guess that more than 90% of mobile calls are initiated from our phones’ address books. Increasingly, people have free local minutes included in their calling plans. We figured it would be cool to turn those minutes into local calls, especially if you want to call internationally.

Sometimes I think “compelling” services are only compelling for those already in the know, the inner circle of VOIP watchers, so to speak. Twitter and Facebook are often mentioned, and Jeff mentions them too. If there’s one thing we’ve learned it’s that those services are so successful because they remove clutter and simplify things, while offering a wealth of access options to their basic service offering. It’s true, there’s a wealth of opportunity in VOIP, but it is through simplicity that the revolution will happen. Rebtel: simple stuff: use your address book to call your international contacts for next to nothing, or even free if you make smart calls. That’s cool enough for us.

…if it had a microphone, that is.

Last month the iPhone dominated the news, but now that the ipodtouch is hitting the stores later this month, Apple’s two-pronged strategy is becoming clear. In a surprising move that will have put frowns on the faces of AT&T’s board of directors, Apple is making the new touch available including wifi capabilities, and with the possibility to download songs directly from iTunes onto the iPod. AT&T will be none too pleased about this: a shrewd bit of strategic maneuvering had Apple out-witting them. On CNN Money, Stephanie Mehta points out:

The Wi-Fi capabilities built into the touch – and other devices such as Nokia’s N95, Samsung’s T409 and a number of Windows mobile devices  - in the long run could end up by-passing wireless phone networks altogether. How? If a user downloads ringtones or searches the web on a Wi-Fi network, he or she is not consuming minutes on the carriers’ data networks, which phone companies are spending billions to build.

Elsewhere I’ve been saying that a wider availability of Wifi enabled devices coupled with VOIP services will be a substantial kick in the behind of Mobile Operators. It’s easy to see why AT&T disabled VOIP on the iPhone, and now Apple has gone the other route and has released a device that is – at this moment – a phone without a microphone. All this to the relief of AT&T directors, no doubt. However, it’s also abundantly clear, that the iPod with a microphone, or a device like it, will come. When the iPhone was first released, there were a lot of comments on the stranglehold AT&T was supposed to have on Apple. It’s now obvious that this is the other way round. And it is like this for all of us. I’m cited in the article as bragging of “using (my) hotel’s Wi-Fi connection to make a 90-minute VOIP call to Europe” where roaming charges would have bought me a new phone altogether. Today that’s as true as it was then. Apple has now changed the landscape. Device manufacturers but also the likes of Nokia have tried to push wifi and therefore voip for a couple of years now. For consumers wishing to make cheap international calls, Voip is a success story that is as yet poised for success. Its breakthrough may be one step closer but we are still missing an open platform strategy from the device manufacturers. Meanwhile, manufacturers are reproaching Telcos for not opening up their platforms to enable innovation as seen on the tethered Internet. Neither Apple nor Nokia have ever been known for such an open approach. Compared to them, even Microsoft looks decidedly open source.

Judi Sohn, who edits WebWorkerDaily and has been a long time fan of GrandCentral got an email from the GrandCentral team letting her know that her number will be changed as of August 25, 2007. She was fuming, but not anymore: Google-owned GrandCentral (GOOG) will pay for reprinting her business cards.

Judi writes: “One number for life.” Not so much, huh?”
As I read her post and that of other recipients of GoogleGC’s email, it becomes clear how narrow the path is that web2.0 service providers travel. Because service and service delivery are now so very transparent, every change in service, especially if it contradicts promises about the product, as it does here, are all over the internet in a matter of hours. Gone are the days when companies could hide comfortably behind a facade. Users are now part and parcel of any product offered nowadays and will make themselves heard if the that product disappoints. A good thing though, that Google offered to refund the costs incurred in having to reprint business card that carried the GrandCentral number.

On a side note: Rebtel has received comments for having a relatively “difficult” product that necessitates a small change in calling habits: assigning a local number to a contact and then using that number as their phonenumber in you contact list. Also, the concept of smart calls (calling that’s free within your inclusive minutes, by asking you contact to hang up and call you back while you stay on the line) needs some time before peope actually start making use of it. Very important to us is the fact that the product is transparent and that we’re visible and active users of it ourselves. After all, disruption is in our blood…

The seductive aspect of Skype is that it makes it very simple and easy to use the product. It has (at least for the moment) a massive directory of users. It has APIs that let it be readily integrated with other web sites and services. It’s easy to use… and I expect that probably many if not most users will simply go back to using it as they have always done once it comes back into full operation. People have short-term memories…

Certainly, Skype has become an infrastructure layer on the net, as so many services are built on top of it. It was interesting to see
how much functionality I was personally unable to use. Crazily, as I was still logged in to Skype through iSkoot on my cellphone, that was the only way I could gauge whether Skype was becoming available again. “Are my contacts there yet”. Skype’s prolonged unavailability also raises questions about reliability of such software, as it was not the service itself, but merely access to it that was disabled. Important to keep this in mind: it has convinced me, that adding a layer to control access to a VOIP service is not the way I wish to have my VOIP needs met. SIP based protocols are becoming more available now, and I consider that a good thing. Meanwhile, for my international telephony needs, I gladly trade add-ons and plug-ins for Rebtel’s elegant simplicity: assign local numbers to my contacts, call them using just my mobile phone, done. No web based software, no log-ins.