A carrier dispute redolent of net neutrality threatens trouble for the many small nonprofits who routinely rely on FreeConference for free telephone conference calls.
This month, some telco tentacles and wireless carriers began blocking calls to the service, which is widely used by small nonprofits and activist groups.
Why the blocking? FreeConference blames underhanded competition on behalf of the telcos' own conferencing services, but TechDirt explains what's likely the real issue:
[T]he [freeconference.com] 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.
So, it's consumer hostage-taking (with a whiff of prudery -- can terrorism be far behind?) versus a backwards regulatory structure.
AT&T, Qwest, Sprint and Cingular are all apparently blocking at least some of these calls.
Whatever the demerits of freeconference's business model and the points of dissimilarity with the Internet net neutrality dispute, peremptorily obstructing phone calls to particular numbers is the sort of low trick that rears new audiences skeptical of telcos.
More immediately important for nonprofits -- freeconference is for the time being not a viable alternative for a conference call involving any sizable number of people, some of whom are sure to use one of these carriers. This is bad news for activists, for whom the "free" service, often accessed by people using cell phones or fixed-rate calling plans that incur no marginal charge for phone minutes, is a godsend vis-a-vis pricey professional conferencing services. Plenty of other free services are available to a simple Google search, though it's anyone's guess whether any with a similar business model have been or are about to be similarly targeted. (Anyone who's been using a different service want to comment?)
DemocracyInction has used FreeConference for our webinars, and we ran into this for the first time on our training last week, when a couple of participants were mysteriously unable to dial in.
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The blocking actions are targeting all free conferencing but...
...there are simple workarounds to them. If you visit www.freeconference.com, you can find alternate numbers that are not blocked. If you use our web scheduled service, we are sending them to you automatically. Frankly, you serve ATT/Cingular, Qwest, and Sprint when you take your business elsewhere.
It is a misconception that they are somehow losing money here. The targets of their lawsuit (other than one outlier) were described in the lawsuit filed by AT&T as charging 4 to 7 cents per minute. That suggests those not targeted must be charging relatively less. Since revenues per minute for the long distance services we generate average 7 to 8 cents per minute (and often are much higher for cell carriers as we all do everything possible to not actually use up the minutes we have purchased), there is plenty of room for profit here for AT&T.
Our model is not the same as the international call companies. We terminate all calls to our business in the local area. We pay taxes on our business in that state. What rate the telco is paid is set by the FCC. We get paid a fraction of that amount as a commission for generating business, but as an alternative to simple subsidies for these telcos.
We will continue providing these services. This illegal action will not stop service. At what rate is the question, and that is a question that is the province of the FCC as it balances the interests of the parties to provide opportunities for return on investment to everyone.