MagicJack's next act: disappearing cell phone fees

[S2007S]

Of course all cell phone carriers are going to cry over this huge change in the market place, I mean how many years have they been ripping off the consumer, I think ill be buying one as soon as it comes out.



MagicJack's next act: disappearing cell phone fees



LAS VEGAS

The company behind the magicJack, the cheap Internet phone gadget heavily promoted on TV, has made a new version of the device that allows free calls from cell phones in the home.

It's sure to draw protest from cellular carriers. The new magicJack uses, without permission, radio waves for which the carriers have paid billions of dollars for exclusive licenses.

YMax Corp., which is based in Florida, said this week at the International Consumers Electronics Show that it plans to start selling the device in about four months for $40. That's the same price as the original magicJack. Like the original magicJack, it will provide free calls for one year.

 

[Thermactor]

Wow, that could be a game-changer.

 

[Drock409]

If King Cellualar crys foul....this will be off the shelves before it even hits the shelves

 

[tmarket]

Doesn't sound legal. FCC doesn't have low power exemptions for the cellular spectrum. The carriers paid for the spectrum. It is not clear how magicJack can highjack the spectrum, even if it is in the home. It is also not clear how any cell phone can operate with a hacked signal.

According to YMax CEO Dan Borislow, the device will connect to any phone that uses the GSM standard, which in the U.S. includes phones from AT&T Inc. and T-Mobile USA. At a demonstration at CES, a visitor's phone with a T-Mobile account successfully placed and received calls through the magicJack. Most phones from Verizon Wireless and Sprint Nextel Corp. won't connect to the device.

Borislow said the device is legal because wireless spectrum licenses don't extend into the home.

AT&T, T-Mobile and the Federal Communications Commission had no immediate comment on whether they believe the device is legal, but said they were looking into the issue. CTIA - The Wireless Association, a trade group, said it was declining comment for now. None of them had heard of YMax's plans.

 

[jeffh0821]

Its actually an interesting interpretation of the spectrum licensing rules. Basically, MagicJack is claiming that the license the wireless providers have for their portions of the wireless spectrum do not extend onto private property. So, if you decide to utilize a radio frequency within your own home, and do not interfere with that spectrum outside of your property, you can utilize the device.

The problem is, in reality, the MagicJack IS going to interfere on that frequency outside of people's homes and outside their property. I do not think the FCC will allow MagicJack to distribute a device that knowingly interfere with a portion of the licensed spectrum.

 

[jprad]

Quote from Drock409:

If King Cellualar crys foul....this will be off the shelves before it even hits the shelves

Could make for some interesting times.

If the wireless companies make the first move then this could blow up in their face if the courts decide that their networks are essentially backbones and magicJack could then file suit for access.

Safer to file for infringement, but that means they'd have to wait for the infringement to happen then determine the scope.

 

[spinn]

Quote from S2007S:


LAS VEGAS

The company behind the magicJack, the cheap Internet phone gadget heavily promoted on TV, has made a new version of the device that allows free calls from cell phones in the home.

[/B]

It only works in the home, it probably just transmits the cell signal to a magic jack.

 

[jprad]

Quote from tmarket:

Doesn't sound legal. FCC doesn't have low power exemptions for the cellular spectrum. The carriers paid for the spectrum. It is not clear how magicJack can highjack the spectrum, even if it is in the home. It is also not clear how any cell phone can operate with a hacked signal.

It's not the spectrum, it's the network.

Even money that the switching can't differentiate signal, that it been set up as an essentially anonymous access switching network.

 

[dtrader98]

Quote from jeffh0821:

Its actually an interesting interpretation of the spectrum licensing rules. Basically, MagicJack is claiming that the license the wireless providers have for their portions of the wireless spectrum do not extend onto private property. So, if you decide to utilize a radio frequency within your own home, and do not interfere with that spectrum outside of your property, you can utilize the device.

The problem is, in reality, the MagicJack IS going to interfere on that frequency outside of people's homes and outside their property. I do not think the FCC will allow MagicJack to distribute a device that knowingly interfere with a portion of the licensed spectrum.

Good luck with that. By that argument, you should also be able to capture satellite signals on your property for free. Although the theory sounds right, you'll never see that legalized.

In that case, you would never interfere with the signals off property, as you are only capturing local signals. What will likely happen is customers who pay a fee up front will lose it as the courts will likely end up ruling against them on those grounds.

 

[tmarket]

Quote from jprad:

It's not the spectrum, it's the network.

Even money that the switching can't differentiate signal, that it been set up as an essentially anonymous access switching network.

magicjack as described is not hacking into AT&T or Tmobile's wireless network (which is definitely illegal). It is only using the radio spectrum of the GSM phone to access a magicjack access point that could be hooked up to the internet capable router/PC in the home.

In effect, if the claim is true, it could turns any GSM phone into a internet capable phone, well at least the voip part, without using the carrier's network.