File puptcrit/puptcrit.0610, message 140


From: mjm <mmoynihan-AT-wi.rr.com>
Date: Thu, 19 Oct 2006 22:51:40 -0500
To: puptcrit-AT-lists.driftline.org
Subject: Re: [Puptcrit] SKYPE video confercning on iMac?


more on free long distance calls
FWD from NYT
October 19, 2006, 9:59 am
The Final Word on Futurephone

By now, you might be sick of hearing about Futurephone, the company I 
recently profiled in my blog because it offers totally free 
international phone calls to over 50 countries. No signup, no fees, no 
surrendering your name or address.

Man, we=92re a cynical bunch these days. Very few of you were persuaded 
that Futurephone=92s business plan is what its chief executive says it 
is: =93to build up the company=92s brand-name recognition. Our plan is to 
offer additional services in the future.=94

Last week, I attempted to shoot down some of the sillier explanations 
of Futurephone=92s real game =97 the ones where readers speculated that the 
company is going to harvest its customers=92 phone numbers (why? =97 isn=92t 
the phone book much more convenient?) or listen in to the calls (wayyyy 
too boring to be plausible).

This week, several of you suggested that Futurephone=92s actual business 
plan is far more complicated =97 and far more plausible. If it=92s true, 
it=92s incredibly clever.

In his blog for example, Alec Saunders explains this game of telecom 
arbitrage like this:

=93Ever wonder why it is that FuturePhone, Radio Handi, 
FreeConferenceCall, and PartyLine Connect all have access numbers in 
the 712 area code? These services all provide =91free=92 services to you. 
There=92s =91no catch.=92 You just have to make a long distance call to get 
them.

=93So how do these services get paid, and why are the access numbers all 
in Iowa? The short answer is tax subsidies.=94

He goes on to explain that our government gives the states money to 
help them with maintenance and improvements to local telephone plants. 
There=92s also an invisible tariff involved, amounting to three cents per 
minute collected by the *terminating* phone company.

Alec speculates that Futurephone is performing a sort of tariff 
arbitrage.

=93Let=92s take FuturePhone as an example=85All you have to do is call 712 
858 8883 (a number provided by the tiny Superior Telephone Coop in 
Estherville, Iowa), and then enter the international call you want to 
make using the standard 011 prefix.

=93So how do they make money? =85 Say that FuturePhone=92s cost to terminate 
the call is 1.25 cents. That leaves 1.75 cents per minute to split with 
the folks at Superior Telephone Coop. Give them half, which leaves you 
0.875 cents per minute, and you=92ve got a pretty attractive proposition 
=85 Everybody wins! The good citizens of Iowa win (they=92ve now got a 
fiber network joining up 150 of their independently owned telcos), 
FuturePhone has a seemingly profitable business model, and you win by 
getting cheap overseas calls.=94

Now, Alec goes on to imply that this plan is sneaky and that somehow 
you wind up shouldering the burden. Me, I don=92t see anything wrong with 
it. The Futurephone guy and his fellow Iowans have stumbled upon a 
clever scheme, if they are indeed using this arbitrage ploy. It=92s 
perfectly legal, and does, in fact, win us free overseas calls. (Alec 
ignores, for example, the fact that many people have cellphones or home 
phones with unlimited long distance for a fixed price. For us, these 
international calls are really, truly free.)

So is that what Futurephone is doing? I asked Futurephone=92s Tom Doolin 
point-blank this week.

All he=92ll say in response is that, =93Our company is private and we do 
not disclose proprietary or confidential information.=94

But he did note that the company is now =93actively pursuing potential 
advertising sponsors.=94 That=92s a new bit of information, which I found 
explained in more detail on an ABC News Web article. =93They=92ll listen to 
a 10-second commercial if they can make a free call,=94 Mr. Doolin told 
ABC News. =93In the middle of next year you might see something like 
that.=94

(He also, by the way, stressed that, =93In response to your follow-up on 
personal privacy, let me assure you that Futurephone.com does not 
record people=92s telephone conversations.=94)

For now, I think a lot of the commenters and bloggers are being too 
cynical. My own reaction is much more along the lines of this reader=92s 
comment:

=93It WORKS! I just called a relative in a small town in Greece from my 
cell phone and was connected immediately. (I have never been able to 
call using my cell phone before.)

=93To those who think that Big Brother is monitoring the calls: if they 
are the least bit interested in my conversation =97 in Greek =97 with an 
86-year-old aunt, so be it; you just saved me $50-$100 a month!=94
_______________________________________________
List address: puptcrit-AT-lists.driftline.org
Admin interface: http://lists.driftline.org/listinfo.cgi/puptcrit-driftline.org
Archives: http://www.driftline.org

   

Driftline Main Page

 

Display software: ArchTracker © Malgosia Askanas, 2000-2005