We've seen the explosion in Voice over IP phone companies, using lower IP costs (and regulatory bypass) to offer very cheap long distance. Today, in the wholesale market, you can place VoIP calls to regular phone numbers in the major cities of the world for between 0.5 cents and 1 cent per minute. So cheap that companies are routinely offering people "unlimited" long distance plans for a flat monthly fee.

The rates are cheap, but they aren't yet free, so calls don't happen without contracts and plans and arrangements.

Here's something begging to be done: The cellular carriers in the USA and Canada should allow people calling in from the internet to call any cell phone for free.

This would cost them the tiny amount they get for terminating long distance calls to cell phones, but the end result would be their own customers billing more minutes. That's what they want (sort of.) They could release a free program for use on common PCs to call any cell phone. They could have a java applet or ActiveX control to make a web page to let you call any cell phone for free, just as they let you send an SMS from a web page for free. (If you have a headset with a mic, at least.)

But allowing free and open calling would encourage lots of innovating applications from the marketplaces. Smart PBXs would coordinate and connect with company cell phones over the internet. More advanced apps would link cell phones closer to PBX functions. People who use their cell as their home phone would have another reason to do it -- now all their friends can call free from VoIP phones or any PC. Companies like Vonage would offer free calls to cell phones even for people not on the unlimited plan.

Lots of innovation because you wouldn't have to ask permission, put money into an account (even trivial amounts of money) and sign contracts.

Now there is a spam issue to worry about (though solicitations to cell phones are already illegal) but that's coming anyway. Frankly the half-penny per minute is not much of a barrier. And caller-ID would have to be a bit different. But the advantages more than make up for this.

There is some irony that Nextel, which offers free incoming calls, would have to not participate in this, or charge for the internet incoming calls. And European cell phones (and other nations too) would not be able to do this due to their poor billing choice of making the caller pay for airtime. (It seemed brilliant at first, but now it's amazingly wrong.)