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27.07.09
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Skype Out
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By Roland Oliphant
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One of Russia’s most powerful business lobbies has sparked controversy with a call for the government to introduce regulations for Voice over Internet (VoIP) telephony services like Skype. The industrialists, representing Russia’s primary telecoms companies, say they stand to lose business to unfair competition. Critics say the competition is perfectly fair, and that the telecoms giants will have to learn to live with it. Meanwhile, the security services have their own concerns. Whose is Skype, and who should be allowed to listen in?
The move came from the Russian Union of Industrialists and Entrepreneurs (RSPP), and on paper it seems to be a bid to attack competition. “The majority [of voice-over-Internet] brands operating on Russian territory, such as Skype and ICQ, are of foreign origin, and therefore it is necessary to protect the domestic manufacturer in this field,” the RSPP said in a press release quoted by Gazeta.ru.
The telecoms companies say that VoIP calls will account for 40 percent of all telecoms traffic in Russia by 2012. That is probably an exaggeration. “In most countries VoIP services are primarily used to make long-distance and international calls and tend to have less of an impact on local and mobile calls,” said William Boscoe, an emerging Europe telecoms analyst at the International Business Monitor. “Given the massive size of Russia, long-distance telephony is a lucrative industry. Nevertheless, 40 percent still appears over optimistic.”
Even so, the mobile operators were quite candid about their reluctance to concede such a proportion of their business to competitors, and say they have decided to establish a working group to prepare proposals for the legal framework of the IP-telephony services. That is not without precedent – in Germany earlier this year T-mobile banned use of the Skype application on the Apple iPhone on the grounds that it interfered with performance, though it later backtracked. But the Russian operators’ appeal to the government seems deliberately worded to press the state’s buttons.
Apart from appealing to economic nationalism – “protecting the domestic manufacturer” – they complained that Skype neither pays Russian taxes nor invests in infrastructure in the country, even though it makes money here. And they also pointed out that Skype is not connected to SORM, the standard monitoring and eavesdropping system used by the Russian security services – apparently in the hope that if the government is not concerned about maintaining the Russian telecoms firms’ monopoly, it will be concerned about security.
This criticism is actually unique to Skype, which is widely believed to have an encryption protocol that is particularly hard to decipher. Rumors circulating on the Internet claim that the U.S. National Security Agency has offered “billions” to anyone who can find a way to break it, but the jury is out on how far that reflects reality. Andrei Soldatov, an independent security analyst, recalled rumors of “a couple of Israeli companies who have been known to sell software for eavesdropping on Skype,” and added that “if they really want to, they probably can.” Ilya Bagrak, a Moscow-based IT specialist, agreed. “Nothing is un-hackable. It is just a function of how much resources the security services are willing to spend,” he said.
Nonetheless, this particular argument may get some attention. As Anton Nosik, an Internet guru and respected blogger put it, “some law enforcement agencies really think that they should be in a position to eavesdrop on any word that is said online.” Until 2007, Blackberries were unavailable in Russia because the security services did not have access to the powerful encryption codes that preclude third parties from reading emails sent from the device. And the suggestion from the telecom giants came just days after a Ministry of Communications order came into effect that provides for secure facilities at post offices for opening suspect mail. Officially, eavesdropping legislation means providers only have to provide authorities with access to private correspondence in the course of a criminal investigation, but in practice the necessary warrants are easy to get a hold of and abuse.
But the security question is really something of a red herring, at least as far as the RSPP is concerned. The telecoms companies are effectively asking the Russian government to guard their current monopoly against the threat of a better, cheaper competitor, said Nosik, who has criticized the initiative in his blog. “Although they are already denying such initiative really took place, and saying there is no final document calling for ‘restrictions,’ but there is one calling for ‘regulation’,” he said.
Nosik, who is widely known as one of the “fathers of RuNet,” does not believe anything will come of the proposals. “Banning end users from downloading or using all kinds of software is not a workable solution,” he said. “A more workable solution would be for our telecom monopolists to adopt IP telephony, and they are already doing that - Megafon is now the leader of IP development.”
Indeed, the general consensus seems to be that this initiative will go nowhere. There is no legislation yet, even in draft form, and there are so many conflicting interests that any such legislation would take a long time to hash out. Many of the cheap telephone cards Russians use to make long-distance and over-seas calls rely on VoIP technology; telecoms companies like Megafon are already investing heavily in VoIP technology, and since Skype is used on mobile phones it already brings in cash for mobile operators. “If we follow the argument to its logical extreme, then Skype had better ask for a refund on the paid traffic it helped to create,” said Bagrak. “The ‘we are losing business’ argument is frankly the weakest one.” |
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