Matthew Lasar at Ars demystifies how the ubiquitously advertised MagicJack actually functions. The current generation technology is just a low price VoIP solution. It was never clear to me from their oddly, parametrically branded TV spots that a broadband connection is required but it is.
The meat of Lasar’s article, though, discusses the brewing battle between traditional cell phone players and the upstart around its next generation device which utilizes a femtocell to provide the same low cost option without the need for a broadband connection. It is still a bit unclear how this will work in practice. Maybe it is a mesh of femtocells or maybe the femtocells ultimately piggy back on existing cell networks like smaller carriers like Virgin and Cricket do already.
Regardless, the large wireless players are not happy with the devices and trying to persuade the FCC to shut them done for fear of interference and for preventing spectrum licensees in the cellular bands from exercising their exclusive licenses. Hopefully if the FCC does intervene, it will keep to its open network principles and treat the devices more like wireless handsets or WiFi routers, making them pass certification for non-interference, rather than banning them outright. It would be a shame to penalize a company that has found a clear, innovative use for femtocells from which customers might actually benefit.