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IPO: ITU Allows Ban on Callback Providers
From: Dave Farber <farber () central cis upenn edu>
Date: Fri, 05 Jul 1996 15:51:27 -0400
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/
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- IPO: ITU Allows Ban on Callback Providers Dave Farber (Jul 05)