Magic Jack Has Wrist Slapped Over Access Charges FCC Backs AT&T in VoIP Connection Fee Dispute A post over at the Telecom Law Monitor notes that discount VoIP operator Magic Jack and their parent company YMax have had their wrist slapped by the FCC -- for trying to impose connection tariffs on AT&T. In a complaint, AT&T claimed Magic Jack was disingenuous in the way it presented its service, using its CLEC Ymax to charge undeserved access charges. AT&T refused to pay access charges for calls terminating to MagicJack users, and 8YY traffic originating from MagicJack users. The FCC ruling could be a tricky one for Magic Jack, whose discount phone service was clearly being subsidized by just these kinds of charges. In the comment section over at Forbes, Magic Jack founder Dan Barislow says the ruling doesn't hurt them, the fault lies with AT&T, and AT&T owes a number of providers money: As far as what this meant financially for us, we haven’t collected the proper amount of charges from AT&T in a long time. Verizon is not paying anybody associated with VOIP for ages. From a cash standpoint, we will save money. Our legal fees were much higher than what we could collect. They will subside-a lot. We have actions in Federal court,and regardless of if our Tariff was correct or not,based on technicalities, we are still entitled to collect. This action in the FCC was for 35% of what AT&T owed us. We were fighting not getting paid,when most of our competition would not.
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 | | What should they be paid for? Just another example of corporate greed. | |
|  |  Romney2012Defeat Obama 2012-Chg we can believe inPremium
join:2002-03-03
USA
kudos:4 | Re: What should they be paid for? The bigger issue is the FCC rules concerning "intercarrier compensation" and how that was used in the past to subsidize calls to & from small rural carriers. Some of these VOIP firms & 1-800 services used these old rules to basically overcharge the LEC carriers. The FCC is going to revamp these rules soon:
»www.telecomlawmonitor.com/2011/0···er-nprm/ | |
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| | Re: What should they be paid for? Aren't customers already paying for the service? | |
| | iansltx
join:2007-02-19
Golden, CO
kudos:2 | Re: What should they be paid for? MagicTalk is free. | |
| | | Romney2012Defeat Obama 2012-Chg we can believe inPremium
join:2002-03-03
USA
kudos:4 | Re: What should they be paid for? No, it is $20/yr | |
| | | | iansltx
join:2007-02-19
Golden, CO
kudos:2 | Re: What should they be paid for? Talk, not Jack. | |
| | | | | Romney2012Defeat Obama 2012-Chg we can believe inPremium
join:2002-03-03
USA
kudos:4 | Re: What should they be paid for? My bad. Since we were discussing MagicJack in the story, my brain filters kicked in and just saw Magic Talk as Magic Jack. | |
| | | | | | iansltx
join:2007-02-19
Golden, CO
kudos:2 | Re: What should they be paid for? No problem. Same company though. | |
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| | | | | | | | Reviews:
 ·magicjack.com
| Re: What should they be paid for? said by Gbcue:I thought MagicJack was $40 a year. $40 for the device and first year, $20 for each additional year.
Magictalk is free to call other Talk and Jack users, but you can't call landline/cell users (like you can with Jack). Landline/cell users can call the free Talk users using a special access number (creating something of a "traffic pumping" condition).
Magictalk can be upgraded for $20 to call landline/cell users like you can with Jack. At that point it's basically Magicjack without the USB device.
However, there's weirdness with upgraded Talk. For example, they charge you $10 for each computer you install it on. If you buy it, and buy Jack, you can use Talk with your Jack phone number (basically using Jack without the USB device). But, if you already own Jack, you can't use the Talk softphone with your Jack phone number without first buying a year of Talk.
I.e., a Jack user may just want to use their already-purchased service without the failure-prone USB device. They've already paid for softphone usage. The Talk softphone is the exact same softphone, it just doesn't require the USB device to be plugged in when it detects you're a Talk user.
This stuff is classic Borislow. Completely confusing, unintuitive, and designed to nickle-dime people to death. There's no reason a Talk user should have to spend $10 to install the softphone on their work computer, or their wife's laptop. There's no reason a Jack user should have to buy Talk for $20 just to use their Jack service without the USB device (which is the only difference between Talk and Jack).
