Speakeasy Latest VoIP Provider to Block Calls, Thumb Nose at FCC

ISP and VoIP provider Speakeasy is following MagicJack and Google Voice in blocking calls to rural areas, and may be violating FCC regulations in doing so.

Harold Feld at Wetmachine.com posted an email on Oct. 1, sent by Michael Czerwinski, VP of Customer Service at Speakeasy, informing users of the update to the Terms of Service. The email explains that certain numbers are being blocked, such as those from “adult lines” and “free conferencing” services that charge extra fees for connecting to them. Andy Kill of the public relations firm Airfoil, of whom Speakeasy is a client, confirmed this with Teknocratix via email.

Why are VoIP providers blocking these calls? Because rural phone carriers are legally allowed to charge much more than other telcos, phone-based businesses often setup shop in these areas to take advantage. National carriers who offer flat rates, like AT&T are often stuck with the bill, which could be as high as $250 million a year. AT&T has publicly complained about the practice, and while the Federal Communications Commission has taken action to curb the practice, known as “traffic pumping,” rural service providers have so far been able to dodge the constraints.

However, according to a 2007 decision by the FCC, phone companies cannot just block these calls, presumably due to the common carrier status they enjoy. When a service provider is considered a common carrier, basically that means that they cannot be held legally responsible for what their customers do with the service, so long as the provider doesn’t selectively interfere. For example, if someone calls in a bomb threat to a school, AT&T could not be held liable.

While the FCC is quite firm on its call-blocking stance in regards to traditional telcos, VoIP is still a gray area. So far, the FCC has been rather selective as to what rules apply to VoIP providers, such as ordering them to offer E911 service in 2005.

AT&T has recently cried foul over Google Voice’s blocking of rural telephone numbers, but Google counters that it is not technically a phone service. And technically, it isn’t. Rather, Voice is an invite-only call forwarding and voicemail service.

Regardless, this is a growing trend among VoIP providers, Google Voice included, and Speakeasy’s actions could well be what causes the FCC to intervene.

Here’s a copy of the email sent to Speakeasy subscribers:

From: “support@speakeasy.net?? support@speakeasy.net??”
Date: 29 Sep 2009 00:05:21 -0000
To: XXXXXXXXX
Subject: [ Speakeasy ] Update to the Speakeasy Terms of Service
Dear Valued Speakeasy Customer,

At Speakeasy, we strive to improve the value of our services and maintain the best customer experience in the industry. To that end, effective today, we are modifying our voice terms of service as follows:

a) Speakeasy will disallow voice traffic to a few selected area and prefix codes (“NPA-NXX”) in North America. Operators of services such as adult lines and “free conferencing” are using these local area codes and are causing additional fees. Instead of passing on these fees to you, we have chosen to maintain the most competitive rates possible by implementing this policy.

b) In addition, we are clarifying our non-standard use clause and will be extending additional options to these specific customers affected.

Speakeasy has made both of these modifications to our Terms of Service in order to better serve you, our customer. These changes are effective immediately. A complete copy of the Speakeasy Master Service Agreement with these changes can be viewed at http://www.speakeasy.net/tos/. Please contact our team at (800) 556-5829 if you have any questions.

Regards,

Michael Czerwinski
Vice President Customer Service

And here is Speakeasy’s statement on blocking calls, provided by Airfoil’s Andy Kill:

In the best interest of our customers, Speakeasy has made changes to its terms of service to address a growing trend, whereby certain phone services have engaged in customer deception. These companies, mostly in the adult services industry, advertise free calling rates to the customer, and then charge the customer’s service provider more than 10-15 times the standard per minute rate, even under an otherwise unlimited calling plan.

This practice, known as “traffic pumping,” is an issue all VoIP providers are dealing with, leaving them with three options: charge the individual customers who believed they were making a free call, raise all their customers’ rates to absorb the costs, or choose not to connect calls to these services. Rather than impact our customers monetarily, Speakeasy has made the decision, within its legal rights, not to connect these calls.

In an effort to remain transparent with our customers, we have changed our terms of service to clearly indicate these blocked numbers, and have, in compliance with our terms of service, notified them of that change. Our intent is not to restrict customer calls, but to protect them from abusive, high cost providers. Any Speakeasy VoIP customer negatively affected by this decision should call us at 1-800-556-5829 and we will find them a solution appropriate to their needs.

Should VoIP or even traditional phone companies be allowed to block these calls? If not, what should the FCC do to curtail this practice, if anything? Share you thoughts below.