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1 edit | reply to iansltx
Re: MagicTalk isn't "this week" said by iansltx:Traditional telcos are not at a competitive disadvantage. They just can't rely on pumped-up terminations anymore to do what they're doing. I don't understand your point. AT&T (for example) is definitely at a competitive disadvantage when it's forced to connect calls to rural areas, and competitors like magicJack don't.
said by iansltx:As for the cellular carriers paying for minutes to receive the calls, there are a couple of "unlimited" providers starting at $20 per month (within $10 of basic co-op landlines) that still have reasonable interconnection charges. Can you please name them, and their areas of coverage? (Are they available in rural areas?).
And, when you say "reasonable" interconnection charges... reasonable to whom?
We just went through an episode where MagicJack blocked traffic-pumping conference call numbers because the interconnection charges were too high to offer MagicJack at the price being offered. But, normal rural calls were "reasonable."
Nine months after MagicJack got away with that (something AT&T can't), all of a sudden the normal rural calls are no longer "reasonable."
What convinces you that this "free market" race to the bottom won't result in those cellular numbers being blocked?
That's the problem I have with this. Any single example may look "reasonable." But, it's a moving target. We're really giving companies like MagicJack the power to decide who will receive phone service (by extension of who the company allows their patrons to call).
Presumably leaving it to other providers who will place the higher-cost calls for a price. Conveniently assuming there will be a company, and the price won't be prohibitively expensive.
There's a lot of assumptions here about how this won't spread further, and how it's not going to be a problem because someone else will place the call. I believe that it's reasonable to assume that the profit-motive driving MagicJack won't stop where it is (just like it didn't stop nine months ago). Nor will it be limited to MagicJack.
said by iansltx:Additionally, none of the telcos around here are being blocked by MJ. Not the rural co-ops, not anybody. Are you saying, if it's not affecting you it must not be happening?
There are MJ customers in the MJ forum reporting the inability to call any number in some rural areas. And, that they've been offered a refund from MJ. (I.e., it's a new policy. Not a misunderstanding.).
said by iansltx:I think MagicJack should be allowed to keep on doing what it's doing; their service requires internet access so I'd say the rural telcos should encourage it ('net access is more expensive than telephone service). I didn't quite understand that sentence.
The problem with requiring some telcos to connect calls to rural areas, while allowing others not to is that it creates a competitive disadvantage.
The problem with letting it evolve this way (first they block conference-call numbers because those are too expensive; then all numbers because they realize they can save even more money) is that it's not subject to the process of public-policy reform.
There were goals behind the original rules (which some telcos, like AT&T are forced to abide by). Now you have groups like MagicJack claiming it's just a software application, not a real telco. But, that's disingenuous when YMAX is the sister company handling all of MagicJack's calls, and it allegedly has official CLEC status in all 50 states.
These things ought to be clarified as a part of deliberate public policy. Not who can most creatively dissemble about "what's a telco."
Finally, are you saying rural customers have the choice to use VoIP? I read a lot of comments from people saying they only have satellite. Satellite latency is not capable of VoIP.
said by iansltx:That said, any company blocking access to certain prefixes in the lower 48 should be mandated to provide a list of what those prefixes are within full view of everyone. If they're blocking individual numbers, same thing. I agree with that. However, I would take it a step further and say the company should be required to place the call and pass the termination fee onto the caller. (Like long distance.).
I'd rather see the individual callers have the choice whether to complete the call.
said by iansltx:Handling things this way would avoid undue regulation on an industry that's extremely competitive But, you didn't address how the regulation negatively affected competitiveness. MagicJack was making a pile of profit before blocking rural numbers. | |
iansltx
join:2007-02-19
Golden, CO
kudos:2 Reviews:
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2 edits | said by amigo_boy:I don't understand your point. AT&T (for example) is definitely at a competitive disadvantage when it's forced to connect calls to rural areas, and competitors like magicJack don't. AT&T also is an ILEC; they get anyone who wants to sign up for landline service in an area, by default. Blessing and a curse, sure, but on top of that the regulated lines that tariffed rates paid for are now used for DSL...and that DSL (or a competitor's service) is what MagicJack runs on.
Also, I wouldn't call AT&T "unfortunate." Their rates are more than enough to compensate for any LD ops that they have to do to rural areas, and in some cases they're actually driving up those rates by providing the rural telcos with incredibly expensive transport circuits for voice.
said by amigo_boy:Can you please name them, and their areas of coverage? (Are they available in rural areas?). For $45 unlimited, AT&T, Verizon and T-Mobile do this through Straight Talk. Sprint is $50.
For $20 unlimited, inbound and outbound, our local carrier is West Central Wireless, and they cover an area roughly the size of West Virginia. You can take a look at their service area at »westcentral.com. Service is top-notch as long as you don't need data (they're working on that). The $20 unlimited plan is marketed under Right Wireless (»rightwireless.net). I understand that cellular companies like this aren't everywhere, but this one DEFINITELY covers some rural territory.
said by amigo_boy:What convinces you that this "free market" race to the bottom won't result in those cellular numbers being blocked? Their termination rates are lower than rates for companies like Windstream, CenturyLink and Frontier Communications. MagicJack can afford to cut their maximum expense per minute a little more beofre they start running into standard rates for the rural mega-telcos, but once they hit that point they'll be walling off a large percentage of the telephone-using population, and the public backlash for doing so outweighs the money they'd save by turning them off.
