Sidecut Reports

Hat tip to our old pal Andy Abramson for tracking a legal development in the VoIP world — seems like the factually elusive Daniel Borislow got his MagicJack VoIP scheme slammed by AT&T and the FCC. Andy’s post has a thorough explanation of the beef, which we will try to distill further — basically it appears that Dan was trying to subsidize the “low-cost” MagicJack plan by billing AT&T and other large carriers for completing calls, a la the old Iowa-based Free Conferencing dodges of the near past.

It was interesting to see that the FCC didn’t rule that MagicJack’s plan was illegal, immoral or unlawful — it simply agreed with AT&T that MagicJack had tried to fudge the way it described its service and that error meant that MagicJack can’t charge AT&T the fees it is claiming. What that means for us MagicJack and Borislow fans is that the Dan show probably ain’t over yet, though as we stated before you have to wonder how people can continue to put good money into a stock of a company that calls something like this a financial release.

While we are waiting to hear back from Dan (who sometimes responds to our emails, but sometimes not) anyone seen the heralded magicjack Plus or the hinted-at femtojack, which less cynical “news reporters” apparently expect to hit the streets any day now? C’mon Dan, can we at least see if one of your promises comes true?

UPDATE: Dan Borislow apparently replied to a blog post by Forbes’ Eric Savitz on this subject. You have to click to open the comments but our man Dan is in a fighting mood… as he says (we have every reason to believe it is really Dan posting) about AT&T, “We are owed the money, we suplied [sic] a valuable service and when AT&T tried to strongarm us, we told them where to go.” Read the blog post for more.

As a bit of a corollary to the post I wrote this week for my pals at GigaOM, there is the question about why aren’t MagicJack and Clearwire working together, as disruptors of the telecom status quo? MagicJack, as inventor Dan Borislaw will tell you, is making hay selling a $40 device that lets you make cheap calls over your broadband connection. And Clearwire is using WiMax to make that broadband connection cheaper.

Doesn’t the combo sound right for some of that peanut-butter/chocolate kind of hookup? It sure seems so to MagicJack’s Borislow. But so far, he says that the Clearwire folks haven’t rung his bell, despite the potential leads he might be able to provide from his customer list.

“It blows me away, the fact that they don’t call me up,” said Borislaw about Clearwire.

In their defense, the Clearwire folks are busy trialing their own version of Voice over IP, which they probably plan to charge more for than MagicJack’s $20-per-year service. Right now, Clearwire is only offering voice as a $25-per-month option in its Portland market; while Clearwire has said that its customers can use any VoIP application they choose, in previous interviews company execs like co-chairman Ben Wolff have said that they plan to offer voice services robust enough to justify the planned charges.

Sounds good — but in these economic times, MagicJack’s $20 per year might sound even better. But instead of competing, it’s gotta be at least worth a call to Borislaw to see if there’s a potential partnership, no?