What's the catch with free conference calling services? Sounds too good to be true? Well, you're not the only one with those questions. Thousands of people wonder the same things every day.
There are really only a couple of things you need to recognize. First, there is a chance, however slight, that your call will be blocked from entering a free conference. And second, the entire business model may be short lived, depending on regulatory decisions. So, there's a chance that free conferencing won't be around too much longer.
Here is a very interesting background on how the free conferencing companies operate and the kinds of challenges they face in the business:
1) In 1996, the Federal government determined that small rural phone companies could charge larger long distance phone companies to access their lines. For instance, if you had a small phone company in Kansas, you could charge a large company like Qwest for any long distance calls coming into your area. As an example, if you lived in Seattle and used Qwest as a long distance carrier, and you called your cousin in rural Kansas, Qwest would have to pay the small phone company in Kansas a fee to put your call through. Why? Because the government recognized that the small phone companies had bigger costs in servicing rural areas and lower call volume. It cost more on a per call basis to operate and maintain a smaller company than a bigger one. So, the bigger companies pay more to access the equipment and phone lines owned by the smaller companies.
2) The fees that Qwest and the larger companies pay the small companies are 10 to 20 times more than the normal fees, which makes for a great deal for the rural phone companies. Very simply, the more calls they had coming in, the more money they would make.
3) How could the smaller phone companies attract more incoming phone calls from the larger phone companies, so they could make more money? That's easy. Just ask: What businesses have the most incoming calls? Well, two of them would be conference call companies and phone sex operators. For instance, a small rural phone company would make an agreement with a conference call company to set up shop in its area. In doing so, the rural phone company would split the revenues with the conference company that the big companies were paying to send phone calls there. The small rural companies were happy to make more money by dramatically increasing their incoming calls, and the conference call companies were happy because they could offer free service and make money at the same time. Needless to say, the consumers were happy as well. It was a good deal for everyone, that is, except the big long distance companies who were forced to pay the bills.
4) Moreover, to add insult to injury, the long distance companies found themselves in a double whammy. First, because the long distance companies offered many of their customers free long distance, either with cell phones or bundled with their customers' local landline service. And second, paying the smaller companies to have their calls delivered. Obviously, the large long distance companies were livid. AT&T, as one example, estimated that paying the rural companies to deliver their calls -- a system called "traffic pumping" -- cost it an extra $250 million in 2007.
5) In an attempt to stop these fees, some of the large long distance companies have blocked calls into the rural areas. (This is the reason why some users of the free conference services have experienced problems getting in conferences.) And while the government has made it clear that the long distance companies cannot block calls, problems still exist.
6) For example, the Google Voice service has blocked its users from dialing the rural phone companies. AT&T has officially complained about Google Voice saying fair is fair. If AT&T can't block calls and is forced to pay the fees to the small companies, then Google Voice should be required to play by the same set of rules and allow calls to go through and pay the fees like the other big companies. AT&T has used Google's own argument that carriers should be neutral, and that a provider should not block "fair access." However, AT&T stands united with Google in its argument that "traffic pumping" and being forced to pay the small companies higher than normal fees to access their systems is "patently unlawful."
7) Several months ago the Iowa Utility Board made a decision that was big set back for the small rural phone companies. A complaint had come from Qwest, a major long distance carrier, that the traffic pumping schemes were unfair and costly. The Iowa Board agreed and told the small rural companies that they would have to pay back millions of dollars. Qwest said that the Iowa ruling would become a model for future decisions on the federal level, including cases in front of the FCC that could be handed down this year.
No one can predict the outcome of what will happen next. However, with the Iowa decision, the future of free conference calling has become cloudy. And with the political clout of the larger companies at play, including aggressive legal actions, the days of free conference calling could be numbered.
Many conference call companies that offer paid service (not free) have stayed out of the fray and are standing on the sidelines waiting to see what happens. In the vast majority of instances, calls are not being blocked going to the paid conference services, which is why thousands of businesses, both large and small, continue to patronize and do business with the paid conference services.