Also, MagicJack is willing to do free interconnection for anyone who wants it. It might take $50 per megabit of bandwidth for a rural telco to get connectivity to where MagicJack can interconnect, but at 80 kbps, tops, per SIP stream that's not all that bad...
said by amigo_boy:That's the problem I have with this. Any single example may look "reasonable." But, it's a moving target. We're really giving companies like MagicJack the power to decide who will receive phone service (by extension of who the company allows their patrons to call). Presumably leaving it to other providers who will place the higher-cost calls for a price. Conveniently assuming there will be a company, and the price won't be prohibitively expensive. You're overstating the situation. MagicJack doesn't operate in a vacuum, and I can get LD to any rate center on the VoIP rate sheet I'm looking at. Some cost more than others. Your definition of "prohibitive" may be different than mine, but wouldn't you think that subsidizing expensive numbers with less expensive ones is also rather unfair?
Some of these places may take 5-10 cents per minute to connect to; that's what the rate is, SET BY THE TELCO. IF that telco lowered its rates for interconnection, MJ would let them back on. Or if the telco had some sort of SIP provider that, for X cents per minute, allowed local calling to their own subscribers, that would work too.
said by amigo_boy:There's a lot of assumptions here about how this won't spread further, and how it's not going to be a problem because someone else will place the call. I believe that it's reasonable to assume that the profit-motive driving MagicJack won't stop where it is (just like it didn't stop nine months ago). Nor will it be limited to MagicJack. Maybe it will continue. At which point MagicJack will back themselves into a corner and be forced to change their business model when people start leaving their service (they're doing this right now, in fact) when they can't reach the phone numbers they want to reach. People have sworn off MagicJack for this conference call deal; if they want to call Grandma in Bernie, MO they'll switch to a provider who can do that. Or they'll give Grandma a MagicJack, have her sign up for BPS Networks DSL, and everyone's happy.
said by amigo_boy:Are you saying, if it's not affecting you it must not be happening? There are MJ customers in the MJ forum reporting the inability to call any number in some rural areas. And, that they've been offered a refund from MJ. (I.e., it's a new policy. Not a misunderstanding.). I'm not denying that it isn't happening. BPS Telephone and Paul Bunyan Telephone are both blocked.
However to ask MagicJack to do anything more than refund a customer's $20-$60 is asking a bit much, wouldn't you think. They're saying, "Hey, our service doesn't work for you. We can't make it work for you. Here's all of the money you spent on our service to go and find a service that *does* work for you."
Don't like the above? User Vonage, voip.ms, iCall or one of the several dozen other providers out there that DO terminate these calls. Or use...gasp...AT&T...who is selling many of these rural telcos the circuits that are driving their costs so high.
said by amigo_boy:There were goals behind the original rules (which some telcos, like AT&T are forced to abide by). Now you have groups like MagicJack claiming it's just a software application, not a real telco. But, that's disingenuous when YMAX is the sister company handling all of MagicJack's calls, and it allegedly has official CLEC status in all 50 states. YMAX is indeed a CLEC in all 50 states. Look at their corporate website for their tariff. They'll interconnect with anyone who's willing to do a reciprocal exchange. It's not like they aren't trying here...
...and what would you define as a telco? Something that completes calls over the PSTN? Even if the company offering access to the PSTN does so for free (MagicTalk)?
said by amigo_boy:Finally, are you saying rural customers have the choice to use VoIP? I read a lot of comments from people saying they only have satellite. Satellite latency is not capable of VoIP. Low-bandwidth VoIP can actually run over a dialup connection. It's sketchy, but it works. Also, you can get a toll-free number that forwards calls to your landline. This adds extra cost to your side of the deal, but it moves hidden costs away from the people trying to call you.
said by amigo_boy:I agree with that. However, I would take it a step further and say the company should be required to place the call and pass the termination fee onto the caller. (Like long distance.) I'd rather see the individual callers have the choice whether to complete the call. And I don't think this regulation is necessary on VoIP based service, as long as the company tells you where to go for that service. Kind of like how many telephone companies don't offer direct-dial international long distance...despite the fact that I can call to China for cheaper rates than what it takes to connect to areas outside Cass Lake, MN.
said by amigo_boy:But, you didn't address how the regulation negatively affected competitiveness. MagicJack was making a pile of profit before blocking rural numbers. What's your line of work, so that I may craft an analogy in your terms that will make you understand that having companies like MagicJack helps move the telecom world forward, rather than the other way around?
The fact is that MagicJack isn't a good fit for everyone...not even close! However they provide a service that's valuable to a subset of people, just like how MetroPCS provides a valuable service to people who don't need to make a ton of calls outside their local area. MagicJack isn't forcing pricing downward for AT&T, Verizon or Comcast, so I wouldn't worry about it distorting competition. People don't come to AT&T or anyone else saying, "I'm not using your service because you aren't giving me as good a rate as MagicJack" and MJ will continue to serve a different audience than wireline, wireless and "indie" VoIP carriers will.
When we see Comcast shrinking on their phone subscriber count in favor of MagicJack (Comcast phone service tends to be about $40 per month, same as most MSOs' VoCable service) then we have something to worry about. Until then, the market can decide what to do with companies like MagicJack. | | |
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1 edit | said by iansltx:Also, I wouldn't call AT&T "unfortunate." Their rates are more than enough to compensate for any LD ops that they have to do to rural areas, and in some cases they're actually driving up those rates by providing the rural telcos with incredibly expensive transport circuits for voice. I wouldn't call MagicJack unfortunate either. Their financials show they were making a very healthy profit before blocking rural numbers.
said by iansltx:said by amigo_boy:Can you please name them, and their areas of coverage? (Are they available in rural areas?). For $45 unlimited, AT&T, Verizon and T-Mobile do this through Straight Talk. Sprint is $50. I thought you said it was only $20.
Also, when I look at T-Mobile, it's $50. Not $45. (I didn't look at the others.).
