In light of the imminent prospect of network neutrality rules being voted on by the FCC, AT&T has announced that it will allow Internet calling services to be placed and received over its wireless network. The FCC’s proposed rules will likely affect the validity of exclusive relationships, like the one that exists between AT&T and Apple’s iPhone, and will ensure that broadband providers don’t abuse their power over Internet access in order to favor their own services or harm competitors.
The result of allowing products like Google Voice and Skype over wireless phone networks should be similar to the effect that Voice Over IP (VOIP) has had on land-line phone services. As we all know, once people began to use their computers to make phone calls at significantly reduced rates or even for free, traditional phone companies were forced to significantly reduce the rates they charged for phone calls. Then, they covered their lost revenue by developing new products and introducing new services.
We expect to see a similar rate adjustment with mobile phones: cost for the consumer will decrease significantly, because otherwise callers will no longer use their minutes to make phone calls. Instead, they will use their data plans.
As a result, we can expect cell phone companies to adjust to this new environment by lowering the costs of their phone plans, and at the same they will also increase the cost of their data plans, and/or aggressively push more consumers to sign-up for a “smart phone”, with a data plan attached to it.