I really don't recommend this company to anyone unless they have just one goal: save money. Even then it's a questionable value proposition. You can spend hours on chat with a dimwit in India reading a script, instructing you to do things that can destroy your computer. You can have the USB device fail, and they'll gouge you on shipping and handling for a replacement. You can paint yourself into a corner, having to pay $20 to use a new feature. Or, you can find your credit card charged for no apparent reason.
You definitely get what you pay for. Nobody should expect much for $1.67 per month. You can save a lot of money at that price point. But, it can also be a false savings. I've saved a lot. But, it's not for everyone. | |
| | | | |  dvd536as Mr. Pink as they comePremium
join:2001-04-27
Phoenix, AZ
kudos:4 | said by Gbcue:I thought MagicJack was $40 a year. the device is $40[assuming it lasts a year due to the 3 sec open flash for read/write] and includes one year of service[$20]
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The early bird gets the worm but the second mouse gets the cheese | |
| | | | | | Reviews:
·magicjack.com
| Re: What should they be paid for? said by dvd536:the device is $40[assuming it lasts a year due to the 3 sec open flash for read/write] and includes one year of service[$20]
DVD's still spreading this FUD.
1. They stopped the 3-second open close at least 18 months ago.
2. For the past 6-12 months, new MJ units don't have internal flash memory.
There's plenty to criticize MJ about. Misinformation doesn't help. Especially when it's intentional. | |
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| | Reviews:
·magicjack.com
| Subsidized by termination fees via its "access number" for landline/cell users to reach "talk" customers who can't call out (and therefore incur termination costs).
I think greed has something to do with it. Not just the corporation, but the customers who like free stuff but don't want to ask who's paying the bill. | |
| | | | iansltx
join:2007-02-19
Golden, CO
kudos:2 Reviews:
 ·Verizon Online DSL
 ·Comcast
| Re: What should they be paid for? Correction: free/ridiculously cheap to the end user, but with cost to companies who want to charge MJ access fees to access their PSTN blocks. MJ is happy to "peer" with whoever will have them and, to be honest, termination rates to MJ aren't bad at all. I think they're on the order of .75¢/min, if not less, in bulk. | |
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|  Aggie DanStop... Reverse That.Premium
join:2001-01-30
Frisco, TX | Peering Disputes Essentially, this is the same discussion that has raged between different providers and peering disputes. When the telecom act rules were drafted, the provder of the person receiving the call is due a small fee in order to complete the call. This is akin to using the "last mile" of the network when discussing traditional telephony.
So, is Magic Jack owed money? Yes.
Should they build a business model around collecting fees from other service providers when they have no last mile network to support? Questionable.
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Note : The statements made by myself are my own and not the opinions of my employer or of my coworkers. 15.81 GHz Crunching Power | My Random Thoughts... Yes, I have thoughts. | |
| | | | It seems to me that if AT&T has the right.... It seems to me that if AT&T has the right to demand these fees from MagicJack when AT&T completes a call that it should also work the other way.....
Typical FCC-corrupt to the core. It SO needs to be abolished!! | |
| | | Reviews:
·WOW Internet and..
| Re: It seems to me that if AT&T has the right.... this is the reason on why the FCC needs to be shut down and redone. They over step the laws that created them and the laws that they're able to enforce. They don't servce any purpose any longer. We don't have any issues with pirate radio stations as the public did back when they were created. And that was the ONLY reason they were created. Thank Clear Channel Communications for their creation. | |
| | | | Reviews:
·MSN
·Brand X Internet
·DSL EXTREME
| Re: It seems to me that if AT&T has the right.... said by hottboiinnc:this is the reason on why the FCC needs to be shut down and redone. They over step the laws that created them and the laws that they're able to enforce. They don't servce any purpose any longer. We don't have any issues with pirate radio stations as the public did back when they were created. And that was the ONLY reason they were created. Thank Clear Channel Communications for their creation.
Actually, by approving IBOC digital radio, the FCC did the OPPOSITE of what they are in existence for-they approved something that CAUSES interference to other radio stations!!
It's all about graft and patronage and money.... | |
| | | | |  rchandraStargate Universe fanPremium
join:2000-11-09
14225-2105 | Re: It seems to me that if AT&T has the right.... ...and let's not forget all those pesky GPS receivers too which could have trouble. Ditto for the hams and emergency services personnel with broadband over power lines. | |
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| | Reviews:
·magicjack.com
| said by qworster:It seems to me that if AT&T has the right to demand these fees from MagicJack when AT&T completes a call that it should also work the other way.....