Be that as it may, this gets back to my point that cellular providers can have lower termination fees because the customer pays for incoming minutes.
said by iansltx:but this one DEFINITELY covers some rural territory. It's the "some" that's a problem.
said by iansltx:said by amigo_boy:What convinces you that this "free market" race to the bottom won't result in those cellular numbers being blocked? Their termination rates are lower than rates for companies like Windstream, CenturyLink and Frontier Communications. MagicJack can afford to cut their maximum expense per minute a little more beofre they start running into standard rates for the rural mega-telcos, but once they hit that point they'll be walling off a large percentage of the telephone-using population, and the public backlash for doing so outweighs the money they'd save by turning them off. The problem with your logic is, areas with a higher number of termination points results in more aggregate minutes going into that area. Small differences in termination fees can add up to significant amounts. (Economy of scale.).
Conversely, rural areas with fewer points of termination won't add up. Which diminishes the argument that rural areas are too expensive to connect to. (Also borne out by the fact that MJ was making a significant profit before blocking those areas.).
said by iansltx:Also, MagicJack is willing to do free interconnection for anyone who wants it. I think the problem is that MJ is forcing free when the law doesn't allow that for its competitors. And, MJ is dissembling about whether it's truly a telco (and thus whether the law applies).
AT&T might offer free interconnection to. But, it's not allowed to stop connecting calls just to motivate the rural telco.
said by iansltx:You're overstating the situation. MagicJack doesn't operate in a vacuum, and I can get LD to any rate center on the VoIP rate sheet I'm looking at. Some cost more than others. Your definition of "prohibitive" may be different than mine, but wouldn't you think that subsidizing expensive numbers with less expensive ones is also rather unfair? Nine months ago (when I said, if MJ can block conference call numbers, they'll block rural numbers too), I was told I was "overstating the situation."
I don't believe you know where this could end if phone companies can pull the plug on each other to get better deals. The fact that MJ just took another step (which was poo-pooed nine months ago) is significant.
said by iansltx:Some of these places may take 5-10 cents per minute to connect to; And they have few potential points of termination. Meaning total costs will be low compared to a metro area. (Also exhibited in the fact that MJ was making a profit before blocking rural areas.).
said by iansltx:Maybe it will continue. At which point MagicJack will back themselves into a corner and be forced to change their business model when people start leaving their service I think what will happen is MJ will attract the attention of the FCC. Or, attract the attention of AT&T who will complain to the FCC. Then, MJ will back down like Google did (only blocking 100 numbers instead of entire exchanges).
Or, MJ's actions will lead to other VoIP providers like NetTalk to do the same thing because they have to "compete."
Eventually, the FCC will intervene.
said by iansltx:Or they'll give Grandma a MagicJack, have her sign up for BPS Networks DSL, and everyone's happy. Assuming DSL is available in that rural area.
said by iansltx:However to ask MagicJack to do anything more than refund a customer's $20-$60 is asking a bit much, wouldn't you think. They're saying, "Hey, our service doesn't work for you. We can't make it work for you. The question is whether MJ has the legal power to do that, as a nationwide CLEC.
I don't urge anyone to ask MJ to change its policy. I urge them to file a complaint with the FCC here. You don't even have to be a magicJack customer to raise your concern to the FCC.
I completely agree that cheap VoIP services raise interesting questions.
On the one hand, the argument is that magicJack can't provide service for $1.70 per month if they have to pay rural termination fees. (Although, they were making significant profit doing exactly that.).
On the other hand, should public policy be thwarted just because something's cheap or free? Should quality or price in one part of the country invalidate society's regulatory goals to promote affordable telecommunications across the entire country? Can Dan just say "oh, I don't make much money. I wouldn't be able to make it so cheap if I had to pay rural fees. It's not my fault so many people want my $1.70-per-month phone service -- and now they can't call someone in a rural area?"
Maybe the answer is that we shouldn't have free (Google) or $1.70-per-month (MJ) phone services. If they can't do what they do while abiding by society's prerogatives, then they can't do what they do? Why should cheap phone service outweigh society's prerogatives? And even nullify legislation before it's been properly debated and repealed through proper channels?
said by iansltx:Don't like the above? User Vonage, voip.ms, iCall Until they do the same thing to remain "competitive" in the race to the bottom?
said by iansltx:YMAX is indeed a CLEC in all 50 states. Look at their corporate website for their tariff. They'll interconnect with anyone who's willing to do a reciprocal exchange. It's not like they aren't trying here... The question was why they're "trying" in a way which regulation doesn't support. And, they use the separation of YMAX and MagicJack to claim the regulation doesn't apply because, "it's just computer software, not a phone service?"
said by iansltx:...and what would you define as a telco? Something that completes calls over the PSTN? Even if the company offering access to the PSTN does so for free (MagicTalk)? I don't think we need to obfuscate this topic just to address MagicJack. When MJ's commercials advocate using it as a landline replacement, I think it's pretty clear to everyone that it's engaging in telco activities (unlike a pure "chat" application).
said by iansltx:Low-bandwidth VoIP can actually run over a dialup connection. Chuckle.
said by iansltx:And I don't think this regulation is necessary on VoIP based service, as long as the company tells you where to go for that service. You're assuming there will be somewhere to go. Also, I don't think I'd compare a town with 1,000 inhabitants to CHINA.
I see it more like placing a call to China, but the call not going through because the telco providing termination of the incoming international call blocked the small village I wanted to call.
And now what choice do I have?
said by iansltx:said by amigo_boy:But, you didn't address how the regulation negatively affected competitiveness. MagicJack was making a pile of profit before blocking rural numbers. What's our line of work, so that I may craft an analogy in your terms that will make you understand that having companies like MagicJack helps move the telecom world forward, rather than the other way around? What bearing does that have on the fact that MJ was making so much profit (before blocking rural exchanges) that investors wet their pants?
