AT&T Ripoff - comments continued

A commenter on my recent post on AT&T overcharging asks how I know that the wholesale cost of termination in the US is less than a penny per minute.  He claims I'm  "just speculating."

I'm not speculating but it's fair question.  I founded and was CEO of voice wholesaler ITXC Corp until it merged with Teleglobe in 2004.  Sometime in 2003 the price we CHARGED our wholesale customers for US termination (these prices are very competitive) went under one cent per minute.  It has gone down since.  That's why Skype can provide RETAIL US termination at 2 euro cents and its competitors even less.

I also know from experience that the allocated cost of IP transport for VoIP - even to and from Iraq - is far less than one cent.  In fact, competitive PSTN rates for transport have also fallen precipitously and are probably also less than a penny but I don't know this directly.

I mentioned that the IP available to solders is apparently not good enough for VoIP.  This is a problem with the last mile connection - not the IP backbone to and from Iraq.  Plenty of websites in Iraq work fine (when there's power).  AT&T knows how to access this backbone.

Since it has a monopoly, it has a responsibility to either provide the competitive rates itself or not block those who are willing to provide better rates.  I have not said and don't believe that AT&T has to subsidize these calls or even forgo a reasonable profit.

But I should have said how I know what I asserted.  Good comment.

Comments

[Abby]

Could you please explain a bit how this works. In my retail experience of telco, I've always found taht calls originating in the US were cheaper, especially with phone cards.

It is much cheaper for me to call my parents in St. Vincent than it is for anyone in St. Vincent to call the U.S. It's also true that the landline business there is a complete monopoly for several more years. (Luckily teh Supreme Court of the Eastern Caribbean ruled that the monopoloy grant did not extend to cellular providers, so cell phone companies are allowed to compete and may bring rates down.

It may be that rates are refulated all over, but I've had similar experiences dialing the UK. I've been trying to price calls between the US and Kiev, where my sister is a peace corps volunteer, and I haven't quite figured out the best service, although it seems pretty reasonable in both directions.

[Patrizia Broghammer]

I would expect that the price of the telephone call the troups in Iraq have to pay is 0 cent per minute.
It is the minimum in my opinion their own country should provide to people that risk their life every day:the possibility to call home for free.

Patrizia