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Glitch takes Skype calling service off-line

Many users are unable to connect. It's the latest problem for Net phone offerings as they struggle for acceptance.

August 17, 2007|Jim Puzzanghera | Times Staff Writer

WASHINGTON — Internet phone services let people make calls for little or no money. Some customers are getting what they pay for.

A software problem left many users of Skype, the popular program that routes calls over the Internet, unable to connect Thursday. Skype told customers early in the day that it hoped to fix the glitch within 24 hours.

The EBay Inc.-owned service would not say how many of its 220 million registered users were affected, but problems were reported around the world, including in the United States, Europe, South Africa and Brazil.

The outage marked the latest credibility problem for Internet phone companies, which are struggling with reliability issues as they try to lure people away from their land line phones.

"Consumers want their phone to work very well, sound very well and work all the time," said Sally Cohen, an analyst with Forrester Research. "If you're positioning yourselves as a land line replacement and one of those three aren't met, the consumer's going to be unhappy."

After the Skype outage, people can be forgiven for wondering whether Internet calling is ready for prime time.

Vonage Holdings Corp. has seen a drop in new subscribers and its stock has plummeted in the last year, partly because of a federal court's ruling that the company violated patents held by Verizon Communications Inc. Vonage's residential calling plans cost about $24.99 a month for unlimited calling in the U.S. and Canada.

Another provider of Internet calls, SunRocket Inc., abruptly shut down last month, leaving thousands of customers without phone service.

Marc Kruskol, who runs a public relations firm from his Van Nuys home, was one of them. He was paying about $99 a year.

"I make a lot of phone calls around the country, even internationally, and I need to save money where I could," he said.

After SunRocket folded, Kruskol was happy that another Internet phone company, TeleBlend, stepped in to offer service to SunRocket customers.

Then his TeleBlend service went down for several days, he said.

"It really hurt my business. Clients were calling and wondering why my phone wasn't working," he said. "If it continues to be problematic, I might even consider getting a hard-wired land line."

Traditional phone lines aren't immune from problems. A computer glitch in 2005 cut phone and Internet service for as long as 12 hours to at least 150,000 Verizon customers in Southern California.

But analysts said land-line phones were more reliable than those that used the Internet.

Forrester has found that 87% of people intend to stick with their current phone provider. Internet companies can try to lure customers with lower costs and high-tech features, such as instant messaging, but shouldn't tout themselves as an equal replacement for hard-wired phones yet, Cohen said.

Norma Joyce and her husband spend part of the year in San Miguel de Allende, Mexico, and use Skype to stay in touch with their four children and grandchildren in the U.S.

"Today is my oldest daughter's birthday! So I am waiting and hoping that it will start up soon," Norma Joyce wrote in an e-mail.

EBay bought Skype Technologies for $4.1 billion in 2005, hoping the ability to complete online phone calls would make haggling over auction items easier and lead to more deals.

The service lets people call other Skype users for free and connect with different phone services across the globe for a per-call fee, which ranges from about 6 cents a minute to $3 a minute.

Skype also offers unlimited calls in the U.S. and Canada for $29.95 a year and incoming calls for $60 a year.

Thursday's outage was one of the first that many users could remember. The company attributed it to "a deficiency in an algorithm within Skype networking software."

Most Internet phone users are comfortable with new technology and willing to endure an occasional glitch, said Alan Weckel, a senior analyst at Dell'Oro Group.

"But if this becomes a frequent occurrence," he said, "there is going to be some reluctance to go with them."


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