(Ben Heine © Cartoons)

Skype is a peer-to-peer Internet telephony network founded by the entrepreneurs Niklas Zennström and Janus Friis, also founders of the file sharing application Kazaa and the peer-to-peer television application Joost. It competes against existing open VoIP protocols such as SIP, IAX, and H.323. The Skype Group, acquired by eBay in October 2005, has headquarters in Luxembourg, with offices in London, Tallinn, Prague and San Jose, California.

Skype has experienced rapid growth in both popular usage and software development since launch, both of its free and its paid services. The Skype communications system is notable for its broad range of features, including free voice and video conferencing, its ability to use peer to peer (decentralized) technology to overcome common firewall and NAT (Network address translation) problems, its use of transparent, strong encryption and its extreme countermeasures against reverse engineering of the software or protocol.

The main difference between Skype and VoIP clients is that Skype operates on a peer-to-peer model, rather than the more traditional server-client model. The Skype user directory is entirely decentralised and distributed among the nodes in the network, which means the network can scale very easily to large sizes (currently over 171 million users) without a complex and costly centralised infrastructure.

Skype also routes calls through other Skype peers on the network to ease the traversal of Symmetric NATs and firewalls. This, however, puts an extra burden on those who connect to the Internet without NAT, as their computers and network bandwidth may be used to route the calls of other users.

The Skype client's application programming interface (API) opens the network to software developers. The Skype API allows other programs to use the Skype network to get "white pages" information and manage calls.

The Skype code is closed source, and the protocol is not standardized. The Windows user interface was developed in Pascal using Delphi, the Linux version is written in C++ with Qt, and the Mac OS X version is written in Objective-C with Cocoa. Parts of the client use Internet Direct (Indy), an open source socket communication library.


SkypeOut allows Skype users to call traditional telephone numbers, including mobile telephones, for a fee. This fee is as low as USD$0.024 per minute for most developed countries, and as high as USD$2.142 per minute for calls to the dependency of Diego Garcia. Beginning January 2007, Skype also charges an equivalent of 0.039 Euro for each SkypeOut call, in addition to the ordinary rate. After 180 days of not making a SkypeOut call the Skype balance expires. As of January, 30th 2007, SkypeOut calls to Canada and The United States are no longer free.

SkypeOut calls to most toll free numbers in France (+33 800, +33 805, +33 809) , Poland: (+48 800) , UK: (+44 500, +44 800, +44 808 ) and the United States and Canada: (+1 800, +1 866, +1 877, +1 888 ) are free for all Skype users, even if they do not have the SkypeOut service. However, for many other countries SkypeOut doesn't support calling toll-free and premium rate numbers, and SkypeOut doesn't support calling emergency numbers (such as 112 in Europe or 911 in the U.S.A.).

Quality of service is not guaranteed and dropouts, broken connections and compression distortion are frequently observed by users.

Skype Me

By connecting users around the world via voice, Skype has opened up a wellspring of people who want to communicate with people from other countries. To facilitate these people, Skype lets users set their status to "Skype Me," which indicates they are open to callers from around the world. Setting one's status to Skype Me attracts a number of callers who want to practice a foreign language (usually English), in addition to the expected scammers and spammers.



Skype has been criticised over its use of a proprietary protocol, instead of an open standard like H.323, Inter-Asterisk eXchange, or SIP, since this makes it much more difficult, if not impossible, for other developers to interact with Skype. Some have theorized that the decision was made to prevent competition over business with SkypeOut.

Due to the design of the protocol, if given access to an unrestricted network connection, Skype clients can become supernodes. These supernodes hold together the peer-to-peer network and provide data routing for other clients behind more restrictive firewalls, which can generate a significant amount of bandwidth usage. For this reason, some network providers, such as universities, have banned the use of Skype.

A third party paper analyzing the security and methodology of Skype was presented at Black Hat Europe 2006. It analyzed Skype and made these observations:

  • Heavy use of anti debugging techniques (used to deter development of alternative clients, hacking tools)
  • Significant use of obfuscated code (slows reverse engineering, less description of what program code does internal to the executable file)
  • Keeps chatting on the network, even when idle (even for non-supernodes. may be used for NAT traversal)
  • Blind trust in anything else speaking Skype
  • Ability to build a parallel Skype network
  • Lack of privacy (Skype has the keys to decrypt sessions)
  • Heap overflow in Skype
  • Skype makes it hard to enforce a (corporate) security policy
  • "No way to know if there is/will be a backdoor"

SkypeOut rates are "per minute" based, contrary to the trend in charges for calls from conventional telephones. In some countries, many calls are charged at a specified fixed amount per call. In this method, SkypeOut is more expensive for longer calls, whereas it is cheaper for relatively short calls.

Another criticism of Skype has been content filtering.

While available for Windows, Mac OS X and Linux operating systems, there is no Skype version for the Palm OS, used in mobile devices like the Treo 700p smartphone.

Furthermore, Skype does not support Windows Vista (or at least not fully). This problem is further compounded by the fact that Skype has not announced any kind of Vista-Compatible Skype release date (or version), even though Vista has been on the market for a long time now. For customers that rely on Skype, this may prevent them from upgrading to Vista completely.

