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FCC Tariff Changes Mean No More Free Conference Calls
kgeiger writes "The FCC is changing the call termination tariffs that subsidized rural wireline service and coincidentally free conference calls. Free conference call services had located their dial-in centers in rural areas to scoop up FCC tariffs from its Universal Service Fund. USF monies will go to broadband deployment instead. Be prepared to put more nickels in the box." On the other hand, maybe ad-driven Internet services (whether free or "freemium") will step in to the free-conference gap with some good-enough options, as they have for many other services, like email and faxing.
You mean, the funds will go to the same bullshit fund that subsidized telcos to the tune of BILLIONS of dollars to expand high-speed infrastructure and reach, which they then pocketed and did nothing with? Fuck you.
I work for FreeConference
The USF is not an "access fee", it's a tax. Companies like FreeConference do benefit from access fees, which is the settlement mechanism present in virtually all calls you make and receive. Carriers charge each other access fees to transport a call through the network. When AT&T hands off a call to a local exchange carrier (LEC), the LEC gets a small piece of the bill they collect from their customer. This is how it has worked at least since the telecom reforms of 1996. Just about any call you make on the public switched telephone network generates access fees for all the entities that handle your call. However, if all those entities are AT&T, AT&T doesn't complain about it. When they have to hand off the call to an independent, entrepreneurial LEC, they scream bloody murder.
USF is entirely different. This is a tax, not a tarif, and although some rural LECs benefit from that, that money does NOT flow to conference service providers.
The way termination fees used to work was that you paid your long distance carrier 10 cents a minute for a long distance phone call. The LD carrier shared that ten cents with the local phone companies on both sides of the call. The shared amount vary but a penny to each side was a common amount. The FCC granted a abnormally high fee to rural telephone companies of about five cents a minute. A call from a big city to the country was split 1 cent to the big city telco, 4 cents to the long distance carrier, and 5 cents to the rural telco. The long distance companies didn't make as much money on a call to or from a rural phone company but the amount of traffic was small.
There was also a termination fee for local calls, but it was much less than a penny. Various companies began to "exploit" the termination fees. The guys with lots of modems were some of the first (e.g. whoever AOL outsourced their modems to). The free conference guys figured out you could make good money as well. Remember that conference call companies charged 25 cents a minute, so it was cheaper to pay 10 cents a minute for a long distance call to a free conference service. If they were efficient, they could even make money at 1 cent per minute, but 5 cents was much better so they located in rural areas.
The large telcos started to change their models for long distance from per-minute to a block of minutes (e.g. 500 minutes for $$ per month). The local telcos mostly took over the long distance business so now the telcos were cutting checks to the free conference guys and not getting anything back. Telcos hate that. So they stopped paying or arbitrarily started paying 50 cents on the dollar. They also lobbied to change the rules. And here we are with the FCC tariff change.
(Universal Service Fees are different. They are one of many taxes on your phone bill. The taxes are used to subsidize the phone bills for the "poor".)
I do not run a free conference service (or free anything), but the death star and friends owe me about $50k and I'm very very small.