February 08, 2007
Free FuturePhone International Calls Not So Free
At least not for AT&T, who apparently had to foot a bill for US$2M per month, according to GigaOm. I'm behind on my VoIP reading again, but apparently AT&T's lawsuit against them has caused FuturePhone to slap a huge red sign on their website: "This service is no longer available."
FuturePhone played a sort of telephony arbitrage, setting up a phone number in telco-friendly Iowa, who offers certain subsidies. For whatever it cost you to call the Iowa number, you could terminate your call to an international number for free. I suggest you read the GigaOm article for a clearer explanation, but essential this arbitrage amounts to who foots the call termination costs, and instead of being billed $2,000/mth, AT&T got billed $2M/mth due to FuturePhone's "unlawful practices".
A few other states have similar subsidies for telcos. Gizmo Project's parent, SIPphone, has a VoIP service named area775 based in Nevada.
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