Skype's Voice over Internet Protocol app gives users Skype calling and instant messaging on Apple iPhones and second-generation iPod touches. The application, which saw more than one million downloads in the first two days after being made available, allows users to make calls on the iPhone over a Wi-Fi connection, but not on AT&T's 3G cellular network.

The limitation, which has been formally imposed by Apple's App Store policies, has caused groups such as the Free Press to ask the Federal Communications Commission to investigate whether Apple and AT&T are breaking federal rules. The Free Press wants the FCC to clarify whether its Internet Policy Statement for an open Internet applies to wireless service providers who also offer broadband Internet access service.

Competition at Core

The Free Press complaint comes after a senior AT&T official was quoted in USA Today as saying that AT&T expects its vendors to not facilitate the services of competitors. That statement indicates it won't be developers who have control over wireless innovations, but wireless carriers through restrictive language used to control the use of applications and services on their network, according to the Free Press.

The Free Press says the mobile Internet should be as free as the Internet users access from fixed locations.

"This issue is not new -- it is simply unresolved," said Ben Scott, policy director at the Free Press. "Wise voices at the FCC have long said that the Internet Policy Statement applies to wireless. As more and more consumers begin to access the Internet wirelessly, it is critical that the FCC clarifies that online consumer protections that prohibit blocking are the same regardless of how we access the Web."

Analyst Michael Gartenberg said carriers may have to come to terms with VoIP applications such as Skype's becoming competitors, but added that in this case the developer may have made the decision.

"It seems like app functionality is determined by the app developer," Gartenberg said. "(There are) lots of reasons why Skype might not have wanted to use 3G for calls."

Consumer Rights and Choice

Scott, however, sees the situation as a step back for consumer rights. "These limitations fly in the face of the consumer rights contained in the Internet Policy Statement, and the commission should reaffirm that the Internet Policy Statement applies to wireless networks," Scott said in his letter to FCC Acting Chairman Michael Copps.

Skype is supporting Free Press' actions. As long as consumers are not harming the network, they should be entitled to use the products they pay for, Christopher Libertelli, a senior director of government and regulatory affairs for Skype, told The Wall Street Journal.