Speakeasy The Latest VoIP Provider To Block Certain Calls

from the this-is-going-to-get-messy dept

A few weeks back, we noted that VoIP provider MagicJack had begun blocking calls to certain numbers it didn’t like — specifically free conference numbers that were using a regulatory arbitrage loophole that required the networks of incoming calls to certain rural telcos to pay huge connection fees, creating incentives for those telcos to develop cheap or free services that brought in lots of calls. Then, a few weeks ago, it came out that Google was blocking similar calls via its Google Voice offering. I still believe that offering a telephone service that connects to POTS requires that you complete all non-fee-based (i.e., 900 number) calls, according to an FCC order in 2007 on this particular subject. Google and MagicJack disagree.

However, with more and more people switching to VoIP services, combined with more and more VoIP providers going down this route, it’s becoming a big issue, quickly. Harold Feld notes that Speakeasy is the latest VoIP provider to go down this route, blocking similar calls. To Speakeasy’s credit, however, unlike both MagicJack and Google, it at least clearly alerted customers to this change, and also publicly lists out the blocked numbers. It’s amazing that Google and MagicJack did not do either of these things.

Still, as Feld notes, this is becoming a big deal. It’s likely that more and more VoIP providers are going to quickly go down this same path, and the phone system will start to splinter. This is bad. For a phone system to work, you shouldn’t have a situation where the service you use can arbitrarily refuse to complete certain phone calls. The real answer is to get rid of the arbitrage loopholes. The rural telcos are clearly abusing the rules. Yes, this could seriously curtail various free conference calling solutions, but that’s better than the alternative.

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Companies: google, magicjack, speakeasy

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Comments on “Speakeasy The Latest VoIP Provider To Block Certain Calls”

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42 Comments
Kazi says:

Shouldn’t the law just forbid such excessive fees by rural telcos? Furthermore, it’s mainly due to the law requiring those rural telcos to be connected. An open market (i.e. no rules for them requiring to be connected) would probably lead to different business practices in rural areas – maybe not as lucrative but competitive?

ChurchHatesTucker (profile) says:

Re: Re:

“An open market (i.e. no rules for them requiring to be connected) would probably lead to different business practices in rural areas – maybe not as lucrative but competitive?”

The idea was to use the fee to subsidize the cost of hooking up rural customers. While clearly being abused currently, that cost has to be borne somewhere, and it’s unclear what would replace it.

Ryan says:

Re: Re: Re:

The idea was to use the fee to subsidize the cost of hooking up rural customers. While clearly being abused currently, that cost has to be borne somewhere, and it’s unclear what would replace it.

It seems obvious to me that the cost should be borne by rural providers like anything else, with the cost passed on to rural customers to the degree that providers can compete and still make a profit. There is absolutely no reason why people anywhere else should have to subsidize the additional cost required to connect more expensive users.

As a side note, if I understand the arbitrage regulations correctly, this is one of the dumbest ideas since the automatic groin-targeting self-punch machine. How could anybody think that forcing telcos to pay extortionate and arbitrary fees to incentivize scammers to take up rural connectivity services would be a good idea or not get abused?

Anonymous Coward says:

Re: Re: Re: Re:

There is absolutely no reason why people anywhere else should have to subsidize the additional cost required to connect more expensive users.

It’s done for societal reasons. You could also say there is absolutely no reason the telco should be able to use utility right-of-ways across private lands (enforced by the gov’t), but it is deemed to be in the greater interest of society to do so.

That kind of reasoning is applied to other services as well. For example, at one time, the post office would not deliver mail to rural locations because it cost more to do so. They only wanted to service the most profitable population centers and if people in the country wanted mail delivered they had to get a post office box in one of those population centers and hire private carriers to go get it for them. Congress put a stop to that and passed laws requiring universal mail service to all domestic areas and for the same fee. There are still those who disagree with that as well.

Jerry Leichter (profile) says:

Get rid of free calls ... sort of

Another approach would be for the VoIP providers to (a) charge back the connection costs on each call; (b) provide a rebate per call up to some amount, which would render all “normal” calls free. Then there’s no problem allowing calls to one of these expensive numbers – the costs will end up on the user. (Of course, it’s important that the VoIP provider make it very clear what the call will cost – preferably at the time the call is placed.)