It sounds like you're trying to change the topic?
said by iansltx:The fact is that MagicJack isn't a good fit for everyone...not even close! AT&T's not a good fit for everyone either. Yet, the regulation still exists (prohibiting blocking rural calls). | |
iansltx
join:2007-02-19
Golden, CO
kudos:2 Reviews:
·Verizon Online DSL
·Comcast
| 1. I DID say that there exists a cellular carrier with reasonable interconnection charges in my area that offers unlimited for $20. I listed that carrier. They don't offer unlimited long distance, caller ID, etc. for that rate ($5 per month add-ons) but they're comprable to landlines around here on price and have SIGNIFICANTLY lower interconnect fees.
2. I can't make a cellular provider offer a $20 unlimited plan and, thanks to cellular license boundaries and deep-pocketed AT&T and Verizon, there are some areas that will not get $20 unlimited for awhile because there aren't small independent providers there to stir the pot.
3. MagicJack isn't "forcing" free. They aren't AT&T. They don't have market power for that. They can cut costs, but it will result in customers going elsewhere. That's capitalism, and it works.
4. AT&T DOESN'T offer free interconnection to rural telcos, actually. AT&T's PSTN interconnect charges are partially what makes rural telcos so expensive to terminate to in the first place.
5. If someone is making a call to a rural telco, chances are that they will make repeated calls to that same telco on their line (family, friends, businesses there, whatever), and that adds up to a net loss for that customer on MagicJack VERY quickly. At five cents per minute, 400 minutes per year wipes out not only MJ's profits from a given customer but also their revenues. Would you rather MJ hike their prices for those customers? Because as a profit-oriented company, that's what they'd do.
6. Rural telcos tend to have better DSL penetration than urban ones. Of course, you wouldn't know about this because you live in an area that can get cable HSI.
7. You're talking about "society's prerogatives" like being able to call from a MagicJack to a rural landline is a God-given right...and like MagicJack is the only VoIP (let alone telephone) company in the world.
8. Nobody is "racing to the bottom" here. While VoIP rates have dropped in some instances over the past few years, MagicJack only has one major competitor (NetTalk) trying to do the same thing...and NetTalk is priced higher than MagicJack!
9. MagicJack CAN serve as a landline replacement...assuming you have a cell phone around 
10. You still haven't defined "telco" for me. Just because someone says they're a Tier 1 ISP doesn't mean that they are. Truth in advertising may apply here, but not FCC regulation!
11. I'm serious, low-BW VoIP CAN run over a dialup connection. I've done it before. You can't use u-law because by definition a modem has less bandwidth than the voice carrier undergirding it, but more efficient codecs will work.
12. Other than Google (offering a free, non-landline-replacement service), MagicJack (offering a dirt-cheap service) and SpeakEasy (who blocked only conference call numbers), who is doing this? I'd like to know.
13. I'm not changing the subject. I'm just trying to craft an analogy to what MJ is doing that you would understand. In the food service industry, if a guy comes in and makes five trips to your $10 buffet, eating $12 worth of food in the process, and does this every day of the week for three months, you might leverage your law-given ability to keep him off your private property. That's not a great analogy, but I'm not going to try too hard because I don't know which industry you're in.
14. LEC regs were made at a time when, to be a ILEC or CLEC, you had to have equipment at the central office of the customer you wanted to serve. The times, they have a-changed. Wireless services added another bunch of competitors to the picture (seven competitors in my area, in fact) and VoIP adds another bunch of customers on top of that. MagicJack can be substituted for another VoIP provider in about five minutes (download SIP client, sign up for account, input account info into SIP client) with no build-out required. "Must connect" regulations applied to AT&T et al because at that time AT&T was the monopoly, so if you couldn't call someone on AT&T you couldn't call someone AT ALL. Now the potential for market abuse on voice service is lessened to near nil.
MagicJack, like any other company in a highly competitive environment (you can get VoIP from another provider in, as far as I know, EVERY market that MagicJack serves with local numbers of their own), should have the right to make as much money as they can, with the knowledge that customers will flock to a competitor if they charge too much for service or provide too little service for the money.
Key words: highly competitive environment. This wasn't the case when older LEC regulations were put into place and still isn't really the case for broadband access. Won't be either until you can get a high capacity (by then-present standards) circuit in any given location for $500 or less per month.
Who are you going to go after next? Wal-Mart? | |
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| said by iansltx:1. I DID say that there exists a cellular carrier with reasonable interconnection charges in my area that offers unlimited for $20. I listed that carrier. But, you're area isn't the only area that would be affected by blocking rural calls.
The alternatives that would be available to most affected would cost more than twice that amount.
said by iansltx:3. MagicJack isn't "forcing" free. They aren't AT&T. I guess that's the problem with not quoting what you're replying to.
You said MJ offers free interconnect. I replied that by offering "free" or blocking the entire exchange, they're forcing free.
said by iansltx:4. AT&T DOESN'T offer free interconnection to rural telcos, actually. AT&T's PSTN interconnect charges are partially what makes rural telcos so expensive to terminate to in the first place. Your comment is predicated upon your misunderstanding of point #3 above.
said by iansltx:5. If someone is making a call to a rural telco, chances are that they will make repeated calls to that same telco on their line (family, friends, businesses there, whatever), and that adds up to a net loss for that customer on MagicJack VERY quickly. At five cents per minute, 400 minutes per year wipes out not only MJ's profits from a given customer but also their revenues. As already pointed out, MJ makes more profit from higher-density, lower-cost areas.
said by iansltx:Would you rather MJ hike their prices for those customers? Because as a profit-oriented company, that's what they'd do. As mentioned a few times, MJ was making profits which the stock market viewed as impressive before blocking rural areas
Also, MJ has an "excessive usage" policy which validates the same principle that the more profitable customers subsidize the less profitable.
MJ doesn't bill by the minute. You pay a flat rate and can use up to some nebulously-defined amount of the service before being terminated for excessive use. By definition, this means some people who make only 1 call per day are subsidizing those who approach the "excessive usage" limit.
