IPUrbia

As has been reported before, AT&T has been pursuing legal action against rural ILECS in Iowa and and their partnering voice service providers for fraudulent activities. As a little bit of background, a handful of rural ILECS who are entitled to higher than average termination costs (5-10 cents a minute) have partnered with voip companies who provide services ranging from free conferencing to free international calls. The idea is that, since the termination rates are higher than the the cost of doing business, there is a lot of room to get some good revenue. It’s all in good fun, and thrifty consumers have loved the services. AT&T, on the other hand, has been less thrilled with the concept since they have been footing the bill to the tune of several million dollars. They’ve been aggressively filing lawsuits, claiming fraud and arguing that, since the calls are forwarded onto international destinations via VOIP, they don’t qualify as “terminated”.

The Iowa telcos, however, aren’t just rolling over. AT&T has been withholding payments and has racked up over 10 million dollars worth of termination charges, and the small-town farming community telcos have enlisted a top-notch Beltway law firm to defend them.

It’s a tough dilemma for me. Personally, I’ve never liked AT&T (or any large telco company) in anything related to billing, both from personal and professional experience. They act unilaterally and generally act contrary to responsible business practices and, dare I say, common ethics. On the other hand, the Iowa ILECS and their voip partners are clearly gaming the system in a way that is patently unfair business practices itself. It’s not a sustainable model–at a large enough scale, any major voice provider would go bankrupt funding these “free” calling ventures. In the end, I think the law should be reformed–but, AT&T should still be responsible for past and current charges. After all, what goes around comes around, and AT&T deserves a taste of their own bitter medicine every now and then.