AT&T allowing Skype iPhone calls over cell network

AT&T, the biggest U.S. cellphone provider, is allowing AppleiPhone users to use Skype over its cellphone network, a move that will significantly lower the cost of local and international voice calls.

The cellphone carrier was expected to make the announcement Tuesday in a filing with the Federal Communications Commission, but Skype confirmed the move with a blog post before an official AT&T release.

"All of us at Skype applaud today's announcement by AT&T (in an FCC filing to be published shortly) that it'll open up its 3G network to internet calling applications such as Skype," wrote Skype president Josh Silverman."It's the right step for AT&T, Apple, millions of mobile Skype users and the internet itself."

Skype released its internet calling application for the iPhone, as well as the iPod Touch, in many countries six months ago, and in Canada last month. Until now,customers were restricted to using Skype which provides free and low-cost calling only when their device was connected to the internet via its wi-fi capability.

AT&T and other cellphone carriers have not allowed Skype to connect to their 3G networks because they were afraid that customers would ditch their voice plans, which are a big source of revenue. By allowing cellular Skype connections, AT&T is risking customers paring down their monthly bills to just data plans.

The company made the move because of increased scrutiny from the FCC, which is in the midst of enshrining its net neutrality principles as law. The rules will prevent internet providers including cellphone carriers from discriminating against or interfering with certain internet content and uses, such as Skype.

Silverman said that although AT&T's move was a good step, the FCC's rules are still needed.

"Nonetheless, the positive actions of one company are no substitute for a government policy that protects openness and benefits consumers," he wrote.

AT&T's move will pressure carriers around the world to follow suit. Rogers, currently the only iPhone providerin Canada,is about to get company, with rivals Bell and Telus both announcing on Tuesday that they will offer the device on their newly constructedjoint network starting in November.