Saturday, October 03, 2009

The Decline of America - long distance interconnect pricing

The NYT tells us a little bit about the games phone companies play to extract money from the crazed interconnect payment scheme
... some enterprising phone companies, aided by local regulators, have taken to encouraging entrepreneurs to set up businesses that attract lots of inbound calls. Those include the free conference calling services, free fax lines and telephone pornography. The phone companies rebate some of the high call termination fees they receive to the companies running these services...
So revenues generated from gaming the interconnect system can be used to subsidize phone porn to attract incoming calls and generate interconnect fees.

Now AT&T wants Google Voice to connect to these services so they have to pay up too.

Well, at least now we understand the business model for those flaky free fax send services.

This looks bad enough on the face of it, but, naturally, I think it's worse than it looks.

This kind of institutionalized lunacy is the kind of thing you expect to see in a senile nation. It's of the same cloth as medical bills that have little connection to value delivered or insurance payment received.

If we can't deal with this kind of crap, we ought to invite a more energetic nation to take over our operation.

1 comment:

Curmudgeon said...

Basically this is yet another case of regulatory capture. State-level phone regulators have become so captive to serving the interests of RBOCs that the former are actively helping the latter rip off other phone companies.

Regulatory capture is endemic in America but the list of countries where this kind of corruption is normal is growing rather than shrinking. Something's in decline and it's not just America; it's liberal civilization and the rule of law as we know it.