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The most interesting device to come out of the recent Consumer Electronics Show was a new gadget from Palm Beach, FL based YMax, Corp. (not to be confused with "WiMAX"), the company that produced the innovative MagicJack. While the original MagicJack aimed at reducing the cost of basic wired telephone service, their new device is effectively a femtocell. Like a carrier-provided femtocell, the device will improve indoor cellular coverage for any GSM cell phone, but it involves no equipment or fees from the cellular carrier.The original MagicJack was an ingenious device for providing VoIP services to anyone with a computer and broadband Internet connection. The user plugs the $40 MagicJack into a USB port on their computer, connects a basic analog telephone to it, and they get free VoIP telephone services for one-year; after the first year the service costs $20 per year. The do not support number porting as yet, so you are assigned a phone number by MagicJack. YMax claims to have sold 5 million MagicJacks in the last two years, and roughly 3 million are in active use. That would give YMax a bigger customer base than Internet phone pioneer Vonage.

The new version builds on the basic MagicJack concept but adds what is essentially femtocell capability. Like the original MagicJack, the new device plugs into the USB port on a computer with a broadband Internet connection. When a GSM cell phone (i.e. AT&T or T-Mobile in the US) comes within eight feet of the device, it will sense the phone and place a call to it. The user answers the cellular call and enters a code on the handset to associate it with the MagicJack.

While the handset remains within range, the femto/MagicJack will route your cellular calls over your broadband connection, and there will be no cellular airtime charges; the company claims the device will cover a 3,000 square foot house. It is unclear whether the MagicJack will support both incoming and outgoing calls, or if it will also support cellular data services. Further, it is unclear whether in-progress calls can be handed off between the MagicJack and the mobile operator's macro network. There is virtually no information on YMax's Web site.

The one big question surrounding this innovation is whether it is legal for the MagicJack to make use of the cellular frequencies, which are owned by the cellular carrier. YMax claims the device is legal because wireless spectrum licenses don't extend into the home; that is distinction exists in the regulations, I have never come across it. For the moment, neither the carriers nor the FCC has commented on the legality of the device. As the carriers are selling their own femtocells for a couple of hundred dollars and charge airtime for the calls (you can get a flat rate plan for femto calls), I'm sure they will have something to say about this.

Conclusion Once again, the most creative developments in wireless are coming from the consumer rather than the enterprise sector. I am still trying to figure out how they managed to make this thing work, but I'm flat out amazed. Undoubtedly, there will have to be a regulatory decision to determine if the MagicJack innovation violates the carriers' licenses. On the outside chance that YMax succeeds in the regulatory fight, this opens a raft of possibilities for enterprise networks. Rather than looking to technologies like voice over wireless LANs or DECT to reduce the cost of in-house cellular usage, enterprises could potentially get a free ride on the cellular frequencies without picocells, distributed antenna systems, and all of the trappings of a traditional indoor cellular configuration. If nothing else, it would allow the user's cell phone to act like a cordless extension while in close proximity to their desk.

I for one will be watching this development with great interest.Undoubtedly, there will have to be a regulatory decision to determine if the MagicJack innovation violates the carriers' licenses.

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