Skype has been criticized in the Linux community for bugs and delays in the Linux version . The Mac OS X version also lacks some of the advanced features included in Skype for Windows.

There have also been criticisms of Skype blocking and disabling customer accounts from using the SkypeOut service .

Also, when using SkypeOut to call toll-free numbers, users may experience call degradation when using the keypad to enter numerals into automated systems.

Skype was also found to access BIOS data to identify individual computers and provide DRM protection for plug-ins.

Legal and political aspects

Skype faces challenges from two main legal and political directions - challenges to its intellectual property, and political concerns by governments who wish to exert more formal control over aspects of their telecommunications systems.

Skype's technology is proprietary and closed to outside review. It is unknown to what extent it can potentially intrude upon other parties' patents and copyrights. It is not unreasonable, therefore, to expect legal challenges from third parties concerning Intellectual Property issues.

Skype also supply Skype-in phonelines without requiring proof of address, which is illegal in some countries.

Legal challenges

Streamcast lawsuit

In January, 2006, StreamCast Networks filed a complaint in U.S. District Court in Los Angeles, accusing Skype of stealing its peer-to-peer technology. The $4.1 billion lawsuit did not initially name eBay, Skype's parent company; however, the lawsuit was amended in a filing with Federal Court in the Central District of California on May 22, 2006, to include eBay and 21 other parties as defendants.

Streamcast seeks a worldwide injunction on the sale and marketing of eBay's Skype Internet voice communication products, as well as billions of dollars in unspecified damages.

IDT lawsuit

On June 1, 2006, Net2Phone (the Internet telephone unit of IDT Corp.) filed a lawsuit against eBay and Skype accusing the unit of infringing U.S. Patent 6,108,704 , which was granted in 2000.

Political issues

China 2005

For a brief period, SkypeOut was blocked in some regions of mainland China (notably Shenzhen) by the operator China Telecom for undisclosed reasons; it has been speculated that this may relate to SkypeOut's ability to take lucrative international and long-distance business away from the People's Republic of China's state-controlled telecommunications companies.

Skype is one of many companies (others include AOL, Google, Microsoft, Yahoo, Cisco) which have cooperated with the Chinese government in implementing a system of Internet censorship in mainland China. Critics of such policies argue that it is wrong for companies to assist in such policies, which might allow them to profit from censorship and restrictions on freedom of the press and freedom of speech. Human rights advocates such as Human Rights Watch and media groups such as Reporters Without Borders state that in their view, if companies stopped contributing to the authorities' censorship efforts the government could be forced to change.

Niklas Zennström, chief executive to Skype, told reporters that its joint venture partner in China is operating in compliance with domestic law. "Tom Online had implemented a text filter, which is what everyone else in that market is doing," said Mr Zennström. "Those are the regulations," he said. "I may like or not like the laws and regulations to operate businesses in the UK or Germany or the US, but if I do business there I choose to comply with those laws and regulations. I can try to lobby to change them, but I need to comply with them. China in that way is not different."

France 2005

In September 2005, the French Ministry of Research, acting on advice from the general secretariat of national defence, issued an official disapproval of the use of Skype in public research and higher education; some services are interpreting this decision as an outright ban. The exact reasons for the decision were not given, but speculatively may relate to issues noted earlier, relating to inability to monitor the nature of information being communicated, possible extreme resource usage, or unknown potential actions of the software.

United States, CALEA 2006

In May 2006, the FCC successfully applied the Communications Assistance for Law Enforcement Act to allow wiretapping on digital phone networks. Skype is not yet compliant to the Act, and has so far stated that they do not plan to become compliant.

India 2006

In December 2006, the Government of India announced they are preparing a crackdown on Internet telephony services, citing security risks and loss of revenue. The clampdown is targeted at outsourcers and other Indian IT businesses that use foreign owned Internet telephony services, such as Skype and Yahoo!, to cut their phone bills and evade the six percent revenue share and 12 percent tax imposed on local services by the government. According to The Times of India, companies must reveal the names of licensed service providers they purchase bandwidth and internet telephony minutes from. Companies will also have to undertake that they will not use the services of unlicensed internet service providers.

United Arab Emirates 2006

Skype was abruptly blocked in the UAE for undisclosed reasons—Skype users in the United Arab Emirates are being blocked from the site, which prevents them from buying minutes for use with SkypeOut and taking advantage of deeply discounted international calling rates. The blockage has been speculated to originate within Etisalat, the only ISP in the UAE. Since Etisalat has a monopoly on telephony there, the motive could be economic, or it could be one of political control due to Skype's encryption of conversations.


The Sultanate of Oman has also blocked access to the website preventing users from accessing skypeout in order to maintain Omantel's monopoly on the telecommunications market in the country. This has also to do with security issues as well as economic ones as it is difficult to monitor the calls made with skype. If one is to attempt to reach the Skype webpage, the monitor says: "Access Denied (policy_denied) Your system policy has denied access to the requested URL. For assistance, contact your network support team." Many other Persian Gulf countries pursue similar policies regarding Skype for largely the same reasons.


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