It seemed like treating the rural areas similarly was working just fine -- CONSIDERING MJ WAS MAKING A PROFIT WHICH IMPRESSED WALL STREET EVEN BEFORE BLOCKING RURAL AREAS.
Personally, I think that point is worthy of consideration. I have a funny feeling something about MJ's pre-public accounting was rigged, and now they are under extreme pressures to show the kind of post-public numbers going forward.
As we all know, this wouldn't be the first time Dan engaged in deceptive practices. Remember the random number generator used to deceive visitors to the web site (about how many people took the 30-day trial)? 
said by iansltx:6. Rural telcos tend to have better DSL penetration than urban ones. Of course, you wouldn't know about this because you live in an area that can get cable HSI. All I know is I see a considerable amount of people saying they use satellite. What happens to them in your world of pick-and-choose regulatory compliance (driven by short-term stock market priorities)?
said by iansltx:7. You're talking about "society's prerogatives" like being able to call from a MagicJack to a rural landline is a God-given right...and like MagicJack is the only VoIP (let alone telephone) company in the world. No. Just a legislated right. The question is whether magicJack should be able to evade the spirit of that legislation through the sleight of hand of YMAX being a different company. ("We're a chat software, not a phone company!" While pitching itself to investors as a phone company "We're a nationwide CLEC.").
said by iansltx:8. Nobody is "racing to the bottom" here. By definition, cutting off rural areas due to profit is a race to the bottom. It provides competitive motivation for the other companies to do the same thing.
You're view is that the ends will justify the means. And, someone will step in and serve the rural areas.
I'd rather see that discussed as part of the normal policy-making process so that, if things don't "trickle down" as nicely as you describe, that scenario can be planned for.
I think that would be better than MagicJack pretending not to be a telco and evading the spirit of the law.
said by iansltx:NetTalk is priced higher than MagicJack! NetTalk has more features, is an ATA service. Not a niche, service like MagicJack (requiring the computer to be on for service). I'm sure, as as an always-on, whole-house phone service, NetTalk has more per-customer usage.
NetTalk may not have had the luxury of a wealthy founder.
said by iansltx:9. MagicJack CAN serve as a landline replacement...assuming you have a cell phone around That does seem to be your pattern of reasoning throughout this thread. (I.e., "make it fit.").
said by iansltx:10. You still haven't defined "telco" for me. I don't believe I need to. I agree that, it may be hard to define the precise lines.
But, when MagicJack is a nationwide CLEC (through it's conveniently separated sister company), and advertises itself as being a replacement for a telco's services... the problem of precise lines isn't anywhere in sight.
said by iansltx:11. I'm serious, low-BW VoIP CAN run over a dialup connection. I know it can. But, now you have the rural people leaving their dial up service online, unable to receive landline calls. You just pushed them to exclusive VoIP, requiring their computer to be on 24x7.
I guess if you really want to defend race-to-the-bottom practices like MagicJack is engaging in, that would "fit" for you.
But, to me, it tends to validate why the law required telcos to connect to rural areas.
said by iansltx:12. Other than Google (offering a free, non-landline-replacement service), MagicJack (offering a dirt-cheap service) and SpeakEasy (who blocked only conference call numbers), who is doing this? I'd like to know. Chuckle.
Rewind to nine months ago. "Other than conference call services, who's blocking rural numbers?"
Can you hear me now?
said by iansltx:13. ... In the food service industry, if a guy comes in and makes five trips to your $10 buffet, eating $12 worth of food in the process, and does this every day of the week for three months, you might leverage your law-given ability to keep him off your private property. And yet, we have food stamps for the person who can't afford the $10 buffet. Like, how telcos were required to complete all calls -- even to more expensive rural exchanges.
And, the real point which you seem to continually evade is: MagicJack was making a very healthy profit before it blocked rural numbers.
See my example above about various usage patterns among customers, and how the light customers essentially subsidize the heavy ones.
I don't have any problem with MJ's "excessive use" policy. Although, I'd prefer it to be less ambiguous.
That policy is like your example of the buffett owner tossing the abuser out on the street.
Blocking rural numbers would be more like offering some customers spoiled food despite health regulations prohibiting that practice. And then claiming to be above the regulations(!).
said by iansltx:That's not a great analogy, but I'm not going to try too hard because I don't know which industry you're in. I don't believe I'm the one who needs an analogy. I think you just need a way to convolute what's being discussed into something that's really not analogous at all.
said by iansltx:14. LEC regs were made at a time when, to be a ILEC or CLEC, you had to have equipment at the central office of the customer you wanted to serve. The times, they have a-changed. As mentioned a few times, I don't have a problem with that. It's just not MagicJack's position to declare the regulations no longer have merit.
said by iansltx:MagicJack, like any other company in a highly competitive environment ... should have the right to make as much money as they can, Lawfully.
And, since MagicJack is making as much money as it can using technology that wouldn't exist without the helping hand of society (the internet, ILEC regulation, etc.), it's not far-fetched for regulations to exist to ensure all of society is well served by the result.
As mentioned a few times, magicJack was far from going broke 2 weeks ago, before blocking rural exchanges.
said by iansltx:Who are you going to go after next? Wal-Mart? What are you going to defend next, unregulated financial derivatives? | |
iansltx
join:2007-02-19
Golden, CO
kudos:2 Reviews:
·Verizon Online DSL
·Comcast
| 1. AT&T is making more money off the rural telcos than they're spending on interconnect fees. It's in their best interest to perpetuate the "hidden fee" system.
2. Your spoiled food analogy is a bad one. It's more like a restaurant saying that they sell Pepsi products but not actually carrying Sierra Mist.
