A Founder's Perspective on Free Conferencing
by
Ronald
on Sun 12 Sep 2004 04:37 AM EDT
Paul Berberian (the chairman and founder of Raindance, a web conferencing company) wrote a thoughtful article (hat tip: Feld Thoughts) in his blog about how some companies are taking advantage of a regulatory loophole to provide "free" conferencing services:
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Back to conference calling. So this is the scam / loophole -
1. Set up a CLEC where you buy your access from the ILEC (they have to sell it to you based on their cost - it's the law not a choice).
2. Set up a tariff and a relationship with a long distance provider where the access charges are high - the best way to do this is pick a region of the country that isn't densely populated or where the laws are more messed up.
3. Have users dial your local number - which is long distance for virtually everyone and make the long distance provider pay you for handing off the call to your bridge.
4. Have no intention of providing services like dial tone and access to help consumers gain access to more choices - strictly use the law to force the long distance company to pay you for handling the call.
5. Be small enough not to hit anyone's radar - sub $100M in fees.
Voila - free conference calling for the user! |
Paul argues that eventually, somebody is going to notice this and this loophole will end, but until that happens, a company such as AT&T is paying for this, thanks to the regulation of termination fees. The purpose of the law is to open up competition and compensate carriers for their investment in the infrastructure. However, this also opens the loophole exploited by "free conferencing" services.
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