Users of FreeConference.Com, a Web-based service that offers long-distance conference calling for the price of a single long-distance call, found itself cut off last week, as AT&T/Cingular, Sprint, and Qwest began blocking subscriber access to the service.

 

Consumer advocates were quick to denounce the companies' action. PennPIRG's Beth McConnell called it "a corporation's financial interests limiting consumer choice and access to legitimate, publicly available services."

FreeConference.Com enables a caller to set up a conference call for the price of a single long-distance call to Iowa or Minnesota, and then receive a call-in access number that up to 95 other callers can use for a conference.

The company's service has been popular with not-profits and small businesses that have employees in multiple states, but AT&T; was incensed at what it saw as violation of its terms of service. AT&T; spokesperson Mark Siegel said that AT&T;'s wireless service is for calls "between one person and another person, not between one person and many."

But FreeConference.Com CEO Alex Cory said AT&T; was simply trying to push conference callers back to its own 800-number calling service and thereby reap more profit.

"Who dominates 800-service? That would be AT&T;," Cory said on the gigaom.com blog. "If free conferencing were eliminated, what would people do? Go back to 800-service conferencing."

Some blog readers commented that they could still utilize the service, and both sides confirmed that as AT&T; found and blocked numbers using FreeConference, the latter created new numbers for subscribers, thus getting around AT&T;'s efforts to block them.

"This is an unpleasant bump in the road for us, but does not threaten our service. We are offering alternative numbers to affected customers and business is continuing as usual," Cory said.

Termination Fees

The root of the dispute is the termination fees large telecom companies pay to small rural carriers to foot development of telecom service in low-population areas. Services such as FreeConference.com can set up agreements to drive services to the smaller carriers and bring them more money, while the major telecoms pay the bill. AT&T; claims such moves are fraudulent and has sued a similar service, FuturePhone, in an attempt to recoup its losses.

Qwest, the local phone company in much of the West, also filed suit against FreeConference.com and FuturePhone, claiming that "untoward" and "inappropriate" traffic brought by the services and others like it cost it upwards of $10 to $15 million.

Given that AT&T; and Verizon both sought relief from paying into the Universal Service Fund -- specifically designated to pay for development of telecom services to rural areas -- and then promptly tried to institute "regulatory cost" charges that went directly to telecom coffers, observers of the latest dust-up were not convinced that AT&T;'s motives were altrustic.

A writer for the TechDirt blog said that, "The problem isn't with these services, but the bad regulations that allowed the small telcos to charge crazy termination fees in the first place. If the big telcos have a problem with it, they should take it up with whoever put those laws in place."

Net Neutrality, Privacy, And Telco Control

The FreeConference.com issue also demonstrates to some the need for telephone regulations that, like "net neutrality" principles on the Web, prevent telephone carriers from discriminating against services they dislike. If telecoms like AT&T; can shut off access to phone services any time it likes, they reason, what's to stop it from doing the same to Internet services?

AT&T; had agreed to maintain a principle of net neutrality for its basic Internet services as a condition of the megamerger with BellSouth, but observers noted the agreement might not apply to its Internet-over-TV offerings such as Uverse, which AT&T; is banking on to deliver it millions in new revenue.

Telecom-friendly FCC chair Kevin Martin had also intimated that he would not push for enforcement of the net neutrality concession, a move that put him on the hot seat during a recent Congressional hearing into FCC activity. Democrats accused Martin, a Republican, of showing excessive favoritism -- as opposed to run-of-the-mill favoritism -- to business interests over consumers and not aggressively investigating issues such as the NSA's accessing domestic phone records of millions of Americans with AT&T;'s help.

AT&T; was a prime mover in the NSA's plans, and has aggressively fought a multitude of lawsuits and inquiries into the level of its involvement with the NSA program, with both AT&T; and the government claiming that the requests for information could cause harm to national security. In San Francisco, Judge Vaughn Walker recently ruled that the Electronic Frontier Foundation (EFF) could proceed in its case against AT&T;, though he ruled that documents related to the case would have to stay sealed for the time being.

Critics charged the FreeConference.Com dispute, the NSA spy case, and the ongoing net neutrality issue all demonstrate the clear imbalance of power telecom incumbents enjoy -- the ability to shut off services at will and block inquiries into unscrupulous practices. When there are so few players -- now largely unregulated -- in the telecom market, it's not so easy to simply take your business elsewhere, they noted.

"That Cingular (AT&T;), Qwest, and Sprint have decided that they can use access to networks as leverage in a business dispute is scary," wrote Aaron Barlow for ePluribus Media. "[N]ot because we are helpless and unable to find alternatives, but because their mindset could be applied to other networks, completely undermining the confidence we have developed in the system of networks that underlies not only this nation but the world."