Skype facing trouble in France for failing to declare as a telco

Allan Swann
March 13, 2013

ARCEP, the French telecommunications regulator is prepared to take action against Skype, which it considers to be a telco – and hasn’t registered itself as such in that country.

Skype allows users to make voice and video calls over the Internet, using Voice over Internet Protocol (or VoIP), rather than down phone lines or from cell phone towers as conventional phone calls do. It has turned its model into an international success, offering rates far below what local telcos do.

Skype has run into these kinds of problems before, as it does provide the ability to make phone calls to mobile devices and computers across the internet – which leaves it in a grey area when it comes to the law. In its early days some mobile and broadband operators considered blocking the service (and other over-the-top data services), which competed with their own businesses. The next generation of mobile technology (beyond 4G) is expected to use VOIP as standard (it is far more efficient) and tests have been carried out in South Korea on high speed mobile networks – so it is definitely a worthwhile question to ask  in the internet age.

The regulator says that in engaging in the business of being an electronic communications operator (particularly providing a telephone service to the public), carries certain obligations, which include the routing of emergency calls and implementing the means required to perform legally ordered interceptions.

This would potentially mean the French government could spy on Skype’s operations in order to intercept calls – whether they take place in France or not. It is also a threat to Skype’s entire business model worldwide, especially if other countries follow suit. The EU, for example, does not consider Skype to be a telecommunications company.

ARCEP is claiming that Skype has never declared itself as a telco – which is a criminal offence. It also says it has requested several times that Skype do so, with no response. The matter has now been referred to the Paris public prosecutor for action.

Skype was purchased by Microsoft in May 2011 for US$8.5bn ( £5.2bn), and European authorities have been going after Microsoft for most of the last decade for anti-competitive practises (it has already paid ‚¬1.6bn in fines). Just last week, the EU competitions authority fined Microsoft £561m for breaches of its pact to offer users a choice of browsers when using Windows (it had previously locked in users to Internet Explorer).

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