AT&T And Free Conferencing Are Facing Off As COVID-19, Primaries Boost Telecom Demands

As real-time developments in the US primary race and global COVID-19 response increase our need to remotely ‘stay in touch,’ the folks at FreeConferenceCall.com — one of the world’s oldest and most popular free-or-cheap conferencing platforms — say that AT&T, the world’s top telecom earner, won’t let customers dial in.

Following the release of a new FCC order last September, targeting methods for call-routing and what’s known as ‘access arbitrage,’ Free Conferencing Corporation says its US customers have seen unexpected charges or found that they’re unable to dial into or connect with the site’s conference lines, which host hundreds of millions of users in 190 countries, and roughly 30 million minutes of traffic per day.

Since the change went into effect this year, Verizon, T-Mobile, and Sprint users are able to call into Free Conference Call again, the company says, but AT&T users, who make up as much as a fifth of its US traffic, are still being shut out — a behavior that Free Conferencing Corp. calls “anti-competitive.” AT&T contends that the order duly targeted “traffic pumpers” like Free Conference Call, which it’s accused of “skewing the marketplace for legitimate voice services.”

Now, to understand this conflict, it’s necessary to know a bit about free conferencing services — known sometimes in pre-internet days as ‘chat lines’ — and the nature of phone bills and long-distance calls.

To connect callers in different cities and states, carriers have long relied on telephone exchanges (a.k.a. switching stations) and other analog- and digital-equipment in facilities all across the country to route, carry, and complete their customers’ calls.

Of course, not all phone exchanges or local providers see the same amount of traffic, so some businesses have sought to utilize the available ‘space’ on less-trafficked lines, generating revenue for those smaller operators (plus a small amount for themselves) while giving conference callers and low-income folks an option that’s low cost, and typically free.

That’s because, for nearly two decades, most carriers have offered large or unlimited packages of local and long-distance calls for a flat monthly fee, rather than charging by the call or the minute, making most US consumers’ calls effectively pre-paid (and making dial-in conference calls to states like Iowa or South Dakota no more expensive than a call next door).

For some years, certain rural exchanges were also getting a higher fee for routing calls than others in urban areas, or indeed in many other states — part of an ongoing range of government efforts to subsidize and support the build-out of infrastructure in especially isolated rural areas using smaller operators. In 2012, the FCC chose to eliminate that kind of fee (in keeping with changes to technology and the market), which is a change that free-conferencers probably wouldn’t have noticed, anyway, given their bundled monthly phone bill.

According to Free Conferencing Corp., AT&T openly stated that it doesn’t intend to connect these kinds of calls because it will no longer be using the lines that carry or complete them — not specific pieces of equipment, to be clear, but rather pathways through the vast network of infrastructure connecting US cities and states, which are owned, operated, and supported by thousands of different small operators.

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AT&T has argued that so-called “access stimulation” traffic, such as Free Conference Call generates, has been costing US consumers up to $80 million extra per year by targeting states or routes with higher fees, and been forcing consumers who don’t do much long-distance calling to subsidize free conferencers.

Free Conference Call disagrees, and says that AT&T isn’t being straightforward with its language or its numbers.

Regarding the $80 million sum, that works out to the rough cost “to connect 80 billion minutes of conferencing annually by the 75 million long distance subscribers who use these services (out of 455 million total in the U.S.),” Free Conference Call estimated on a new website about this issue, which inspired more than 100,000 comments to regulators back in January within a few days of notifying users. “Following these assumptions, the total cost to AT&T for connecting customers to free conference calling services accounts for less than .1% of its annual costs.”

Regarding the estimated $0.09 cost per AT&T user per month to ‘subsidize’ heavier phone-users (like people old enough to have started on landlines), the new site states: “[That] cost is negligible, and the entire modern telecommunications structure—and [AT&T’s] own business setup—is rife with implicit subsidies.”

Free Conference Call CFO and COO Scott Southron pointed out in a phone interview that ‘access fees’ were eliminated nationwide, too. And today, he said, the other fees charged by intermediary carriers and competing local exchange carriers (CLECs) to carry or complete calls to Iowa and South Dakota are close to the national average.

Following the new FCC order, the company relocated all of its Iowa traffic, anyway, because its three partner CLECs were worried about complying, Southron said: under the terms of that order, AT&T and other companies can reverse the cost of call transit or completion fees generated by “access stimulation” calls back onto those small operators. The company now mostly handles its traffic in Miami, Chicago, Long Beach, and South Dakota, among other places.

