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Thursday, October 21, 2004

How to Avoid Long Distance Charges
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A microcosm of the demise of toll charges (and the access charges embedded within them) is an e-mail I just sent to my staff. I told them to call my virtual "202" VoIP number, which rings here in Denver and simultaneously on my mobile phone. Both of these are "720" Denver-located area codes. So now, any call from Washington to me reaching me on a Denver VoIP line or my Denver cell phone incurs no long distance toll charge.

From a cost and competition standpoint, this is a ho-hum point. I as a consumer am taking advantage of the competitive pressures in a declining cost industry to save money.

But wait. There is a hue and cry against this practice--regulatory arbitrage!! goes the epithet. Indeed, my old days as a regulator, if this were taking place wholly within the state of Colorado, we would have been petitioned to stop this practice as illegal "toll bridging," the practice of routing calls simply to avoid access charges. [Qwest to its credit has embraced a "no-access charge for VoIP" position.] From a regulatory perspective, this "toll bridging" is intolerable. It threatens a principal redistributive purpose of telephone rates.

This just goes to show how legacy regulation and its internal logic has ceased to have the individual consumer's interests at heart, but rather exists to preserve the prerogatives of a given set of consumers, usually in rural, high-cost areas (and, oh yes, it also persists to protect and perpetuate the interests of the regulatory class).

posted by Ray Gifford @ 9:38 AM | VoIP

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