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Posted: Apparently this is a clip from the NYTimes article. But I know nothing.
October 19, 2006 From the Desk of David Pogue The Final Word on Futurephone By DAVID POGUE By now, you might be sick of hearing about Futurephone, the company I recently profiled in my blog because it offers totally free international phone calls to over 50 countries. No signup, no fees, no surrendering your name or address. Man, we're a cynical bunch these days. Very few of you were persuaded that Futurephone's business plan is what its chief executive says it is: "to build up the company's brand-name recognition. Our plan is to offer additional services in the future." Last week, I attempted to shoot down some of the sillier explanations of Futurephone's real game -- the ones where readers speculated that the company is going to harvest its customers' phone numbers (why? -- isn't the phone book much more convenient?) or listen in to the calls (wayyyy too boring to be plausible). This week, several of you suggested that Futurephone's actual business plan is far more complicated -- and far more plausible. If it's true, it's incredibly clever. In his blog for example, Alec Saunders explains this game of telecom arbitrage like this: "Ever wonder why it is that FuturePhone, Radio Handi, FreeConferenceCall, and PartyLine Connect all have access numbers in the 712 area code? These services all provide 'free' services to you. There's 'no catch.' You just have to make a long distance call to get them. "So how do these services get paid, and why are the access numbers all in Iowa? The short answer is tax subsidies." He goes on to explain that our government gives the states money to help them with maintenance and improvements to local telephone plants. There's also an invisible tariff involved, amounting to three cents per minute collected by the *terminating* phone company. Alec speculates that Futurephone is performing a sort of tariff arbitrage. "Let's take FuturePhone as an example...All you have to do is call 712 858 8883 (a number provided by the tiny Superior Telephone Coop in Estherville, Iowa), and then enter the international call you want to make using the standard 011 prefix. "So how do they make money? ... Say that FuturePhone's cost to terminate the call is 1.25 cents. That leaves 1.75 cents per minute to split with the folks at Superior Telephone Coop. Give them half, which leaves you 0.875 cents per minute, and you've got a pretty attractive proposition ... Everybody wins! The good citizens of Iowa win (they've now got a fiber network joining up 150 of their independently owned telcos), FuturePhone has a seemingly profitable business model, and you win by getting cheap overseas calls." Now, Alec goes on to imply that this plan is sneaky and that somehow you wind up shouldering the burden. Me, I don't see anything wrong with it. The Futurephone guy and his fellow Iowans have stumbled upon a clever scheme, if they are indeed using this arbitrage ploy. It's perfectly legal, and does, in fact, win us free overseas calls. (Alec ignores, for example, the fact that many people have cellphones or home phones with unlimited long distance for a fixed price. For us, these international calls are really, truly free.) So is that what Futurephone is doing? I asked Futurephone's Tom Doolin point-blank this week. All he'll say in response is that, "Our company is private and we do not disclose proprietary or confidential information." But he did note that the company is now "actively pursuing potential advertising sponsors." That's a new bit of information, which I found explained in more detail on an ABC News Web article. "They'll listen to a 10-second commercial if they can make a free call," Mr. Doolin told ABC News. "In the middle of next year you might see something like that." (He also, by the way, stressed that, "In response to your follow-up on personal privacy, let me assure you that Futurephone.com does not record people's telephone conversations.") For now, I think a lot of the commenters and bloggers are being too cynical. My own reaction is much more along the lines of this reader's comment: "It WORKS! I just called a relative in a small town in Greece from my cell phone and was connected immediately. (I have never been able to call using my cell phone before.) "To those who think that Big Brother is monitoring the calls: if they are the least bit interested in my conversation -- in Greek -- with an 86-year-old aunt, so be it; you just saved me $50-$100 a month!"
Well, shall we go? Yes, let's go. [They do not move.]
alien_oddityCarpal \'Tunnel 7,193 posts Location: in the trees
Posted: are you getting comissions on sales or something NYC
Dr_MollyPooh-Bah 2,354 posts Location: Away from home
Posted: No, he just has a vested interest in being able to make long distance calls cheaply
Posted: if it works then its cool.......i guess the technology would just be similar to skype and VoIP stuff. the thing is there is wisdom in the saying "there is no such thing as a free lunch"........
Posted: Well a little research and teting has revealed that it works fine from my ladies US Cell to my UK landline, but when trying to call my UK mobile it claims that the country is not supported (number definitely correct).
It will be cheaper for Ali to use the service and add long distance calls so even for this, I'm grateful
As for trusting the service- something for almost nothing, no trust, no question.