With this approach, increasing use of VoIP will lead to increasing pressure on the conference call providers to change their ways….

— Jerry

Dark Helmet (profile) says:

Hmm

Ontopic: There seems to be two thoughts on how to properly correct this. We can either amend the troublesome law to further regulate the amount on the fees, or we can hack out the law entirely and furter deregulate.

Regulation is only as good as thoughs doing the regulating. In this case? Just hack out the law and go back to the drawing board.

Offtopic: It’s really fun occasionally to go back through the older stories, especially those over a year old, and see who you recognize in the comments section. I suggest everyone try it. Who remembers the Weird Harold days? 🙂

Fred McTaker (profile) says:

Re: Hmm

“Just hack out the law and go back to the drawing board.”

I agree to the basic premise here, but I would go further and just hack out the old outdated tech, and have everyone upgrade to all-data lines plus VoIP (this can be done the Earthlink way, where the VoIP equipment is at the local colo, so the house connection just acts like a regular phone line). Get rid of the old minor remnants of the POTS system entirely. If you think your current “long distance” phone provider doesn’t use VoIP tech internally, you’re hopeless. Instead of Universal Telephone service we should have Universal Internet service, with a VoIP address registration requirement per building (for 911 and reverse-911 purposes). Concepts like area-codes and domestic long distance calling have been outdated since cell phones in the late 80’s and should all be abandoned. Most of the old POTS based system should go along for the ride, into the trash bin of history.

Before people start yelling “but what if I’m not in DSL range?” you need to realize that analog audio is just another form of data. It can be digitized and compressed to use less of your POTS bandwidth than it does now, and you can use the leftover bandwidth for other data. Even if the space for other data is just a few Kb/s, that’s better than what you can do with an old POTS type modem that isn’t tolerant of simultaneous voice calls. Besides, government should have the incentive to bring you more broadband options, rather than stick you with an over-priced rural POTS connection like they do now.

Anonymous Coward says:

Re: Re: Hmm

If you think your current “long distance” phone provider doesn’t use VoIP tech internally, you’re hopeless.

It’s always funny when someone who doesn’t know what they’re talking about comes along and, thinking that they do, starts spouting off and insulting people. Talk about “hopeless”.

No, telcos don’t typically use VoIP internally. They use systems specially designed for the purpose, often ATM based, that are far more efficient and reliable for telco use.

Considering the technical ignorance already demonstrated, I won’t even bother with the rest of the comment. The lesson for others: If you want to give technical lectures, learn what you’re talking about first.

Misanthropist (profile) says:

I disagree absolutely

The real answer is to get rid of the arbitrage loopholes.

Just like 900 numbers, there is no reason that anyone should be compelled to connect calls that require extortionary fees.

There’s no need for legislation… Just block the calls. The businesses being hosted there will simply go out of business when people find out their “free” host wasn’t actually free and isn’t actually available to the parties they invited.

This isnt rocket science… thats an abusive leach. Don’t outlaw abusive leaching.. just don’t require people submit to abusive leaching and the problem goes away.

Just because the telcos (intentionally) created a stupid rule, doesn’t mean we should make everyone else pay for their mistake.

Mike, this might be the first time you have suggested that “there ought to be a law” to handle a free market mistake.

Stuart says:

Yes it should

I am absolutely in favor of a company offering free or super cheap phone calls to block phone calls to numbers that use stupid US laws to charge massive amounts of money for a nothing call. Hopefully if more providers do this it will stop this insanity. And umm Mike…. You should be in favor of this. Seriously. It is the right thing to do.

The Most Known Unknown (profile) says:

Re: Yes it should

Just wait ’till ATT and the other RBOC’s start blocking calls to the VoIP providers. Remember who has the bigger user-base and clearly remember the defensible position this “blocking” insanity is raising for ATT and the RBOC’s.

We are clearly on the brink of the end of the VoIP telephony providers in present form.

The RBOC’s and tier-1 IXC’s are celebrating.

diabolic (profile) says:

Mike, which 2007 FCC ‘order’ are you referring to specifically that you believe requires VoIP providers to connect calls to all ‘non-fee-based’ PSTN numbers?