3. Let me know when a provider with standard monthly VoIP rates (e.g. Vonage) starts blocking rural numbers.
4. NetTalk is an also-ran. They're trying to beat MagicJack at the market MagicJack created by gesticulating about how much better they are than MagicJack. Yes, their device is a full-on ATA rather than a USB dongle. However NetTalk has had to change its business model (they were Ooma-like a year ago, with a single device purchase for unlimited usage...they're like MagicJack now with yearly plus the device) and to my knowledge are renting phone numbers et cetera from other companies rather than doing a full-blown CLEC like MagicJack. But I digress...let me know when NetTalk starts blocking rural numbers.
I'm curious as to what you want to happen to MagicJack...I see the following outcomes:
1) MJ stops calling itself a telco
2) MJ closes
3) MJ raises rates, turns on rural numbers
4) MJ and other providers let people know what NPA-NXXes they don't cover, and point people to locations that they do cover
For what it's worth, you theoretically *can* buy YMAX CLEC service according to their tariff. So MagicJack is kind of a seperate deal (seperate rate structure, etc.).
Also, do you know how much other companies provide for $1.25 per month? Metered outbound access to ANYWHERE, plus free...you guessed it...toll-free or 911 calling. That's it! | |
Reviews:
·magicjack.com
| said by iansltx:let me know when NetTalk starts blocking rural numbers. Chuckle. That's what people said when it was suggested that blocking rural-based conference call numbers could lead to blocking more than conference call numbers.
Nine months later, "well... yeah, but tell me when more than one company blocks an entire exchange."
said by iansltx:I'm curious as to what you want to happen to MagicJack...I see the following outcomes: 1) MJ stops calling itself a telco 2) MJ closes 3) MJ raises rates, turns on rural numbers 4) MJ and other providers let people know what NPA-NXXes they don't cover, and point people to locations that they do cover I think I've already been clear about what I want to happen.
I'm curious why you keep invoking the "must raise rates" drama.
MJ had profit margins sufficient to excite the stock market before blocking rural numbers. They weren't losing money. Simply using the same reasoning with metro and rural exchanges which they use with light and heavy users (some subsidize the others).
said by iansltx:For what it's worth, you theoretically *can* buy YMAX CLEC service according to their tariff. So MagicJack is kind of a seperate deal (seperate rate structure, etc.). I agree. But, that doesn't change the fact that MJ is predominantly a phone company, providing phone services, using a sister company that is a nationwide CLEC.
said by iansltx:Also, do you know how much other companies provide for $1.25 per month? That's a non-sequitur. Other companies follow the law.
My concern is that MJ has given itself a competitive advantage by ignoring the law. Justifying it with "yeah, but we're so cheap" only shows how it is a competitive advantage, contributing to the motivation of other companies to do the same thing.
Your argument seems to be that, since I need to be competitive, and taxes make me uncompetitive, I should stop paying taxes. And, when anyone asks why that's ethical, I should point out that I require a smaller salary than my peers, therefore I shouldn't pay taxes. "Do you really want me to charge my employer a higher salary? That would be uncompetitive."
It's circular sophomorics. | |
iansltx
join:2007-02-19
Golden, CO
kudos:2 Reviews:
·Verizon Online DSL
·Comcast
| Okay, so file a class action lawsu...oh wait, nobody except the lawyers win on that one.
I have nothing worthwhile to contribute further to this discussion...and, news flash, neither do you. By all means, file your complaint with the FCC and encourage all your friends to do the same. Please find ALL of the numbers that MJ is blocking while you're at it.
I, meanwhile, will use that list of numbers to create an informational page that says, "If you call to any of these numbers at any time, MAGICJACK IS NOT FOR YOU. Otherwise, it's a great, albeit quirky, service and you should try it and see if you like it."
Also, you know who else blocks BUNCHES of phone numbers? Landline providers...if you don't have a long distance plan enabled on your account (rare but possible these days) you WILL NOT be able to call a whole lot of numbers.
But hey, that's another worthless piece of information, right? | |
Reviews:
·magicjack.com
| said by iansltx:I, meanwhile, will use that list of numbers to create an informational page that says, "If you call to any of these numbers at any time, MAGICJACK IS NOT FOR YOU. Otherwise, it's a great, albeit quirky, service and you should try it and see if you like it." All roads lead to Rome.
said by iansltx:Also, you know who else blocks BUNCHES of phone numbers? Landline providers...if you don't have a long distance plan enabled on your account (rare but possible these days) you WILL NOT be able to call a whole lot of numbers. But hey, that's another worthless piece of information, right? Actually, it sounds like another non sequitur.
Long distance costs more than the basic landline service, and is often provided by a company other than the local landline carrier. Having long distance disabled may be a result of the customer not wanting it (and the billing liability that arises). Or, the customer may have had trouble paying a bill, and had their long distance disabled. (I know an alcoholic chick who's living with that right now.).
Similarly, magicJack requires customers to pre-fund international calls. If they choose not to fund it, that's like international calling being "blocked."
The real difference is that the local landline carrier is not required by law to give you long distance if you choose not to have a plan (or, the plan provider cancels you for non-payment).
Likewise, magicJack is not required by law to give you international calling.
It's the "legal" thing. | |
iansltx
join:2007-02-19
Golden, CO
kudos:2 | So...wait...a CLEC is required by law to give you long distance?
News to me, and to the telephone cooperative turned CLEC nearby. You either pay for long distance and get it or...well...you don't pay for it and you don't get it. | |
Reviews:
·magicjack.com
1 edit | said by iansltx:So...wait...a CLEC is required by law to give you long distance? News to me, and to the telephone cooperative turned CLEC nearby. You either pay for long distance and get it or...well...you don't pay for it and you don't get it. You're going to have to start quoting what you're replying to.
Where did I say anyone is required by law to give anyone long distance? | |
iansltx
join:2007-02-19
Golden, CO
kudos:2 Reviews:
·Verizon Online DSL
·Comcast
| LECs aren't required to complete calls that are long distance because they cost more than local calls.
MagicJack shouldn't be required to complete all calls for a similar reason. Sure, the Internet has made local calling areas a bit of a moot point, but high-cost areas on the other hand still exist.
