(This post originally appeared on The Guardian)
Ever wonder how those “free” conference call services make their money? Here’s how.
When you and I – like countless small business owners – sign up, we’re usually assigned a number that contains a not-so-familiar area code (mine is 712, which is in a rural part of Iowa). Why? Because the telecommunications provider in that not-so-familiar location gets to collect fees from larger telecommunications providers based on the volume of calls that are routed through their system. So when a “free” conference calling service intentionally routes calls through those smaller carriers, it generates extra revenue for them, which is then shared with the conference calling service.
Basically, it’s a loophole that both the rural providers and the free conference calling services legally and fairly exploited. It was set up decades ago for the right reasons: the FCC wanted to level the playing field and fairly compensate those smaller and rural phone providers for calls routed through them by their larger counterparts. But times have changed, and just a few weeks ago the FCC unanimously voted on a measure to modify the rule. The result? Many of those “free” conference calling services may not be so free any more.
“There is no legitimate economic or engineering reason why carriers, and ultimately consumers, must pay outdated tariffed transport charges to carry incredibly large volumes of traffic to these remote areas,” AT&T, one of the larger telecoms argued in comments to the commission.
“We know our service is a vital lifeline for millions and millions of families, non-profits, government agencies, prayer groups, small businesses, and consumers,” FreeConferenceCall.com – one of the largest and most popular services which handles approximately eight billion minutes of phone calls through switches in Iowa and South Dakota – wrote on their blog before the vote. “We believe free connections are a right, and we are committed to do everything we can to preserve and protect that right for years to come.”
The rural telecommunications companies, of course, aren’t happy either. They complained to the FCC that consumers would be deprived of a free service and that prices wouldn’t be lowered because the big telecoms will probably use their fee savings elsewhere.
Unfortunately, those complaints fell on deaf ears. According to the Wall Street Journal, the FCC’s ruling will mean that, within a few months, those rural carriers will be forced to bear more of the cost for their higher call volumes.
So what going to happen to our beloved free conference calls?
It will “force us to make significant changes to how we run our business, create an uneven playing field that favors paid services and increase confusion leading to years of litigation”, FreeConferenceCall.com says. The company – and others like it – may be obliged to charge fees or take on advertisers, or they may lose customers to large tech companies like Google who bear the costs of their free services in exchange for their customers’ data.
None of that sounds great for all the small businesses (like mine) that have enjoyed the free perk over the years. But you know when something sounds just too good to be true? Yeah, it’s that.
