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Summary:

Unlike some of the free-calling concerns who folded their tents at the first sign of legal pressure, FreeConference.com is going to fight for its rights, shown in part by its filing of an antitrust lawsuit against AT&T. The lawsuit, filed last Friday in the U.S. District […]

legal-courts.jpgUnlike some of the free-calling concerns who folded their tents at the first sign of legal pressure, FreeConference.com is going to fight for its rights, shown in part by its filing of an antitrust lawsuit against AT&T.

The lawsuit, filed last Friday in the U.S. District Court in Washington, D.C., mainly asks the court to immediately order AT&T to stop blocking calls from its wireless subscribers to FreeConference.com’s access numbers. The blocking of calls, which AT&T says is permissible under its terms of service agreements, has caused no small amount of controversy and seems headed for an eventual debate at the FCC.

Recognizing, however, that the deliberative process might take more time than they can afford, FreeConference.com went ahead seeking the injunction, which it claims is necessary due to AT&T’s alleged infractions of antitrust law as well as the Communications Act. As its suit says:

Plaintiff seeks injunctive relief in part because there is no adequate remedy at law to prevent the imminent destruction of FreeConference’s business and reputation on account of AT&T’s unlawful self-help and unilateral refusal to deal with FreeConference’s customers…

Several of the Internet-based free-calling operations, including FuturePhone and FonPods, went offline after becoming the focus of pressure from AT&T lawsuits. FreeConference.com, however, is showing more resiliency, both in comments from CEO Alex Cory on previous posts and on the company’s website, where it has a FAQ page detailing its side of the issue.

Cory was not available Tuesday to comment on the lawsuit. , and AT&T representatives have not yet responded to a request for comments. UPDATE: AT&T spokesperson Michael Balmoris has this to say about the lawsuit:

Their legal claims are baseless and their attempt to portray their fraudulent service as “free” is a sham. There is no such thing as a free lunch, and consumers and business customers are the ones who will be left holding the bag if these types of scams are allowed to continue.

According to FreeConference, AT&T has 60 days to respond to the lawsuit.

UPDATE #2: FreeConference CEO Alex Cory adds this comment:

We offer customers a free conferencing service. The “sham” here is the story from Cingular/AT&T that they are paying excessive termination fees without mentioning that they are receiving long distance revenues for placing these calls. Our customers tell us they are paying Cingular a rate of 10 cents a minute if they stay within their allowed minutes, and
40 cents a minute if they go over. The rural telcos running free conferencing services are collecting about 4 cents per minute on average in publicly filed termination fees. AT&T should not be selectively blocking a call that a customer has paid for and should not be hiding
behind the false story that these are costs for which they don’t collect offsetting revenues.

  1. Nice to see someone with the gumption (O.K.; and the money) to take on ATT. Success would of course help all those in this space…with nice benefits accruing to the public.

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  2. It’s a gamble worth taking as long as FreeConference has the resources to go the long run.

    I have seen a similar situation in another country and the smaller guy prevailed…so there is hope.

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  3. It’s a shame that the FCC has Martin as a Chairman, otherwise it might have had the stones to tell AT&T (and the other ILECs) to step down. Not even a peep from the FCC. It might be time just to abolish that Agency. It isn’t helping consumers at all.

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  4. It has been reported that Sprint is blocking free conference services from cellphones and landlines.

    Please put a stop to this unfair practice. It is killing my business. Of course paying $0.25 per minute per caller would kill my business also.

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  5. What FreeConference is doing is legal, and what AT&T is doing is wrong and illegal. However, FreeConference and the others are taking advantage of regulations in a completely unintended way. Those subsidies are supposed to be for connecting rural residents, not subsidizing calls of people who live outside the rural area. Corporate welfare is corporate welfare, even if the little guy is doing it.

    The FCC Commissioners haven’t stepped in yet because no one has filed a formal complaint. There is a proposal currently making its way through the FCC that would reform termination fees by instituting a process of competitive bidding for local phone service in these areas. Companies would bid on the contract in terms of the termination fees that they would accept, and the lowest bidder would win the contract.

    It’s an idea that has some chance of settling this dispute about whether the termination charges are excessive, and finding a better way to set the proper charges.

    I strongly, strongly, feel that AT&T and the other companies should not be able to block these calls. It’s one of the worst possible things for the phone network, and prevents legitimate arbitrage. But I can’t really support the other companies taking advantage of the regulation and getting corporate welfare, even if it’s legal. Reform is needed.

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  6. UPDATE: AT&T has now commented (see post update, above).

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  7. Am I the only one that knows that FonPods went back online a while ago under a new domain:

    http://www.phonepods.com/

    They’re still using the same access lines, though.

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  8. AT&T has no basis for what it says, “free is a sham” HMMM Free nights and weekends ring a bell? Every time one of these guys opens their mouth they put their foot in it. First Cingular says “person to person calls only” guess you can’t use your voicemail. Now this?
    This is a classic Monopoly that is trying to push people out of the business and put money in their pocket.
    Ask them if they ever hosted 900 services? Who makes the most money from that?

    Some folks are wise and some are otherwise.
    Tobias Smollett

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  9. John has it right. The LEC’s that are providing local numbers to be used in these free calling “businesses” are taking advantage of older termination agreements that are heavily weighted in favor of rural providers. The rural LEC’s are keeping some percentage of the reciprical compensation and passing the rest on to the “free whatever” business. Any LEC that sets up a deal like this understands that they are violating the sprint of the agreement. I’ve seen 10 different versions of free calling/reciprical compensation over the years. In my opinion, none of them are ethical. And, none of them last longer than it takes to modify the compensation regulations (or until their contracts run out and they find that no one will provide them service). As far as reform goes, it appears that AT&T’s position is that the Terms and Conditions of the existing agreements allow them to deny service if there is intensional abuse…this is standard operational proceedure.
    If I give you a “drink” of water it doesn’t mean you can suck the well dry providing “free” water to everyone you know, and then bitch because I turned off my faucet. These guys are exploiting loopholes to make themselves rich at everybody else’s expense.

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  10. Phonepods.com is apparently an old site… numbers don’t work anymore.

    also: FreeConference CEO Alex Cory has added his comments, we put them in the original post.

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