Flat-rate and unlimited long distance plans from landline and cell carriers tend to hide this issue because they've run the numbers and decided that the percentage of their subscriber base that calls high cost areas is minimal. Those call carriers and landline companies also charge more for service than MagicJack...way more.
MagicJack on the other hand has realized that some of their users will tend to exclusively call high cost areas (rural, conference calling) and as a result has made the business decision to disallow service to those regions. They don't offer recourse for this...maybe they should for a price per minute...but it isn't something that hasn't been done before. It just so happens that MJ's "local" area covers a lot more ground than any landline company's.
How much more, do you ask? Well, Verizon in my area covers Fredericksburg, TX, Willow City, TX, Doss, TX and Stonewall, TX. The combined populations of everything outside Fredericksburg is a couple thousand at most. Fredericksburg itself is on the order of 12,000 subscribers. I can call every single one of those subscribers with MagicJack, plus millions more. For a lower price than Verizon is charging for their landline service...even the basic unlimited-local landline service. I think that's a good thing. | |
Reviews:
·magicjack.com
| said by iansltx:LECs aren't required to complete calls that are long distance because they cost more than local calls. I never said LECs are required to complete long distance calls. Which is apparently why you don't want to quote what you're replying to. It makes it easier to create strawman arguments?
said by iansltx:MagicJack shouldn't be required to complete all calls for a similar reason. The problem is, MagicJack is serving the role of both a LEC and long-distance carrier, which is required by law to complete calls to rural LECs.
said by iansltx:Flat-rate and unlimited long distance plans from landline and cell carriers tend to hide this issue because they've run the numbers and decided that the percentage of their subscriber base that calls high cost areas is minimal. MagicJack "ran the numbers" too. They were making a terrific profit until blocking rural numbers 2-3 weeks ago.
They let higher-population areas subsidize the lower. In the same way lighter (1 call per 48 hours) users subsidize the heavier users (10 calls per 12 hours).
said by iansltx:Those call carriers and landline companies also charge more for service than MagicJack...way more. Reducing costs isn't an excuse to evade the law.
That's like saying "I don't pay income tax because I want to be 'competitive.' If you made me pay income tax, I'd have to charge as much as the people who do pay income tax. That would make me 'uncompetitive.'"
That's sophomoric.
said by iansltx: I think that's a good thing. See my immediately previous post about the selective nature of enjoying government subsidy. | |
Reviews:
·Comcast
| reply to amigo_boy
You chuckled when the poster said that you can run VoIP over a dial-up connection. I've only had broadband since 2000; my experience with VoIP predates that by four years. The impliciation therefore is that at some point I did indeed use VoIP over dial-up, which is absolutely true!
Consider VocalTec Communications, Ltd. and their Internet Phone application (they are, in fact, a direct fore-runner of both Skype and Vyatta). The client (originally for Windows 3.x and NT; later versions would support MacOS and Windows 9x) was specifically designed (using proprietary protocols) to work over low-bandwidth (such as dial-up) connections as a background application; typically, it required a 28.8k (then typical) dial-up connection to work (I would use it with 28.8, V.34, and later V.90 dial-up before going broadband in 2000). Their big moneymaker wasn't the client software (which they didn't charge much for), but their back-end (server) software (which was used to run virtual exchanges; it is this market which Vyatta holds today). Who did most of the screaming about VocalTec then? Among the ILECs, it was SBC (the true fore-runner of today's AT&T, then, it was the second-largest of the RBOCs and run by Ed Whitacre). Whitacre screamed because if enough of these *shoebox* rural ILECs folded, someone would be forced to take them over (by either the FCC or Congress). While even Whitacre knew he wouldn't be *stuck* with them all, he also knew that getting *stuck* with any of them would impact the bottom line in terms of capex impacts. | |
Reviews:
·magicjack.com
| said by PGHammer:You chuckled when the poster said that you can run VoIP over a dial-up connection. I did indeed use VoIP over dial-up, which is absolutely true! I chuckled because it means the rural resident would have to leave their computer on 24x7, tying up their phone line 24x7, requiring their neighbors to use VoIP over dialup to call them.
It doesn't sound like a reasonable solution just so VoIP companies can violate the law in pursuit of race-to-the-bottom profits.
said by PGHammer:While even Whitacre knew he wouldn't be *stuck* with them all, he also knew that getting *stuck* with any of them would impact the bottom line in terms of capex impacts. That's my concern too. Rural phone service is obviously subsidized to serve a social goal. If anyone disagrees with it (or feels it's being abused by traffic-pumping operations, or the subsidization should be targeted to grow broadband in those areas), the proper channel for policy review and change is the FCC and Congress.
Not simply opting out of the law. Giving their business an advantage over their competition.
Personally, I think the timing of this move is strange. MagicJack completed calls to rural areas for 3 years and made a healthy profit. Healthy enough that investors were excited when MagicJack began trading on the stock exchange a month ago.
When MagicJack began trading publicly, it released financial information from a time it was private and not subject to the accounting/reporting standards of the SEC and NASDAQ.
I'm curious whether those financials were a bit contrived ("cooked") and now MJ is feeling pressure to make its first release of regulated financials match the unregulated ones.
