Archive for November 26, 2006

Free international phone calls. Seriously.

November 26, 2006 1 comment

A company in Iowa called Future Phone is offering “free” international phone calls, where you call one of their numbers, then punch in the number of the phone you want to call in up to 50+ countries. You do need to pay whatever you pay for a domestic long distance call to a number in Iowa (assuming you don’t live within local calling distance of the gateway access numbers Future Phone is advertising,) but you don’t pay for the international call itself. How come?

The short answer is probably “It’s not really free, but you’ve already paid for it,” and has to do with what are called access fees. When you make a domestic long distance call in the US, you indirectly pay a terminating “access charge” to the carrier who owns the last mile connection to whomever you are calling. Usually, these fees are a fraction of a penny, but some rural phone service providers (like in Iowa) are allowed to charge much higher access fees because, in the view of the regulators, the rural carriers need this indirect subsidy. All the long-distance carriers pay this and build it into their pricing structure, so the costs are spread across their entire subscriber base. So, even if you never use this service, you’ve paid for it. But we’re still talking only pennies per person per call so nobody really kicks about it on the consumer end. Future Phone is most likely making enough money to cover their expenses and make a nice profit through the higher rates they charge your telephone company (and you, since the cost gets passed to you.) Without the regulators allowing the higher termination fees, Future Phone probably wouldn’t have been able to offer this service.

What’s this all mean? It means an international phone call for the price of a long-distance domestic call. If you have a rate plan with your phone provider where you pay a set rate for unlimited domestic long-distance, it means you can get international calling to the nations covered by Future Phone for no additional cost. There is the possibility that mobile phones aren’t covered by this arrangement (it can vary by country) but it should work for all landlines.

Categories: Geeky
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