You might remember AllFreeCalls, the company I reviewed in January. They offered free international calls to a number of countries by taking advantage of a loophole in the complex laws regulating telcos.
Guess what, AT&T didn’t like the bill they had to foot for all those calls to Iowa and they sued AllFreeCalls, FuturePhone, and a number of other startups profiting from the scheme.
Filed in the U.S. District Court for the Southern District of Iowa, Central Division, AT&T’s lawsuit seeks to stop FuturePhone as well as the telcos who provide local infrastructure from continuing with their operations that use regulatory-fee arbitrage and VoIP to provide international calls for only the price of a long-distance call to Iowa.
According to the company blog, AffFreeCalls is still fighting to get back in business while FuturePhone has already put up a big red “service not available” sign on their website.
I always thought it was a matter of time before these startups attract enough attention and the loophole is closed. For any idea to work it has to make sense and I just don’t see how a business like this could survive for long.
Oh well, easy come, easy go. We still have plenty of other alternatives with more solid business plans, and I am sure they will not evaporate overnight. ;-)
To find more about why it worked when it did read this detailed investigation from Alec Saunders: “What’s With the 712 Area Code?”
It was nice while it lasted!
I don’t think this is the end of these programs. AT&T’s main contention is that the calls do not terminate in Iowa. If they don’t then all of there prepaid call programs have been improperly charging customers for years. better get out there check book!!
Clem: I agree with you. This is from comments to that post by Alec Saunders:
Yan
allfreecalls will be back either late tonight or early tomorrow