Can A Telco Block Phone Calls To A Number They Don't Like?

from the they're-trying dept

If you're involved with startups these days, you've probably used FreeConference.com. It's become the de facto conference call system for many startups. Basically, it lets you create conference calls for just the cost of the long distance call to the number provided (usually in Iowa or Minnesota). Since many phone plans these days include unlimited long distance, there isn't even much of a cost for most users. I used to think that the business model behind FreeConference.com was to upsell people to more feature-complete conference calls (as well as ones that didn't provide a little jingle for FreeConference.com at the beginning -- for people who didn't want big name customers or partners knowing they were using a free service). However, many have suggested that the real business model was the same as those services that offered free international calls: arbitrage over termination fees. Since regulators put in place ridiculously high termination fees (the fees other telcos pay local telcos for connecting a call to that telco's end user) there was an arbitrage opportunity. These services could set up deals with the local telcos, drive many more calls to those local exchanges. The local telcos then get a ton of cash from the termination fees, and gives some of it back to the service that drove all that traffic. In the case of the free international calls, AT&T decided to sue the company for fraud.

However, it looks like the various telcos have taken a different strategy when it comes to FreeConference.com: they're simply blocking callers from calling that number. Think about that for a second, because it's quite troubling. The telco is deciding that they don't want you to be able to call certain numbers -- and then just blocking them, leaving no recourse. Apparently some people can still get through, but others are having trouble. It certainly has some similarities to the whole network neutrality debate. The FCC tends not to take kindly to telcos blocking anyone's ability to call anyone else -- though, in the past, it's usually smaller telcos doing the blocking, rather than the Kevin Martin's buddies at the big telcos. Either way, it seems pretty sleazy to suddenly block the ability to call certain numbers. The problem isn't with these services, but the bad regulations that allowed the small telcos to charge crazy termination fees in the first place. If the big telcos have a problem with it, they should take it up with whoever put those laws in place.

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  1. identicon
    Kentucky Fats, 16 Mar 2007 @ 1:58pm

    Raise a glass to market freedom

    Let me guess,your're a republican?

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