How do “Free Conference Calls” work?

“Free conference calling” is a scam to rip off the Universal Service Fund.

The telecommunications act of 1936 laid down the principle that having access to a telephone line is a basic civil right that must be priced so it is available to almost everyone, everywhere in the continental United States.

To make that happen, it was decided that the small cooperative rural telephone companies would receive various subsidies from the Universal Service Fund, which gets its money from a small tax on all telephone subscribers (you will find it on your phone bill as a separate line item).

In the restructuring of telephone companies after the breakup of AT&T, it was decided that the rural telephone companies could charge a higher rate for calls delivered to them from the long distance telephone companies. This created an incentive for them to attract high volumes of calls. Some enterprising people invented the “free conference call”.

The “free” call costs as much as 22 cents per minute. The calls typically do not even make it to the physical location of the rural exchange; they are picked off at a large switching center closer to the backbone of the network. The scammers rely on the obscurity of the accounting – that it is hard to explain how these specific calls are different from other calls. Most mobile telephone companies have started blocking these numbers.

The proposed rule says if the end users insists on calling these numbers, they can be billed for the cost of the call. Makes sense to me.

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