Andy Oakley

Legacy incentives - How Can A Free Conference Call Be Free?

A great article titled How Can A Free Conference Call Be Free? describes how apparently free conference calling services fund themselves. The article does a good job explaining how an old law which made reasonable sense in 1996 has now formed a loophole whereby termination fees (the payments big carriers make to small telco providers) can today be used to cover the cost of running a service (and profit!) in a geographic area not covered by major telcos.

Although not exactly the case here, it reminds me of an excellent MetaFilter comment:

If you are not paying for it, you’re not the customer; you’re the product being sold.

In this case, that’s probably partially true too. Are these calls being recorded? Is your voice data being resold? (I haven’t checked the terms for the various services but it might provide a nice supplemental income stream). But the bottom line is that these services are not really free, it’s just that you, along with every other customer of the big carriers, have already subsidized their existence.

January 24, 2012