Google Voice and FaceTime

Lately it seems like there is endless news around messaging, VoIP and video calling. Apple recently announced they'd added FaceTime support for the Mac, and had shipped 19 million FaceTime-enabled iOS devices since June. Google Voice also made headlines last week for an outage, but I think the bigger news associated with that downtime is how fast they've been growing. And there's been a flurry of startup activity around messaging and communication as well, such as the super innovative GroupMe releasing an Android App.

The future of communication on your smartphone

Imagine the future of communication on your smartphone: you're on a video call with your significant other across the world on different networks, you tap your screen, and instantly their phone screen mimics yours as you flip through photos of your trip while continuing your call. Or imagine sending out an MMS to a group, and when each of your friends open it they immediately tap into a live HD audio/video stream which you're broadcasting to everyone. No delays, no dialing, and no going in and out of different appsâ€"it just works.

All of these amazing use-cases, and more, will be enabled by 4G wireless standards. This is because 4G is 100% IP-based, which is what the internet was founded upon. Today, voice is routed separately from data on mobile networks due to legacy "circuit-switched" architecture. With LTE, the first phase of 4G, voice and video sessions will be packetized and sent over the network from your smartphone just like any other application layer data, which will open a range of new capabilities.

Guess when they plan to resolve all this? 2013! Per this AT&T slide from a few weeks ago. And it's easy to envision any resolution extending years past this date, which is crazy considering what's at stake for the carriers as they struggle so stay relevant in voice communication.

FaceTime best foreshadowed their dwindling relevance, since video calls over WiFi bypass the carrier network entirely. And though FaceTime doesn't yet work on 3G you can see the writing on the wall. Meanwhile Google Voice still requires you to dial out using your carrier's network, but Google's acquisition of Gizmo5 last year foretells this will go away in favor of full VoIP too. Then of course there's Skype, which now works over 3G, bypassing the voice network of your carrier too.

The process of transitioning from a telco model

Carriers are in the process of transitioning from a telco model, which is closed, to the internet model, which is open. In the old days it was deemed acceptable for them to stew over standards for multiyear periods, but innovation on the internet doesn't work this way.

The future in mobile communication is being written at the application layerâ€"both by innovative giants like Apple and Google, and smaller startups such as GroupMe and Twilioâ€"not at the infrastructure layer by the AT&Ts and Verizons of the world. The carriers had a chance to provide a better voice and messaging experience with 4G, and to charge a toll for that experience, but they are missing that window.

Apple and Google are closing it fast. Back in June, when iPhone 4 was released, people wondered why Apple open-sourced FaceTime. Here is one important reason why: A closed standard may have caused an overly fragmented market for video-calling, which would definitely benefit the carriers. This is  likely, at least in part, why Steve Jobs decided to open-source FaceTime, as any open standard’s success in video/telephony limits the power of the carriers.

The funny thing is

The funny thing is, they seem to be screwing it all up without Steve's help. There is simply no doubt that the future of voice and messaging is with companies innovating at the application layer, and my guess is there is going to be a ton of investment activity and  M&A in this space as new realtime communication tools are developed over the next few years.