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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