AllFreeCalls shuts down service

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?”

See also:

6 Responses to “AllFreeCalls shuts down service”

  1. 1 jim Feb 17th, 2007 at 8:11 am

    It was nice while it lasted!

  2. 2 Clem Feb 18th, 2007 at 10:19 am

    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!!

  3. 3 Yan Feb 18th, 2007 at 4:58 pm

    Clem: I agree with you. This is from comments to that post by Alec Saunders:

    In the 1980’s, AT&T was doing the same thing, i.e. selling sex phone calls to gay guys in the USA who wished to ‘Reach Out and Touch a New Friend’ but could not afford to do so 900-number style. And AT&T was always quick to point out, “NO PREMIUM CHARGE FOR THESE CALLS. YOU ONLY PAY INTERNATIONAL TOLL RATES”, to Guyana, South America, Brazil, or Africa or wherever the balance of payments on telephone arbitrage was the most out of whack (in AT&T’s favor).

  4. 4 Pat Phean Feb 19th, 2007 at 12:04 pm

    allfreecalls will be back either late tonight or early tomorrow

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