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Don't Skype this column

Last week, Attorney General John Ashcroft held a press conference in which he referred to "peer-to-peer," or "p-to-p," technology as "permission to pilfer." He was referring to its use to illegally exchange copyrighted material such as music and movies. Using this logic, he might just as well have condemned printers that can print copywritten material.

In fact, peer-to-peer, the technology that allows computers to connect directly to each other rather than through a server, is a powerful tool that's positively impacting computing and communications.

One terrific example is Skype, free software that lets you make calls between computers over a broadband connection. Skype has already been downloaded by more than 20 million people and has 8 million users. It's attracted major venture capital investments, some likening its potential to Yahoo (Nasdaq: YHOO) or Google (Nasdaq: GOOG).

The software was invented by the creators of Kazaa, peer-to-peer software for exchanging music files. The company is located in Luxemburg, some say to avoid the reach of the phone companies and regulators who might rightfully feel threatened or want it to be taxed like other phone services.

Fortune magazine recently quoted Michael Powell, chairman of the Federal Communications Commission as saying, "I knew it was over when I downloaded Skype. When the inventors of Kazaa are distributing for free a little program that you can use to talk to anybody else, and the quality is fantastic, and it's free -- it's over. The world will change now inevitably."

Just last month "SkypeOut" was introduced. It lets you call from your computer to any phone number in the world for a small charge. For example, calls between the United States and most of Asia in either direction are just 2 cents a minute. Both Skype and SkypeOut use the same software and interface.

Skype has a simple interface that looks and works much like instant messaging. You create a list of friends and associates who also have Skype, and, once permission is provided by them, you can see when they're online and call them. SkypeOut works much the same way, but the person you're calling need not be online nor have Skype; you just dial the person's phone number from your computer. Connections using either are made in about 3 to 10 seconds.

While many computers have a built-in speaker and microphone that can be used for the call, for the clearest conversations I recommend using a PC headset with microphone that's available for $20 from Radio Shack.

How well does it work? Amazingly well, most of the time.

I've used it from my home and on the road, calling others directly to their computers and to dozens of phones. The quality of the calls is usually crystal clear, in many cases better than a land line and far superior to a cell phone. There's no background noise, and voices seemed almost high-fidelity in quality. The conversation is full-duplex, meaning both can talk at the same time without being cut off, and there was no noticeable delay. Rarely were calls dropped, even those lasting over 30 minutes. On a few calls there was an occasional echo, and an occasional syllable dropped, but this was infrequent.

The technology uses VoIP, or voice-over-Internet protocol, and requires a high-speed connection. With a good connection it's even possible to conference in as many as five people at one time. Note that it's not possible to call from a phone to a computer.

This past week I tested SkypeOut while traveling in Hong Kong and southeastern China. I purchased 10 euros ($12) of credit from Skype's Web site for the SkypeOut service. After a week's use, making dozens of calls, mostly back to the United States, I had spent only $3. I estimate that these calls would have cost $300 using my cell or hotel phones, which have rates of about $2 per minute.

In my Hong Kong hotel, I used the in-room Ethernet connection. In one session (out of about 10), I was unable to complete any calls, and instead received hang-ups just after connecting. Nothing I did seemed to work, including rebooting my computer. A few hours later it worked perfectly. I attributed it to either an online connection problem or a computer glitch.

While in southeastern China, I never was able to complete a phone call, whether connected from the hotel or office. It's unclear if this was due to the government's censoring of the Internet or to problems with the connection.

Skype makes it clear that this is still a work-in-progress and provides excellent online help and error reporting. Even so, it's hard to fault them at this early juncture, especially for what they are offering. It was great to be able to make frequent leisurely calls back home without worrying about the phone bill. It's one of the best products I've come across in recent months and well worth downloading and trying.

Related Link: www.skype.com


Baker has developed and marketed consumer and computer products for Polaroid, Apple, Seiko and others. He is the holder of 30 patents and was named San Diego's Ernst & Young Consumer Products Entrepreneur of the Year in 2000. He can be reached at phil.baker@sddt.com.

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