Friday, January 12, 2007

The Universal Service Fund -> free international calls

That's certainly not what the USF is for, but one enterprising person in Iowa is using it that way, according to a scheme described by Michael Arrington on TechCrunch:
Here’s my understanding of how this works: the founder created his own telephone company in Iowa. Iowa is apparently the only state taking advantage of an FCC kickback scheme that gives telco’s a portion of the fees generated from every inbound call to an Iowa number. So when you call the AllFreeCalls phone number, a portion of any long distance fees you are paying go to the company. The kickback is apparently authorized via the Universal Service Fund. These kickbacks are enough on average to more than cover the international outbound calling fees.
Arrington admits that he hasn't quite wrapped his head around how this works. I'd be surprised (and dismayed) if it were allowed to continue for long -- that's really not what the USF is for!


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1 comment:

NCIC Operator Services said...

Kinda sucks that our government is forcing the public to subside a standard state to state call at a rate higher than international calls.

You gotta feel sorry for the suckers that are subsidizing that... Who are those suckers? Anyone who pays their phone bill.