Exploiting Telco Regulations For Free Calls And For Profit (Lots And Lots Of Profit)
from the so-easy,-it's-almost-criminal... dept
Earlier this year, we wrote about how suddenly a bunch of "free" calling services were popping up that all seemed to use phone numbers in Iowa. This included a service that would let you call an Iowa number and from there call anywhere in the world for free as well as a variety of "free conference calling" services. All of these systems were actually exploiting some legacy telco regulations, that were officially designed to help rural telcos get extra money to build out more rural service. Basically, the government allowed rural telcos to charge high termination fees to other telcos when calls from their lines terminated on one of the rural telco's lines. So, if you had AT&T and called your cousin in Iowa who had some small rural telco, AT&T would actually have to pay that telco some charge per minute, with the idea being that the telcos would use that money to invest in infrastructure. Of course, the infrastructure they invested in wasn't exactly building more lines to wire up others in the town, but in VoIP systems so they could reroute calls in to anywhere else, and then team up with various online sites to get as many calls as possible routed through those systems. Then they could just sit back and collect the millions of dollars rolling in from telcos. Broadband Reports points us to an article at the Wall Street Journal going into more details about how this happened -- and how the FCC is now scrambling a bit to see if there's a way they can stop it. In the meantime, the WSJ piece notes that while the telcos have been told by the FCC that they have to keep connecting these calls, they've simply stopped paying any of the termination fees as they await the results of the various lawsuits. Of course, all that's done for now is made the various free conference call services switch to other rural telcos in other states. Eventually, though, they'll run out of other states to go to (or the regulators will finally realize how their regulations are being exploited) and the little regulatory exploit will go away.
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Filed Under: arbitrage, free conference calls, iowa, telcos, termination fees
Companies: at&t, fcc, freeconference.com, qwest, sprint, verizon
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Gee really...
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First
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Dam - missed it
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Re: Dam - missed it
You can make free calls to India for 100 minutes
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Re: playing games?
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I'd love to see an equal footing for telecom, telecom startups, and alternatives, but somehow I think my interests and ATT diverge just... perhaps a little.
Protecting rights is important, but protecting already well protected semi-nationalised firms, not so much. I know we can't practically rollback what has happened, but taking an adversarial role to what they've become is reasonable.
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Re: @fishbane
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Re: Phone Biz.
Thanks for your time,
Ryan J.
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Re: Re: Phone Biz.
Thanks again,
Keep fighting the GOOD Fight!
Ryan J.
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is this what the world coming to ???
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Whole
I laughed at ATT when I started using a free voip service that let me punch in my phone number then the number I want to speak with. The internet calls my land line then calls the person I want to speak with. I recieve an incoming call and sine incoming calls are free I subscribe to the ATT $4.25 plan and get $60 worth of service for it.
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Not defending big companies
I think it's less about the big companies and more about the fly-by-night companies setting up for the specific purpose of exploiting the system. Anyone who got shut down by a certain VOIP provider this year without prior notice and the inability to now port out their existing number of 15 years knows what I'm saying here.
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Re: Not defending big companies
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Re: Re: Not defending big companies
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Re: Re: Not defending big companies
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Re: Not defending big companies
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AT&T stoped paying term fees a while ago.
Bottom line.....screw AT&T and if they are getting ripped off by this loophole...well, karma's unfogiving.
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BELLS are the Illegal ones
Can't people see the writing on the wall? AT&T wants to be a monopoly again. Think your rates are high now, wait until that happens. AT&T did chat forever when the rules went there way. Now they scream foul when they done. Look at this power point.
http://www.itl.nist.gov/iaui/vvrg/hfweb/hfweb99ppt/fairbrother/fairbrother.ppt
AT&T hosts their conference call gear at a clec called teleport. Why? the same rules that allow others to get this money. Don't ever think you can belive one thing that comes out of a bells mouth. just as well be www.att.gov.
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Read the Order
In addition the FCC order stated that Farmer's tariff's were valid and that Farmers could collect the withheld access fees from the carriers in "federal court." The WSJ reporter clearly did not read the FCC's order.
The FCC Notice of Proposed Rulemaking which merely opened the docket and asks for comments, states: "We believe that traffic may be stimulated through a variety of means, including conference bridges, chat line facilities, call center operations, and help desk provisioning. We invite
interested persons to comment on the prevalence of these types of operations and to describe in detail how
each type of service is provisioned. We understand that carriers complaining about the access stimulation
arrangements also offer conferencing and other services that may result in increased traffic. We ask such
carriers to explain how they provide each of the above mentioned services, including what charges they
assess on the provider, whether access charges are assessed on such calls, and what compensation, if any,
is paid to such provider."
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Think before you Legislate!
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techdirt:for free calls
Free Calls easily.
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