By the way, I think you are confusing POTS with PSTN. POTS = Plain Old Telephone Service, this is the analog type of service that you might get at home from a Bell operating company.
PSTN = Public Switched Telephone Network, this includes both analog and digital service, your home phone and T1 type service a business might use. While I have no proof, I’m quite sure that FreeConferenceCall uses T1 lines, not analog lines, so its PSTN not POTS.

To me, this gets back to all the discussion on your blog about business models. VoIP is a new innovative service and the folks doing are experimenting with new business models. If you require VoIP providers to play by the same rules as monopoly Telcos then they have less ability to innovate with business models because their costs go up substantially. If I were running FreeConferenceCall and there was a VoIP service (or more than one VoIP service) that provided calls into my service for free (where I as FreeConferenceCall get paid for the calls) I would have as many free accounts as possible and I would keep calls to my service connected 24/7 – those free VoIP services are a money printing machine for FreeConferenceCall.

The simple fact is that services like FreeConferenceCall are fee based, fee based to the Telco not the end user. Based on a 2007 FCC decision, Telcos have to accept calls placed from VoIP providers. In light of that the Telcos changed their contracts with VoIP providers to pass on the costs of the fee based calls like those to FreeConferenceCall. There is no requirement for VoIP providers to connect calls from end users to all numbers, VoIP providers do not have to assume the costs of those fee based calls.

Your position that VoIP providers should connect all calls does not make sense. The main difference between VoIP providers and traditional telcos is a monopoly. VoIP providers do not get monopoly access and thus do not play by the same rules as traditional telcos. The FCC has been really consistent about not placing undue regulation on VoIP services in order to allow VoIP service providers to experiment with new services and business models – and its working.

Time to stop complaining that you cannot have the calls you want for free. In fact, you are you so fixed on using hidden fee based services like FreeConferenceCall? Given your position it seems like the right thing to do is to NOT use FreeConferenceCall, time to stop supporting them. Time to start supporting another free conference service that does not have hidden fees.

Mike Masnick (profile) says:

Re: Re:

By the way, I think you are confusing POTS with PSTN. POTS = Plain Old Telephone Service, this is the analog type of service that you might get at home from a Bell operating company.
PSTN = Public Switched Telephone Network, this includes both analog and digital service, your home phone and T1 type service a business might use. While I have no proof, I’m quite sure that FreeConferenceCall uses T1 lines, not analog lines, so its PSTN not POTS.

Ah yes. That’s correct. Used the wrong term..

The simple fact is that services like FreeConferenceCall are fee based, fee based to the Telco not the end user. Based on a 2007 FCC decision, Telcos have to accept calls placed from VoIP providers. In light of that the Telcos changed their contracts with VoIP providers to pass on the costs of the fee based calls like those to FreeConferenceCall. There is no requirement for VoIP providers to connect calls from end users to all numbers, VoIP providers do not have to assume the costs of those fee based calls.

Again, I think you’re misreading the FCC ruling, but I assume we’ll find out soon enough.

Time to stop complaining that you cannot have the calls you want for free.

Did you not read what I wrote? In this very post I said that they should remove the loophole that allows those services to exist — and then they will go away.

This has nothing to do with me wanting calls for free. I think the better solution is for the regulatory loophole that allows those companies to exist to go away.

In fact, you are you so fixed on using hidden fee based services like FreeConferenceCall? Given your position it seems like the right thing to do is to NOT use FreeConferenceCall, time to stop supporting them.

Why? It’s still free to me to use. There’s no reason not to use it until the loophole is closed.

Time to start supporting another free conference service that does not have hidden fees.

But… um… do those exist? This is part of the problem. None of these things are transparent, so it’s impossible to know which ones are using the loophole and which aren’t. Besides, most of the time, the reason I’m using free conference calling services is because *others* use those and set up conferences that I need to call into. You do realize that people beyond just those who set up the call have to be able to call in too, right?

diabolic (profile) says:

Re: Re: Re:

Again, Which 2007 FCC ‘order’ are you referring to specifically that you believe requires VoIP providers to connect calls to all ‘non-fee-based’ PSTN numbers? Please provide a link. Let’s open this discussion to the reading of the specific ruling you are referring to, if I’m wrong you can point out to me exactly where I am getting it wrong.

“Besides, most of the time, the reason I’m using free conference calling services is because *others* use those and set up conferences that I need to call into. You do realize that people beyond just those who set up the call have to be able to call in too, right?”

