Sublicensing spectrum from some wireless carrier for picocells seems
like it would be the 'right' way to go about it.  For inctance, all of
the cellular spectrum in Detroit is split up and owned by a myraid of
operators - and not just the big telecumincations giants.

Even if someone is actively using their slice, they may choose to
sublicense their signal at a low level for in home, single phone use.
Yes, technically it'll conflict with their signal, but that's where
the second part comes in to play.

Before a cell phone will connect to a tower, the tower's provider must
exist on the cellular phone's provider list - usually a few hundred
providers, in order of preference, on the phone.

Unless Magicjack is allocated a provider number, and gets every GSM
cellular provider to add them to their provider list, no phone will
connect with Magicjack's "tower" - or picocell device.

However, if they work with the hundreds of smaller spectrum owners,
they may license their spectrum, and their provider information  (set
up individually for each market depending on the lcoation of the
magicjack) and thus already exist on the provider list.

In turn they pay a fee to the provider, who would normally get a fee
for roaming minutes when a cell phone connects to their tower.

Still, that's a lot of work, and a ton of power for such a small, low
cost device.  It's attached to a computer, so it could merely be a
broadband GSM radio with some limited intelligence, while requireing
the computer ot operate the higher levels of the protocol, but even
then - it's just a lot of complexity to build out successfully.

Note that I have more experience with CDMA (and later) cellular
devices than GSM, so I may not be exact with some of the above, but
the main point should still be true - a GSM phone will not
register/connect with a provider that the main service provider does
not whitelist on the sim card, except in cases of emergency calls.

Although I'm interested to find out what they do with the ringing GSM
phone causing audio/speaker output problem - seems like a mini tower
would have that problem in spades...

-Adam
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