futurephone & iowa telcos

Here’s what was said on October 9th, on Lifehacker.com about the Futurephone service:

Make free international phone calls sans Skype with Futurephone, a company that’s just got to be bleeding money.

The service doesn’t run ads or ask for personal information. They simply provide an access number based in Iowa – so domestic long distance charges apply – that you call with any old phone and then dial your international number through.

Nobody could figure out exactly how Futurephone.com was making money. At first.

Check out the February 7th, 2007 entry on Gigaom.com:

Guess who got stuck with a big bill for all those “free” international calls touted by outfits like FuturePhone? None other than AT&T, which has filed a lawsuit in Iowa claiming that “deceitful and unlawful schemes” like FuturePhone’s caused a jump from $2,000 per month to $2 million per month in the fees billed AT&T by an Iowa rural telco.

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.

And feel free to look through the rest of the entries on this case at Gigaom.