Comment by josh2600 | Hacker News Reader

Comment by josh2600 | Hacker News Reader

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A quick note on how the conference calling industry actually works...

1) Most BIG conference calling companies are registered as competitive local exchange carriers.

2) As CLECs, these companies get to charge for inbound traffic.

3) Charge customers per minute in addition for insane profit.

Companies like FreeConferenceCall.com are basically ignoring the subscriber revenue in exchange for only the inbound tariff (that's their industry disruption).

Example: I setup a conference call bridge on FreeConferenceCall.com and I call in. One other person joins me. I call in on my cellphone and so does the other person. Neither one of us pays for long distance so we don't care, but on the backend, FreeConferenceCall.com is billing our cell providers $.30 per minute.

That's the reason GoogleVoice blocks those numbers, because Google is already eating $.004/min for US numbers, they can't afford to eat calls that cost $.30/min; that's nuts.

This is the same business model that powers MagicJack as well. Just a quick FYI. Paying people for inbound minutes is only for folks that don't have enough volume to get a CLEC-level agreement (you can get CLECs to sell you inbound for $0 or even to pay you for the traffic if you have enough volume). The beauty of Twilio's business model is that they get all of the aggregation benefits of your traffic.

Does that help?

Edit: Also the comment I'm replying to has a ton of great advice!

This practice of creating a lot of traffic on rural lines is known as traffic pumping. AFAIK the FCC has closed this loophole, stating that termination fees may not be collected for VOIP calls. IIRC this new rule will take effect in 2014.

BTW, FreeConferenceCalls know their model is doomed and are expanding as fast as they can into countries with phone systems modeled after the US one, where the loophole still persists. It's pretty clear, though, that their business isn't sustainable. My guess is that somebody will soon gobble up FreeConferenceCall for their customer database.

I always bet on Intercall when it comes to audioconferencing consolidation.

The real question is: Who's gonna get more spam, The old Acme Packet customers who are now getting spammed by Oracle or the soon-to-be-potentially-sold FreeConferenceCall.com clients?

Whoa, the US market is strange - Australians only pay for outbound minutes (mostly).

You have no idea. When I first came in it was a common practice to bounce calls up to Canada because the intercountry rate was better than interstate.

Can you elaborate here? ;)

Not much more to say. At one point it was much cheaper to proxy media to Canada and back into the US than it was to route it straight state to state.

It has to do with treaties and international tariffs versus state to state. When you hit a certain scale, say Verizon scale, you get to have your traffic carried for free by the other major telcos. It's all a volume game.

In short, people without volume maximize the rules of the system in order to increase their margins. One such method was to pretend calls were coming in from Canada when they were actually state to state.

Another odd fact: Calls Intra-state (from one county to another) are just about universally more expensive than calls Inter-state. The reason is, when you call out of the state, more often than not, someone is paying for receiving that call, but when you call intra-state all of the cost is born by the local operator.

Cute, right?

there are also some further strange things in the US voip marketing. e.g. routing calls through specific states to get some grants,...

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