DON'T BELIEVE THE SKYPE

Fool.com
By Dave Mock
April 7, 2004

With Federal Communications Commission (FCC) Chairman Michael Powell still wrestling with how the U.S. government should or should not regulate Internet telephony, provider companies haven't skipped a beat in pushing ahead toward the age of voice over Internet protocol (VOIP).

Major carriers and equipment suppliers such as Verizon Communications (NYSE: VZ) and Nortel Networks (NYSE: NT) have been hustling to deploy new VOIP capable equipment and services. Smaller start-ups, such as deltathree (Nasdaq: DDDC) and privately held Vonage, have also been aggressive in trying to carve out a profitable niche in the future of data telephony.

Recently, another popular private player leading users into the convergence age -- a company called Skype -- announced software that enables mobile calling over data networks. With the software, voice calls can use broadband access points (Wi-Fi hotspots) and the Internet to complete calls between users. Because the calls need to originate and terminate on devices using Skype's software, it's referred to as peer-to-peer (P2P) telephony (it can't call traditional phones -- yet). (full article)