Carriers gang up on FreeConference
By Chris Ziegler 
posted Mar 18th 2007 6:39PM
posted Mar 18th 2007 6:39PM
Mobile carriers blocking numbers -- or entire ranges of numbers, for that matter -- isn't entirely unheard of; 900 and 976 numbers are frequently locked down, for example. Blocking legitimate services running on standard toll numbers is another matter entirely, though, and that seems to be what's happening here. FreeConference, which offers, well... free teleconferencing services by dialing into standard long distance numbers (as its name suggests) has had several of its lines locked out by AT&T, Sprint, and Qwest starting this month. At issue is the reason behind the sudden could shoulder, a reason disputed by FreeConference and the carriers. While FreeConference claims that the carriers are simply forcing users into using their own (more expensive) conferencing services, a more plausible (and slightly less blatantly illegal) explanation is that carriers are getting billed through the nose for termination fees stemming from FreeConference's non-toll-free numbers. Either way, it's uncool, and we're thinking it might be a good enough reason for frequent users to ultimately end up switching carriers.[Thanks to everyone who sent this in]
Normally, I enjoy reading the posts here, but this one has me floored.
A certain rural carrier in Iowa, who FreeConference uses, was using an FCC on termination costs to go from billing a company 2000 USD per month to 2000000 USD (yes, two million). And who did they bill? AT&T. What would YOU do if you were billed 1000 times more? Exactly, you'd stop the problem, any way within your portfolio. AT&T owns, well, AT&T Mobility and your contract clearly states that certain numbers can be blocked at any point in your contract. They are more than within their right, they're trying to keep costs down for themselves and their customers.
Don't blame AT&T or FreeConference for this one, blame the Telco and the FCC for being the intellectual marvels and quick acting group they are.
AT&T should definitely be blamed for doing this. Their customers are paying for the airtime (or long distance charges) on every call they make. AT&T does owe the applicable termination fee for all the calls made through their phones. If a lot of calls are terminating to "A certain rural carrier in Iowa", I would think they owe that carrier every bit of that $2million because customers are still paying AT&T for those calls. Termination charge is a small fraction of what AT&T charges for airtime/Call origination. The problem is not with FCC or the telco in Iowa - it is with AT&T and the way they structure their price their calling plans. They think they are smart when they give unlimited free calling plans and forget that they still owe termination charges on all the calls that originate from their phones.
It's called reciprocal compensation and it's a scam to get the big telcos to funnel money to these "free services". Thats how the free conferencing services make thier money.
Basically the telcom in question in Iowa gets like a half a penny per minute of traffic that terminates there from outside telcos. Half a penny is not alot of money unless you can generate a significant amount of traffic. So they make deals with these free service providers to share the revenues with them. They dont' even have any regular customers. Just companies from out of state who place thier hardware inside Iowa for the purpose of generating calls.
So Freeconference is one of many vendors who create a free service to draw in millions of minutes and then they get to share in the compensation from AT&T/QWEST/ETC.
it's called reciprocal compensation and they way the guys in iowa use it, it is a scam. And freeconferencing is getting a portion of that collected money.