Skype has just announced that it’s giving away its SILK speech codec, which is the bit of software that processes your voice into a small enough stream of data for you to be able to communicate over a slow internet connection. A codec is basically a balancing act between file size and audio quality.

The SILK codec has been in development for three years at Skype and was finally bundled with the most recent release of the software – Skype 4. It’s a major step forward in audio quality and scales depending on the bandwidth available.

So if it’s so great, then why is Skype giving it away royalty-free to its competitors? Good question. My best guess is that Skype has the VoIP market so firmly tied up that it wants some competition to help grow the whole market. Then, I suppose, it’s confident enough that those users will switch to Skype thanks to its fantastic software.

It might also be a sign that Skype’s considering offering an API. Opening up the service, which is famously closed, would mean that other programs could be able to make Skype calls natively, without people having to open and install Skype itself. It could mean that you’ll just be able to highlight phone numbers on websites and right-click to call them from the browser.

More information’s available on the SILK website, and TechCrunch has an interesting take too.