There are really only a couple of things you need to recognize. First, there is a chance, however slight, that your call will be blocked from entering a free conference. And second, the entire business model may be short lived, depending on regulatory decisions. So, there's a chance that free conferencing won't be around too much longer.
Here is a very interesting background on how the free conferencing companies operate and the kinds of challenges they face in the business:
1) In 1996, the Federal government determined that small rural phone companies could charge larger long distance phone companies to access their lines. For instance, if you had a small phone company in Kansas, you could charge a large company like Qwest for any long distance calls coming into your area. As an example, if you lived in Seattle and used Qwest as a long distance carrier, and you called your cousin in rural Kansas, Qwest would have to pay the small phone company in Kansas a fee to put your call through. Why? Because the government recognized that the small phone companies had bigger costs in servicing rural areas and lower call volume. It cost more on a per call basis to operate and maintain a smaller company than a bigger one. So, the bigger companies pay more to access the equipment and phone lines owned by the smaller companies.
2) The fees that Qwest and the larger companies pay the small companies are 10 to 20 times more than the normal fees, which makes for a great deal for the rural phone companies. Very simply, the more calls they had coming in, the more money they would make.
3) How could the smaller phone companies attract more incoming phone calls from the larger phone companies, so they could make more money? That's easy. Just ask: What businesses have the most incoming calls? Well, two of them would be conference call companies and phone sex operators. For instance, a small rural phone company would make an agreement with a conference call company to set up shop in its area. In doing so, the rural phone company would split the revenues with the conference company that the big companies were paying to send phone calls there. The small rural companies were happy to make more money by dramatically increasing their incoming calls, and the conference call companies were happy because they could offer free service and make money at the same time. Needless to say, the consumers were happy as well. It was a good deal for everyone, that is, except the big long distance companies who were forced to pay the bills.
4) Moreover, to add insult to injury, the long distance companies found themselves in a double whammy. First, because the long distance companies offered many of their customers free long distance, either with cell phones or bundled with their customers' local landline service. And second, paying the smaller companies to have their calls delivered. Obviously, the large long distance companies were livid. AT&T, as one example, estimated that paying the rural companies to deliver their calls -- a system called "traffic pumping" -- cost it an extra $250 million in 2007.
5) In an attempt to stop these fees, some of the large long distance companies have blocked calls into the rural areas. (This is the reason why some users of the free conference services have experienced problems getting in conferences.) And while the government has made it clear that the long distance companies cannot block calls, problems still exist.
6) For example, the Google Voice service has blocked its users from dialing the rural phone companies. AT&T has officially complained about Google Voice saying fair is fair. If AT&T can't block calls and is forced to pay the fees to the small companies, then Google Voice should be required to play by the same set of rules and allow calls to go through and pay the fees like the other big companies. AT&T has used Google's own argument that carriers should be neutral, and that a provider should not block "fair access." However, AT&T stands united with Google in its argument that "traffic pumping" and being forced to pay the small companies higher than normal fees to access their systems is "patently unlawful."
7) Several months ago the Iowa Utility Board made a decision that was big set back for the small rural phone companies. A complaint had come from Qwest, a major long distance carrier, that the traffic pumping schemes were unfair and costly. The Iowa Board agreed and told the small rural companies that they would have to pay back millions of dollars. Qwest said that the Iowa ruling would become a model for future decisions on the federal level, including cases in front of the FCC that could be handed down this year.
No one can predict the outcome of what will happen next. However, with the Iowa decision, the future of free conference calling has become cloudy. And with the political clout of the larger companies at play, including aggressive legal actions, the days of free conference calling could be numbered.
Many conference call companies that offer paid service (not free) have stayed out of the fray and are standing on the sidelines waiting to see what happens. In the vast majority of instances, calls are not being blocked going to the paid conference services, which is why thousands of businesses, both large and small, continue to patronize and do business with the paid conference services.
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