magicJack Eliminates Cell Phone Fees: Pirate Femtocells

magicJack, the budget Internet phone device, showed off a new version at CES 2010 that acts as a miniature cell phone tower, which allows mobile phone users to make calls to the US and Canada for free. MagicJack is similar to the femtocell devices offered by some mobile service providers, but are less expensive and complicated, since magicJacks don't need to respect a mobile phone's current provider setup.

Is magicJack a scam? No, not for the end user, but, since mobile phone service providers pay billions of dollars to use radio frequencies that magicJack is leveraging for free, I'd expect them to be either regulated or sued out of existence before too long. Meanwhile, reviews of the current magicJack aren't exactly stellar.

The magicJack is a small device that plugs into a computer, which in turn must be connected to the Internet. Whenever a compatible mobile phone comes within seven feet of it, the magicJack sends a code to the phone, which, when dialled, routs the call over the Internet rather than across the towers managed by the user's service provider. magicJack only works with GSM phones, so Verizon and Sprint users are out of luck.

YMax, the company that makes magicJack, says that their product is legal under US law, since witeless spectrum licences don't extend into private homes, but YMax won't necessarily get the last word on this.