IPO: ITU Allows Ban on Callback Providers

[Dave Farber <farber () central cis upenn edu>]

Now why did I expect this. Rather than give up their very large profits the
Telecom industry would rather ban competition djf




Discount Calling By World Telecommunications Body


By ELIZABETH OLSON


Associated Press Writer


GENEVA (AP) -- The International Telecommunications Union Friday dealt
a blow to the huge discount calling industry, declaring that countries
have the right to outlaw such services.


Discount calling, or `call back,' allows callers overseas to save on
phone calls by using a U.S. phone line to telephone home. This skirts
the far more expensive charges of foreign government-owned phone
monopolies.


Call back's popularity has boomed, generating an estimated $500
million market annually. The ITU predicts the market will be worth
about $1.2 billion by 1998.


The ITU's governing body agreed that any country could bar the
call-back service. The resolution, on behalf of the 185-member body,
took effect Friday.


A total of 25 countries protested against call-back services. They
include: Algeria, Bahrain, Belarus, Burundi, China, Columbia,
Djibouti, Egypt, Ecuador, Honduras, Kazakstan, Kenya, Kyrgyzstan,
Kuwait, Latvia, Malaysia, Morocco, Niger, Uganda, Portugal, Qatar,
Thailand, Turkey, Vietnam and Yemen.


Most opposing countries argued that such alternative calling services
strip them of a major source of revenue.


"In developing countries, including many African countries, some 60 to
70 percent of total revenues from international telephone traffic come
from outgoing calls," said Bernard Rouxeville, chairman of ITU's
Telecommunications Standardization Bureau.


The main issue, he insisted, was quality of service. Some call-back
services employ constant dialing or answer suppression functions that
hamper the performance of publicly owned telephone networks, the ITU
resolution noted.


Rouxeville said most European countries did not object to the
competition posed by call-back services because they face phone
industry deregulation next year.  National phone monopolies, including
France, already have made deep cuts in calling rates to the United
States.


Prohibiting call-back services can be done by enacting laws, adopting
regulations or barring marketing and advertising efforts, Rouxeville
said. He is employed by the French Ministry for Industry.


Critics complain government phone charges are too high and call-back
services provide necessary competition to keep prices reasonable.


About two dozen, mostly American, call-back companies dominate the
industry.  They employ a twist on the oft-used method of calling home
collect. The call is refused, then the family member or friend returns
the call, using the cheaper, direct-dial service.


Using call back, a subscriber dials his company's U.S. phone system,
lets it ring once and hangs up. The call-back service's computer dials
back and provides a U.S. telephone line connection to the subscriber,
which bypasses the foreign phone company.




Van Hefner - Editor
Discount Long Distance Digest
The Internet Journal of the Long Distance Industry
http://www.webcom.com/longdist/