Yes, I do realize that other folks setup conferences that you need to join. Perhaps you could encourage those folks to use another service. You have heard of a grass-roots effort, right?

You mentioned yourself in a previous post that MagicJack setup its own conference service, why not use that one?

Ryan says:

Re: I usually agree, but..

The problem is for telcos like AT&T, not the consumers using the free conference services. If we stop using them, then the telcos have to pay less and subsequently have less incentive to get the law changed. So actually, if Mike wants to get the problem fixed he should utilize it more.

For some reason, this logic is very prevalent in the comments–that you cannot recognize a bad system and disagree or want it fixed if you still utilize the system advantageously. Lawyers can recognize that the patent system is screwed up but still take personal advantage. Firms can get bailout funds and still recognize that they’re terrible for the country. There’s nothing wrong with this–smart people make the best of any situation.

diabolic (profile) says:

Re: Re: I usually agree, but..

“The problem is for telcos like AT&T, not the consumers using the free conference services. If we stop using them, then the telcos have to pay less and subsequently have less incentive to get the law changed. So actually, if Mike wants to get the problem fixed he should utilize it more.”

Point taken. At the same time if lots of folks just stop using the service then FreeConferenceCall’s income goes down and they have a lot less reason to be in business.

TheStupidOne says:

VOIP vs Google Voice

I believe this has been stated before, but a VOIP provider can be used as a primary phone service and as such should be required to obey the common carrier rules which force them to connect to any number. Google voice on the other hand operates on top of other common carriers and cannot operate alone. Because of that Google Voice should not be required to act like a common carrier because nothing is stopping the user from calling the requested number directly. (I’m not saying that Google handled it correctly, but I believe they don’t have to connect the calls)

However I completely agree with everyone that is saying that we just need to close the loophole.

Anonymous Coward says:

Google voice on the other hand operates on top of other common carriers and cannot operate alone.

Except, that’s not quite true. Google only needs to connect to other networks when the callers are on other networks, like any other call provider.

Because of that Google Voice should not be required to act like a common carrier because nothing is stopping the user from calling the requested number directly.

Oh? And if you don’t have a land or mobile line, how are you supposed to do that? And even if you do, wouldn’t that just be pushing the fees off onto another carrier instead? How is that right? What makes Google so special? Why should land or mobile operators have to connect to those numbers either?

TheGhost says:

Re: No phone - no google voice

The thing is, if you didn’t have a mobile or land line, you couldn’t call Google Voice in the first place. It just allows you to have a “common number” where people can call you and it forwards the call to a number or number configured by you. I believe it also provides you with the ability to call out, and have your Google # displayed, but you still have to call into Google Voice to begin with, so again, no main phone, no Google Voice.

Anonymous Coward says:

Re: Re: No phone - no google voice

The thing is, if you didn’t have a mobile or land line, you couldn’t call Google Voice in the first place. It just allows you to have a “common number” where people can call you and it forwards the call to a number or number configured by you.

I use Google Voice and I don’t have a mobile or land line. It forwards to my Gizmo/SipPhone VOIP line.

I believe it also provides you with the ability to call out, and have your Google # displayed, but you still have to call into Google Voice to begin with, so again, no main phone, no Google Voice.

I do that from my VOIP line. Again, no mobile or land line.

Anonymous Coward says:

Come on Mike, let’s have a bit of insight here. This is clearly a story about traffic pumping, so the term “traffic pumping” should always be used prominently in your write-ups on any such story.

Likewise, it is clearly a case of the rural telcos being engaged in double dipping. The Universal Service Fund is supposed to be equalising the costs between rural telcos and city telcos. The rural telcos should be bitchslapped hard by the FCC and told to stick with USF only. The Universal Service Fund should also be mentioned prominently in any story about rural telcos.

The Most Known Unknown (profile) says:

Surprise

Here’s another very factual tidbit for you all.

The RLEC’s that host the free services are not paid by the IXC’s for the majority of their access minutes. The payment is held in dispute often with legal case in process.

Some RLEC’s have made commercial agreements with the big IXC’s at a small fractional rate (say $.015 per minute) of their actual tariff’d rate (say $.07 per minute).

At the same time these IXC’s are jacking up rates to these RLEC’s (like $.25 per minute).

