I moved house recently and decided to go with iiNet for my ADSL. What sealed the deal was their iiNetPhone service, a SIP based VoIP service. I have been using SIP on and off for a while, but not with dedicated hardware. The lure of a supported VoIP service, with the hardware to go with it was too much to resist. I should have know better.

The iiNetPhone service is crippled. Yes, you can call a whole heap of normal numbers without a problem, but just try and call a SIP address belonging to another provider. No Joy. Same for receiving calls to your SIP address.

iiNet have decided to block those calls at their proxies in the vain hope that this will encourage friends of exisiting iiNetPhone users to sign up with them as well. If this sounds vaugely familiar, it's because we've been through this crap before with another communication format; SMS.

Back in the early days of GSM, Optus, Telstra and Vodafone all decided that they wouldn't play ball when it came to SMS and SMSes from one provider to another would be blocked at the exchange. Calls would go through, but not SMS.

The marketing logic behind this was if customers wanted to SMS each other, they would need to join the same provider. What really happened is that no-one used SMS because it was too unreliable. Finally one of the marketing departments (I think it was Vodafone's) realised they would have a competative advantage if they allowed SMS from any provider, the other providers quickly followed suit. The end result is that SMS is a cash cow for mobile phone providers to this very day.

iiNet should look at how they can make calls to other SIP addresses a cash cow, because rather than simply not using VoIP (as was the case for SMS), people will turn to other VoIP providers. iiNets policies aren't attracting customers, they are driving them away.