Typical FCC-corrupt to the core. It SO needs to be abolished!!
The problem is that Magicjack brought this on itself. They've played an openly duplicitous game. For example: the Magicjack Terms of Service say you agree that you're buying a "multimedia experience, not a telephone service." The company has used that to claim they're not subject to telephone regulations (like AT&T is).
At the same time, the company advertises that it's perfect landline replacement ("never pay a phone bill again."). It plays up how it's a CLEC, unlike other VoIP providers. But, when convenient, claims its not.
Another example is how it blocked calls to typical "traffic-pumping" numbers. Those services locate in high-tariff rural areas and earn their money from the tariff.
That sounded reasonable, except real long-distance providers are prohibited by law from doing that. Magicjack claimed it's just a "multimedia experience," not a long-distance provider (while, at the same time, advertising "save hundreds on long-distance calls.").
To make matters worse, Magic*talk* subsidizes its free service using an "access number" for landline and cell users to call a *talk* user. They didn't locate the number in a high-tariff area. But, that is the definition of traffic pumping. (I.e., the free users are prevented from calling landlines and cell users. Therefore, *talk* pays no tariffs. But, it collects tariffs.).
The whole tariff/interconnect thing needs to be changed. The problem is how to subsidize rural areas. Many may not need it any longer. Or, not to the extent they were subsidized. And, maybe the subdidy should be to promote broadband (WISP) deployment so rural residents can get some VoIP love. Not subsidizing legacy copper PTSN networks.
Magicjack is forcing that topic too, because they've been blocking calls to hundreds of thousands of rural telephone numbers since last August. The entire state of Alaska is blocked.
That's something AT&T can't do. No other VoIP provider is doing that.
Trust me, Magicjack brings a lot of this on itself. | |
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| |
 cdruGo ColtsPremium,MVM
join:2003-05-14
Fort Wayne, IN
kudos:5
 ·Frontier FiOS
| Sense of entitelement quote:
regardless of if our Tariff was correct or not,based on technicalities, we are still entitled to collect.
If that doesn't point out a sense of entitlement, I'm not sure what does. "I don't care if I deserve this money, you are still required to give it to me just because." | |
| | Reviews:
·magicjack.com
| Re: Sense of entitelement said by cdru: quote:
regardless of if our Tariff was correct or not,based on technicalities, we are still entitled to collect.
If that doesn't point out a sense of entitlement, I'm not sure what does. "I don't care if I deserve this money, you are still required to give it to me just because." Borislow's entire Forbes "reader comment" was unintelligible. If you read that absent the story he was commenting on you'd get the idea he WON. He makes it sound like the FCC did him a favor. Nothing makes sense, like "they stopped us from wasting money on legal fees. That's a net positive!"
That guy seems like a real flim-flam artist. I loved the sentence where he said AT&T has nothing to be proud of. Borislow gave fake product dates for 3 years. He used a random number generator to depict actual subscribers. He said every day that the trial offer ended that day. He enabled auto-renewal without informing his customers (who were surprised to find credit card bills). He advertised "talk as long as you want" and imposed a call cap. He sold 4 years of service as 5.
And then there's the whole "multimedia experience" duplicity I described in a prior post.
In fairness, you can save some serious dough with Magicjack. (That may change if they have to charge more to recoup termination fees.). But, you feel like you're doing business with the Gambino family. Virtually nothing Borislow says is true. There's never any new features or services. It looks like a sinking ship. You may occasionally have your pocket picked. But, if you can deal with all that, it's a good service (for the money) despite Borislow. | |
| | |  DavidNow accepting new patientsPremium,VIP
join:2002-05-30
Granite City, IL
kudos:70
·AT&T Southwest
 ·DIRECTV
·AT&T Midwest
·Google Voice
| Re: Sense of entitelement said by amigo_boy:That guy seems like a real flim-flam artist. I loved the sentence where he said AT&T has nothing to be proud of. Borislow gave fake product dates for 3 years. He used a random number generator to depict actual subscribers. He said every day that the trial offer ended that day. He enabled auto-renewal without informing his customers (who were surprised to find credit card bills). He advertised "talk as long as you want" and imposed a call cap. He sold 4 years of service as 5.
And then there's the whole "multimedia experience" duplicity I described in a prior post.