AT&T reported Google Voice to the FCC over blocked calls to rural numbers. (Google backed down, blocking only 100 numbers associated with traffic-pumping schemes.). As large as MagicJack is, it will be surprising if AT&T doesn't do the same thing. MagicJack uses AT&T to provide international calling. I don't know how large that business may be, and if that relationship could influence AT&T to look the other way. | |
Reviews:
·Comcast
| said by amigo_boy:said by PGHammer:You chuckled when the poster said that you can run VoIP over a dial-up connection. I did indeed use VoIP over dial-up, which is absolutely true! I chuckled because it means the rural resident would have to leave their computer on 24x7, tying up their phone line 24x7, requiring their neighbors to use VoIP over dialup to call them. It doesn't sound like a reasonable solution just so VoIP companies can violate the law in pursuit of race-to-the-bottom profits. said by PGHammer:While even Whitacre knew he wouldn't be *stuck* with them all, he also knew that getting *stuck* with any of them would impact the bottom line in terms of capex impacts. That's my concern too. Rural phone service is obviously subsidized to serve a social goal. If anyone disagrees with it (or feels it's being abused by traffic-pumping operations, or the subsidization should be targeted to grow broadband in those areas), the proper channel for policy review and change is the FCC and Congress. Not simply opting out of the law. Giving their business an advantage over their competition. Personally, I think the timing of this move is strange. MagicJack completed calls to rural areas for 3 years and made a healthy profit. Healthy enough that investors were excited when MagicJack began trading on the stock exchange a month ago. When MagicJack began trading publicly, it released financial information from a time it was private and not subject to the accounting/reporting standards of the SEC and NASDAQ. I'm curious whether those financials were a bit contrived ("cooked") and now MJ is feeling pressure to make its first release of regulated financials match the unregulated ones. AT&T reported Google Voice to the FCC over blocked calls to rural numbers. (Google backed down, blocking only 100 numbers associated with traffic-pumping schemes.). As large as MagicJack is, it will be surprising if AT&T doesn't do the same thing. MagicJack uses AT&T to provide international calling. I don't know how large that business may be, and if that relationship could influence AT&T to look the other way. That is the real issue - not that VoIP isn't possible over dial-up (it is), but that it would basically be a *nailed circuit*, which neither the subscriber, or the telco, really wants. (That is, in fact, the only advantage of low-speed broadband; it can be used for bandwidth-irrelevant services, such as domestic VoIP, without losing voice-grade circuits; Verizon, in fact, used to include low-speed ADSL or ISDN as a throw-in with Centrex.) MJ uses AT&T for the domestic half of international calling; however, the other half is not within MJ's purview (it's not within AT&T's purview, either). It is international calls (and the tarriffs of non-US telcos for those calls originating or terminating in the US) that has long been the driver for VoIP (this predates not only Vonage World, but even predates the founding of Vonage). It may well be the case that certain international exchanges do something similar to traffic-pumping (if not doing that outright), about which our FCC is powerless (has any country *successfully* complained to the ITU, the International Telecommunicatons Union, the international organization that is supposed to referee such disputes, about such things?). Submitting to what is basically blackmail is problematical for any business; however, by forcing *all* telcos to connect all domestic calls, even those known to associated with traffic-pumping, that is exactly what you are doing..
Doing evil in the name of good is still doing evil.
Congress? The same legislative body that has refused to even touch Fannie Mae and Freddie Mac, despite their actions burning us as a nation twice (first with the thrifts, and now the 2009 disaster) simply because they are being seen as too important to let fail? I have NO faith in Congress as a body to solve the problem (especially with their current leadership). It's not a Democratic or Republican issue (I detest the Congressional leaders of both darn near equally), but an issue of *incumbency*. | |
Reviews:
·magicjack.com
| said by PGHammer:however, by forcing *all* telcos to connect all domestic calls, even those known to associated with traffic-pumping, that is exactly what you are doing.. I don't believe it has to be a slippery slope.
The social goal was to promote telephone service for rural areas (the people living there). Not to promote free services for metro areas. Therefore, I wouldn't require them to serve traffic-pumping schemes.
said by PGHammer:Doing evil in the name of good is still doing evil. But, we accept (even eagerly welcome) a little evil for collective good all the time.
Things like zoning laws, building codes, food- & drug-quality laws, the SEC and FDIC, social creation of corporate entities -- a legal yet fictional "person" created out of thin air by societal fiat to protect officers and investors from their common-law responsibility for poor business and co-ownership choices.
All those things share the same theme. Impeding on what some people may like to do, so that everyone has the benefit of more predictable outcomes, less personal responsibility for their own choices, etc.
Why should protecting/subsidizing rural residents be different? Why should we stick it to them just because they chose to live in a rural area (and provide metro residents with raw materials)? | |
Reviews:
·Comcast
| said by amigo_boy:said by PGHammer:however, by forcing *all* telcos to connect all domestic calls, even those known to associated with traffic-pumping, that is exactly what you are doing.. I don't believe it has to be a slippery slope. The social goal was to promote telephone service for rural areas (the people living there). Not to promote free services for metro areas. Therefore, I wouldn't require them to serve traffic-pumping schemes. said by PGHammer:Doing evil in the name of good is still doing evil. But, we accept (even eagerly welcome) a little evil for collective good all the time. Things like zoning laws, building codes, food- & drug-quality laws, the SEC and FDIC, social creation of corporate entities -- a legal yet fictional "person" created out of thin air by societal fiat to protect officers and investors from their common-law responsibility for poor business and co-ownership choices. All those things share the same theme. Impeding on what some people may like to do, so that everyone has the benefit of more predictable outcomes, less personal responsibility for their own choices, etc. Why should protecting/subsidizing rural residents be different? Why should we stick it to them just because they chose to live in a rural area (and provide metro residents with raw materials)? And therein lay the *slippery slope* part of my original argument.
That *little evil* wound up becoming a camel's nose. While it may not have been the intent originally, that is pretty much the end result. (That's not me saying so - that is "United States v. American Telephone and Telegraph", AKA the original lawsuit against AT&T, and the Consent Decree thereof, saying so.)
The same thing, unfortunately, applies to the *little evil* associated with the promotion of home ownership. The end result (in every nation where that lofty social goal has been attempted) has been inflated housing prices, followed by a correction nearly as savage as that resulting from the Great Depression (and didn't that lead, pretty much directly, to that rather nasty mess called World War II?). | |
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