MagicJack femtocell misses planned launch date

Questions remain about how the product will skirt legal roadblocks

The magicJack femtocell, a product unveiled to much excitement earlier this year, has not launched as expected during the second quarter, although the company says it will still become available this year.

It has taken longer than expected to finish the software and patents associated with the product, a spokeswoman with the company's public relations firm said. MagicJack expects the software to be complete in two weeks, after which time it can file an application for the device with the U.S. Federal Communications Commission, she said. The process of getting approval from the FCC for wireless devices typically takes several months.

It's unclear how magicJack may be able to get around apparent legal issues with offering the product. MagicJack's CEO declined to be interviewed for this story within the next few weeks, citing a heavy workload due to a recent merger.

Announced earlier this year at the Consumer Electronics Show, the femtocell product would let users make and receive calls inside their homes using their regular cell phones for US$20 a year. Calls would travel from a user's GSM (Global System for Mobile Communications) phone to a femtocell connected to their computers. The call would then be connected via VoIP. A femtocell is a small base station that extends mobile service coverage, typically indoors.

The controversy surrounds the legality of using the cellular frequencies, which are licensed to mobile operators, to carry the call between the cell phone and the femtocell. MagicJack has said that it believes people "own" the frequencies in their own homes, meaning if they buy the product, they ought to legally be able to use it.

The CTIA, the agency that represents wireless operators, has made it clear that it doesn't think magicJack should be allowed to operate the femtocell as planned. The magicJack femtocell "would clearly interfere with licensees' exclusive rights to their spectrum and carries the same potential for harmful interference as wireless boosters and repeaters," the CTIA wrote to the FCC in response to a request for comments about signal boosters in February.

Shortly after that document was made public, Ymax, magicJack's parent company, filed a comment with the FCC, strongly objecting to the CTIA's characterization of the planned offering. Ymax argues that its femtocell is not a signal booster and seems to imply that the product would be legal under the so-called Part 15 rules.

Commenting on the CTIA's accusation that magicJack's product would interfere with operator services, Ymax wrote: "It is completely irresponsible to describe things you have no knowledge of, and the CTIA in this case is once again clueless. Our femtocell does not interfere. If Ymax decides to file under Part 15, the CTIA knows CMRS spectrum has always been available for Part 15 use." Commercial Mobile Radio Services is a designation the FCC uses to describe for-profit mobile services.

Part 15 allows anyone to operate in licensed frequencies using very low power so as not to interfere with licensed users. Earlier this year magicJack said that the femtocell complies with Part 15 regulations but the company had not submitted the product to the FCC for certification under those rules.

The company spokeswoman did not specify if the company would file an application with the FCC in two weeks when the software is finished. A search of applications in the FCC equipment authorization database does not return any results for Ymax, magicJack, company founder Dan Borislow, or another affiliated company, SJ Labs.

According to the U.S. Patent and Trademark Office database, Borislow has one patent awarded for the design of a USB device and several other applications for VoIP-related products.

When announcing plans for the femtocell earlier this year, magicJack also said it would begin offering a softphone in the second quarter. That has not launched yet, the spokeswoman confirmed.

Last week, Ymax announced it had merged with VocalTec, a company that claims to be the inventor of VoIP and softphones. In a press release about the merger, the companies said that combined, they can offer products superior to competitors', such as a softphone that could be available across many products including a computer enabled with a magicJack femtocell.

MagicJack says it has sold over 6.5 million magicJacks since 2008. The magicJack is a small device that a user plugs their phone line into and then plugs into their computer, allowing them to make calls using their regular phone. The device costs $40 and the first year of service is free with subsequent years costing $20 for local and long distance calling.

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Nancy Gohring

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