[IP] Re: A Service Message From FreeConference.com

[David Farber <dave@farber.net>]

Begin forwarded message:

From: John Levine <johnl@iecc.com>
Date: March 17, 2007 10:33:47 AM EDT
To: dave@farber.net
Cc: jordan pollack <pollack@brandeis.edu>
Subject: Re: [IP] Re: A Service Message From FreeConference.com

> Isn't there a piece of the story missing?   I'm guessing that
> FreeConference makes its money on receiving some kind of origin/
> destination settlements from the carriers, which might be REAL money
> from the wireless guys and the phonebooth guys.  Anybody have any
> idea how free conferencing works as a business model, (since there is
> no google text ads read aloud while you wait for the calls:)

Of course, the little telcos split the terminating fee with
FreeConference.  There are lots of other companies doing plain call
arbitrage -- you call their access number, then you can dial out to
any of a large number of countries where their wholesale cost is less
than the split.  This is a godsend for cell phone users who would
otherwise pay a over dollar a minute to call countries in Europe where
the wholesale cost is under a penny.

Beyond the doubletalk from the large telcos, this reminds us how
broken the USF system is.  Its goal, to provide affordable phone
service for people in rural areas, is reasonable, but the way it's
implemented, by arcane surcharges placed on some phone calls, is nuts.
It's left over from 80 years ago when long distance was used only by
businesses and the rich.

It would make a lot more sense simply to pay telcos to serve high cost
customers with a monthly lump sum based on how remote they are.  But
since the same big telcos, particularly Qwest, are all on the current
USF gravy train, good luck getting that to happen.

Regards,
John Levine, johnl@iecc.com, Primary Perpetrator of "The Internet for  
Dummies",
Information Superhighwayman wanna-be, http://www.johnlevine.com, Mayor
"More Wiener schnitzel, please", said Tom, revealingly.



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