bobnsri
join:2004-06-09
North Smithfield, RI
1 edit | The "Truth" About ATT v Iowa Phone Companies For many years the IOWA phone companies named in the ATT (et al) suit were paid 5-cents per minute by LD Carriers to terminate calls on the local Iowa Telephone networks.
While most local carriers in the USA get less than a penny a minute to terminate a call, IOWA, due to the rural nature of the state, was tariffed at/around 5-cents per minute.
In reality, since IOWA companies COMPLETE more calls than ORIGINATE, they earned a few thousand dollar a month (profit) on termination fees.
This was legal and everyone, including ATT played by these rules.
For most consumers, the rate they were charged to call IOWA was much, much less than the termination fee ATT and others were charged.
(eg) Boston to Iowa 3-Cents Per Minute to Customer, yet ATT and others have to pay 5-cents per minute to the local companies to COMPLETE the call.
Consumers with UNLIMITED FREE long distance (ie) cell phones were KILLING ATT, Cingular, Verizon, etc.
Last summer, the carriers named in the suit, (Dixon, Superior Telephone, et al) unilaterally (and without tariff approval) raised the rate they charge to 14-cents per minute.
They got very, very greedy.
Soon ATT, which regularly paid thousands of dollars a month in termination fees, was dishing out $2-Million in fees.
IF, the local carriers had stuck to their tariffed price, ATT would NOT have a leg to stand on.
The local telcos SHARED their termination fees with FreeConference.
There were two ways FreeConference and the local telcos made money.
-If the call terminated on Freedom equipment in Iowa, the telco and Freedom split the 14-cents per minute termination fee.
-If someone called FreeConference to place an INTERNATIONAL call, Freedom would transmit the call via VOIP at less than a penny a minute.
So, if FreeConference was getting paid 7-cents a minute and the cost of VOIP outbound call was a penny a minute, FreeConference was making 6-cents a minute profit.
The local telco was also making 7-cents per minute.
The plan fell apart when the owner of FreeConference went on the ABC Evening News and said his company would "beat AT&T at their own game"
He gave dozens of interviews with tv stations and newspapers.
ATT got mad and sued.
Everyone is now suing everyone else.
The IOWA companies expect to settle with ATT et al without going to trial.
The presumption is:
-IOWA companies will NOT admit guilt.
-They will NOT be paid the termination fees that ATT still owes them for calls made to FreeConference.
-They will AGREE to resume their tariffed rate of 5-cents per minute to terminate calls.
Of course it goes without saying, ATT and all the others, DO NOT WANT TO PAY ANYONE, ANYTHING, to terminate their calls.
They want a free ride on the local networks.
Both sides here have some dirt on their hands.
Of course, ANY local phone company in America, legally CAN lease out, their lines to chat services and earn tons of money on termination fees.
THIS IS TOTALLY LEGAL since the calls TERMINATE at the local level.
They can also SHARE the termination fees, with the chat service, PROVIDED the chat service does not INITIATE an outbound call to CIRCUMVENT the tariff.
In some states, California (eg) the chatlines must be placed on a block of numbers that the local telco can BLOCK if a customer requests.
North Nevada Telco has been earning millions a year running chat lines that TERMINATE at their facilities.
They also do NOT charge MORE than the tariff rate to terminate calls.
The long distance companies are powerless to stop them. |