In fairness, you can save some serious dough with Magicjack. (That may change if they have to charge more to recoup termination fees.). But, you feel like you're doing business with the Gambino family. Virtually nothing Borislow says is true. There's never any new features or services. It looks like a sinking ship. You may occasionally have your pocket picked. But, if you can deal with all that, it's a good service (for the money) despite Borislow.
At first I kind of thought MagicJack was great, and it still is to an extent, Dan has a good idea. However, step into a MagicJack talking forum and it's a whole different story to say the least.
The people over at the unofficial MagicJack support forum almost make me feel like I am sponsoring some form of terrorism.
--
If you have a topic in the direct forum please reply to it or a post of mine, I get a notification when you do this.
Koetting Ford, Granite City, illinois... YOU'RE FIRED!!
| |
| | | | Reviews:
·magicjack.com
| Re: Sense of entitelement said by David:At first I kind of thought MagicJack was great, and it still is to an extent, Dan has a good idea. However, step into a MagicJack talking forum and it's a whole different story to say the least.
That seems to be the problem. MJ is a good idea. It's just too bad it was Dan's idea. He seemed to take the attitude that it was a good enough idea to cover any shortcoming.
- We didn't notify you were going to automatically bill your credit card? What do you want for $1.97 per month?
- We didn't warn you of 30-minute call caps? (ditto)
- You're not happy about being blocked from calling a million rural phone numbers? (ditto)
Borislow developed a great reputation for an inexpensive VoIP service, and bad reputation disreputable business practices. He seemed to have no regard for his reputation because... "it's such a fantastic bargain."
These things seem to be catching up to him. For the year ending Sept. 20010, revenues were cratering. Direct sales were way down, and sales through retailers were down a little. This means he's getting far less money for the USB device which was always speculated to be the high-margin part of the sale. (It's been speculated for 3 years that the USB device is like a Ponzi scheme. Existing users who buy additional years of service are subsidized by the sales of high-profit USB devices to new customers.).
In December they said sales/revenue had continued to decline in Q4, and were expected to decline still further in Q1. They said the much-hyped "Plus" device (slated for the end of Q1) would reverse the trend.
Well, we're into Q1, and like all dates Borisow gives, still no "Plus." So, there's the confluence of sales diminishing and missed product dates.
Now we have the FCC reducing MJ's termination fees (in large part due to MJ evading regulation with childish attempts to portray itself as not a telephone service, while charging other companies like it is a full PTSN network.).
I don't think any of this looks good for MJ. Primarily ominous is that sales declined during the worst economic downturn in 75 years. If there was ever a time to bargain hunt and ignore PT Barnum-like antics it would have been Sept. 2008 through Sept. 2009. It's hard to believe sales will improve as the economy improves.
It seems Borislow got lazy. He didn't add any new features for 3 years. He didn't try to rise to a higher ethical standard. He excused every slimey practice with "but we're saving people billions of dollars."
Now everyone's getting into his space. Google's doing free. Obihai is doing ATA for Google (with softphone and smartphone apps). Nettalk is doing ATA and smartphone. Skype is doing smartphone.
In the meantime, Borislow keeps giving fake dates. He missed softphone only by 6 months. He's missed smartphone by 8 months (and counting). The ATA (Plus) service is late.
But, he bought a professional soccer team for his daughter.
I'll miss my cheap phone service. But, I don't see this having much more future. The guy seems totally out of touch. I don't think he can continue talking his way around stuff. At some point he has to deliver. | |
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| DavidNow accepting new patientsPremium,VIP
join:2002-05-30
Granite City, IL
kudos:70 | it's a bad problem to have, but how to fix is probably going to be tougher. | |
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dvd536as Mr. Pink as they comePremium
join:2001-04-27
Phoenix, AZ
kudos:4 | Not surprising Everything this company does is underhanded | |
| |  BHNtechXpertBHN StaffPremium,VIP
join:2006-02-16
Saint Petersburg, FL
kudos:32
 ·Clearwire Wireless
| Re: Not surprising said by dvd536:Everything this company does is underhanded
Agreed  | |
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| | | just in magic jack lobbying dollars spent 2010 ZERO
magic jack lobbying dollars spent 2011 10,000,000
magic jack fcc issues 2012 zero
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ummh union bad, ummh union bad, please tell me what else to regurgitate | |
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Here's an idea
