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magicJack Head: Femtocell Device 'Definitely Legal,' Standalone Phone and Apps Coming Too

It's amazing what a low price and a marketing blitz can accomplish. magicJack, the pocket-size USB plug-and-play VOIP service, has sold over 5 million units since its 2007 debut. The much-wanted Linux support and number portability are still on the drawing board, but the company (led by the its candid creator Dan Borislow), is branching off into new, exciting territories.

During CES 2010, magicJack publicly announced its upcoming femtocell (news that Mr. Borislow gave us months before), a device that enables GSM cell phones to connect through the YMAX Voice Network and sends voice data over the carriers' towers. There's been some rumblings about the legality of this, so we decided it time to contact Borislow once again for the real deal on femtocell, other magicJack products, and a rival: the magicJack-inspired netTALK.

When can we expect the new magicjack and what's the estimated price?
The femtocell should be out in Q2 for around the same price as the current magicjack.

The femtocell has been the cause of some debate in regards to its legality. How are you allowed to place calls using the carrier's networks?
It's definitely legal. There are a couple of different ways to go. You can operate under Part 15 [a section of the FCC regulation regrading unlicensed transmissions], and there's further exemptions if you operate under a boat, plane, or any transportation. They're all exempt as well even without Part 15. You can use it in a car, taxi, in a park, a home, anywhere.

Are there any limitations?
There's a power restriction, but it shouldn't affect what we want to use it for.

Will this replace the current magicJack or be sold along side it?
It doesn't have a connection for a land line phone, so the previous one won't be discontinued. You can use it with a cell phone or existing magicJack.

Besides the femtocell, what else is in store for magicJack in 2010?
We've had a major upgrade in the last two weeks. All of your call logs and contacts, they're on the network. They're off the jack. So if you were to break your jack or had a mobile magicJack, everything is on the network and you never have to worry about losing the contacts.

We also did that because we're coming out with a standalone phone similar to Skype, except it will be six times cheaper and the quality will be significantly better. That'll be second quarter. After that you can expect BlackBerry and iPhone apps in the late 3Q. Its another reason to get the contacts on the network.

Do you see a change in the way that carriers conduct business now that magicJack has made such and impact?
They're really focused on wireless, that's why the femtocell is such a good proposition for their customers. They get to use the same phone; they don't have to worry about going to a different carrier. The carriers are going to concentrate on the wireless, and I'm going to concentrate on everything else .

I'm sure you've heard of netTALK, the new magicJack rival. Any opinions on the device?
It's a piece of sh*t. It has static. The call quality is pathetic. There's no phone numbers available, and it's run by a bunch of fly-by-nights with no assets. They'll be bankrupt soon. We're a real company with the best network and best software.

What are your thoughts on femtocell? Are Borislow's reassurances enough to get you excited?