Such is reality of the US telecom business where the adults play and far outside the foo-foo land of free internet mindset that violates it’s own cries of network neutrality.

So do you see how you are being PWNED now??

Stuart Friedman (profile) says:

Speak Easy's List is Larger than Some

The list of exchanges that Speak Easy is blocking a number of rural exchanges. I was unaware that Upper Michigan, for example (906) area code had a number of the traffic pumping operations like rural Iowa. Conversely, as a lower Michigander I frequently do call the U.P. If these exchange have legitimate users, I’d be real annoyed that I could call the numbers.

Chris Maresca (profile) says:

I dropped Speakeasy two weeks ago

Their service, which I had been using for 7 years, is seriously overpriced. I moved to Sonic, which has 2x the speed for 1/4 of the cost…

Speakeasy’s VOIP offering is really good, but it better be at more than $35/month. I calculated that if I used a pay-as-you-go service from CallCentric, it would be much cheaper, even while taking into account overseas calls.

It just seems that, given their price points, Speakeasy is just shooting itself in the foot. If competitors can operate at 1/4 of the price AND don’t block access, well, you know what’s going to happen.

The Most Known Unknown (profile) says:

$40 a month! Holy Crap!!!

I had no idea these morons charged that much. I can tell you that Vonage spends on average around $3 a month per line for their LD services.

It clearly looks like Speakeasy is the greedy pig in this scenario, far outpacing the biggest phone companies.

If these clowns cannot manage a clear profit without blocking calls that others in their sector that charge less overall for, then they simply should not be in business.

Robert A. Rosenberg (profile) says:

Who is being Blocked?

When Speakeasy is blocking the calls are they blocking specific numbers assigned to the Free Conferencing Services or are they blocking calls to the AreaCode+Exchange that is servicing the Service. In the first case, I do not see anything wrong since this is no different than blocking collect calls (or a 900 number since the calling phone company gets charged for the call and then passes the fee to the customer – ie: Bills Them). If it is a latter case (blocking the exchange) then unless the exchange is dedicated to the Free Services the normal customers of that exchange are being used as Human Shields to protect the Free Services. I should be allowed to contact any phone number I call and be connected. As I note, I am willing to exclude those that charge a fee to the Phone Company (as in the case of the Free Conferencing loophole) so long my other calls to that exchange are allowed to go through.

Anonymous Coward says:

Re: Who is being Blocked?

When Speakeasy is blocking the calls are they blocking specific numbers assigned to the Free Conferencing Services or are they blocking calls to the AreaCode+Exchange that is servicing the Service.

To hear the way Google and SpeakEasy are spinning it you might think that the rural telcos are somehow charging some kind of extra fee for those “Free Conferencing” calls. Well, they aren’t. Nor does the FCC allow that. They are charging the same fee they charge for connecting to any of their subscribers, whether it’s Ma and Pa or Free Conferencing.

But Google and SpeakEasy don’t like paying the rural connect fees, period. What this is probably leading to is Google, SpeakEasy, and others, starting to blocks all calls to rural areas (because those rural calls all cost more) unless the FCC puts a stop to it.

If it is a latter case (blocking the exchange) then unless the exchange is dedicated to the Free Services the normal customers of that exchange are being used as Human Shields to protect the Free Services.

Like I said, the termination fees for the “Free Services” and “normal customers”, as you call them, are exactly the same.

I should be allowed to contact any phone number I call and be connected.

Google and SpeakEasy disagree. AT&T would also like to block calls to rural numbers but the FCC won’t let them.

As I note, I am willing to exclude those that charge a fee to the Phone Company (as in the case of the Free Conferencing loophole) so long my other calls to that exchange are allowed to go through.

All calls that start on one telco and end on another result in call termination fees. Even calls to non-rural areas. If you block those calls then basically you’ll be blocking all calls between telcos. The large telcos (e.g. AT&T) could then use that to strangle the small telcos out of existence. (They wouldn’t do such a thing, would they?)

There could even develop wars between the larger players, e.g. AT&T & Sprint, where they either start blocking calls to each other (because those calls all result in call termination fees) or, more likely, charge extra for them. Already the FCC allows them to charge extra for mobile calls between telcos and that’s what they’re doing with the mobile plans that allow unlimited calls between their own customers but then charge extra for calls to other carriers.

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