Since the release of Skype for the iPhone and iTouch last week it has been downloaded over 2 million times. That breaks down to about 2-3 downloads per second since it was released on March 31 despite being limited to use on a Wi-Fi connection and not a cellular connection.

Apple forces the Wi-Fi restriction on iPhone software developers but most speculate this is because of pressure from carriers that sell the iPhone and provide service for it. AT&T’s top public policy executive Jim Cicconi was recently quoted as saying, “We absolutely expect our vendors [Apple in this case] not to facilitate the services of our competitors. Skype is a competitor, just like Verizon or Sprint or T-Mobile. Skype has no obligation to market AT&T services. Why should the reverse be true?”

Apple has yet to make a comment on the issue because the ability of VOIP apps like Skype to use the 3G network could greatly increase the utility of a device like the iPhone, possibly increasing sales.

There has been a lot of concern about the issue since the opening of the iPhone App Store, but the release of Skype has finally caused action to be taken. An internet advocacy group called Free Press has asked the FCC to investigate whether or not this practice is a violation of federal law. In the letter Free Press asks the commission to clarify if wireless internet service falls into under the same policy standards as traditional broadband internet. The letter cites restrictions on Google Android phones using T-Mobile’s network in addition to the iPhone Skype restrictions.

The FCC released an Internet Policy Statement in 2005 with guidelines on how they will regulate the internet. The policy states that, “To encourage broadband deployment and preserve and promote the open and interconnected nature of the public Internet, consumers are entitled to run application and use services of their choice, subject to the needs of law enforcement.” This isn’t a blanket net neutrality law, but allows the FCC to enforce a neutral internet on a case by case basis. In 2005 the FCC enforced this policy on Madison River Communications for blocking VOIP services over their DSL lines. Madison River was ordered to stop the practice and pay a $15,000 fine to the FCC. This precedent implies that if wireless internet services are categorized under the same policy as traditional broadband then AT&T will have to allow Skype on their network.

Skype has also caused a stir in Europe where T-Mobile, Apple’s iPhone distributor in Germany, has said that in addition to not allowing Skype on their 3G network they will also be banning it on their Wi-Fi hotspot network. T-Mobile Germany has threatened to cancel the accounts of anyone who tries to work around these restrictions. In response a coalition of companies including Skype, Microsoft, and Intel have asked the European Union to enact policy to protect the consumer’s right to use any application they please.

Despite the restrictions there are numerous reports around the internet of hacked iPhones being able to use Skype on AT&T’s 3G network without any problems. This would indicate that network capacity isn’t an issue.

The impact of the FCC and EU’s decision on this issue could have far reaching implications on the future of mobile development as a whole, not just VOIP. A decision will determine what usage restrictions mobile carriers can put on their networks, possibly impacting peer-to-peer applications, video streaming, online gaming, and other applications.