Dave Erickson, CEO of Free Conferencing Corp. and the original founder of FreeConferenceCall.com in 2001 (an address that was just sitting there, Erickson says), commented in a phone interview that AT&T and other companies “pretty much got everything they want” after pushing for that FCC order. “We knew it would have dire consequences for our users and business, and tried to get the FCC to give us more time. AT&T and the FCC didn’t think it warranted any more time, and now AT&T has not been able to make the changes that we have made in the time allotted.”

But most importantly, he said, “The order they put out allows [AT&T] to reverse charges onto the person receiving the call, but it doesn’t give them they ability to block or not complete a call, and that’s what they’re doing today.” And in fact, completing calls is something carriers are fundamentally required to do.

“The whole idea behind one pillar of the federal Telecommunications Act, back in the day, is that AT&T has to complete calls to the competition or else there will be no competition,” Erickson said. But complaints to FCC haven’t been answered, he said, despite the fact that the need for reliable ‘chat lines’ seems to be rising.

In the past week, for example, officials at the CDC have issued advice to substitute teleconferences for business travel due to COVID-19 health concerns, and even specifically reached out to Free Conference Call to coordinate service. The company also reported a 167% increase in sign-ups from January to February among Italian users, “which anecdotally aligns with the detection and virus infection rates in that country as the epicenter of the spread in Europe,” they said.

The month before that, a primary caucus in heavily rural Iowa faced difficulties not just with their app, but their phones: as the Des Moines Register reported in early February, these were “inundated with outside calls,” including Trump supporters, impatient citizens, and apparently users of 4chan, where the party’s hotline number and instructions to “clog the lines” had been posted.

And since January, Free Conference Call says, internal data continue to show that up to 20% of their US calls — AT&T’s portion — still aren’t going through.

“The FCC is very duplicitous here,” Erickson said. “They talk about completion issues and improvement, rural call completion issues. If AT&T is not completing calls for the second-largest audio conference company in the world, and they’re the third largest… that sounds like anti-competitive behavior to me.”

Southron said that AT&T’s ‘problem’ with Free Conference Call seems to be “with the business itself” — its whole model, in other words. “We can survive on what are now fractions of a penny per minute, we have our own infrastructure. AT&T still needs to charge organizer fees and so on, and cost more to consumers,” he explained.

“Our goal long-term, really, is to find cheaper ways for [telecom] partners to connect people. We believe the fees we’re being charged are fair and correct,” Southron said. “We’ve been around for 18 years, we now do well over a billion minutes of traffic a month, and we’ve been building innovation and infrastructure all of that time.”

Requests for comment from the FCC were not returned. Requests for additional comment from AT&T were not returned.

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In summary, it could be said that the whole free-conferencing model has traditionally relied on “legally exploiting an FCC loophole that provided a useful service to a lot of folks and smaller companies,” as technology journalist Karl Bode put it in an email.

Which, all things considered, seems fairly harmless to Bode, after years of following news from the FCC and from giants like AT&T, whose US legacy makes it unique (and largest) among today’s “Big Four” US companies, soon to be Three.

“I will say that whenever I see AT&T accusing somebody else of malicious or fraudulent behavior, I think of the numerous instances in which AT&T has engaged in far worse behavior. Like that time they got caught actually making customer bills harder to understand to hide ‘cramming’ charges,” Bode wrote. “Or the time they got caught letting drug dealers run directory assistance scams. Or when they got caught turning a blind eye to scammers defrauding the IP relay system for the hearing impaired, because they got paid for fraudulent calls anyway.”

When it comes to how US regulators have intervened in carriers’ conflicts with other parties, or addressing legal loopholes, Bode commented, “I think this FCC’s actions have made it pretty clear its priority is to protect the revenues of the biggest US telecom providers.”

“As last week’s fines for selling user location data show, when the [FCC or FTC] does act, the penalties are usually a tiny overall fraction of the money companies like AT&T make from the behavior … in part because as a company that’s politically powerful and tied to the nation’s intelligence-gathering and first responder apparatus, there’s usually not much political incentive to try and hold AT&T accountable,” Bode continued.

He added, “Of all the issues currently facing the FCC, shutting down a loophole that provided a useful service to many consumers seems like the least of our collective problems.”