SEATTLE—Speakeasy.net, a Seattle-based provider of broadband services, including VoIP, has informed its customers that it will now block calls to certain free conference call and adult websites. The change to their terms of service was made after it was revealed that Google Voice, the search engine’s new service, blocks calls to certain rural areas.
According to Common Knowledge Legal Director Harold Feld, the odd economics of telephone networks has spawned business models that have led to the current impasse.
“For various reasons,” writes Feld, “phone networks in rural areas get paid much more money when a call comes from another network and terminates on the rural network. This means if you have a business where lots of people call in and few people call out, you can make money from the uneven compensation. So some clever folks figured out how to take advantage of this and offer some very popular services—free conference calling and porn being the most well-known.”
Established carriers fought these models for years, in court and in regulatory arenas, often portraying the destinations in nasty terms, but without success. In 2007, frustrated with their lack of success, some of the carriers simply stopped connecting the calls, which is when the Federal Communications Commission (FCC) stepped in.
“The FCC—recognizing that allowing telephone companies to decide with whom they will or won’t connect would completely undermine the telephone system which depends on interconnection—slammed down on self-help hard,” says Feld.
The commission issued a declaratory ruling in June 2007, ordering that “no carriers, including interexchange carriers, may block, choke, reduce or restrict traffic in any way.”
The FCC also said at the time that it would take a close look at what the telcos referred to as “traffic stimulation,” but have since done nothing to remedy the situation. “In fairness to the FCC,” says Feld, “it is hard to turn off people’s free conference call service. It is also not so easy to write a rule that distinguishes nasty bad bad traffic pumping from ‘legitimate businesses’ like service call centers that often locate in rural counties (when not in India) for the low labor costs.”
According to Feld, unless the FCC acts soon to address the concerns of both the traditional carriers and the new service providers, more VoIP providers will follow Google’s—and now Speakeasy’s—lead.
“But the problem is it is not at all clear what the right decision is for VoIP providers even in the short term. Worse, it is not even clear what the right answer is or whether Google Voice is like Speakeasy or like something else entirely,” says Feld.
A link to the prefixes and area codes currently being blocked by Speakeasy can be found here.
