Yak4Ever May Not Be Around 4Ever

from the regulatory-arbitrage dept

TechCrunch is reporting on the demise of Yak4Ever, a startup company that exploited a regulatory loophole to allow them to offer free international calls. The bill was being paid by large telephone companies like AT&T and Verizon, which were forced to pay exorbitant rates to connect the calls under the FCC's byzantine long distance regulations. Apparently, the Baby Bells got fed up and simply stopped paying the bills, and the FCC hasn't ruled on the issue quickly enough to keep Yak4Ever in business. We wrote about a similar company, called FreeConference.com, back in January. That one offered free conference calling services, again subsidized by exorbitant interconnection charges. In that case, we criticized AT&T for blocking the calls instead of appealing the fees to the FCC. But regardless of the legal details, it's awfully hard to have much sympathy for either Yak4Ever or FreeConference. It seems pretty clear that they're not creating new wealth; they're just taking advantage of poorly-thought-out FCC regulations to make a buck at the expense of other phone companies. This is one of the reasons regulators should leave interconnection rates to market forces whenever possible. If long-distance interconnection rates were determined in competitive markets the way transit agreements are negotiated between Internet carriers, this sort of regulatory arbitrage wouldn't be a problem. It's only when the FCC is setting rates by fiat that these kinds of opportunities crop up.
Hide this

Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.

Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.

While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.

–The Techdirt Team

Filed Under: arbitrage, free conference calls, iowa, telcos, termination fees
Companies: yak4ever

Reader Comments

Subscribe: RSS

View by: Thread

  1. identicon
    Joel Coehoorn, 20 Nov 2007 @ 9:12am

    While I agree that FreeConference and Yak4Ever don't really deserve any sympathy, neither do the big Telcos. When it comes down to it these regulations, however misguided, exist because of prior abuse on the their part. This is part of the penalty.

Add Your Comment

Have a Techdirt Account? Sign in now. Want one? Register here

Subscribe to the Techdirt Daily newsletter

Comment Options:

  • Use markdown. Use plain text.
  • Remember name/email/url (set a cookie)

Follow Techdirt
Insider Shop - Show Your Support!

Essential Reading
Techdirt Deals
Report this ad  |  Hide Techdirt ads
Techdirt Insider Chat

Warning: include(/home/beta6/deploy/itasca_20201215-3691-c395/includes/right_column/rc_promo_discord_chat.inc): failed to open stream: No such file or directory in /home/beta6/deploy/itasca_20201215-3691-c395/includes/right_column/rc_module_promo.inc on line 8

Warning: include(): Failed opening '/home/beta6/deploy/itasca_20201215-3691-c395/includes/right_column/rc_promo_discord_chat.inc' for inclusion (include_path='.:/usr/share/pear:/home/beta6/deploy/itasca_20201215-3691-c395:/home/beta6/deploy/itasca_20201215-3691-c395/..') in /home/beta6/deploy/itasca_20201215-3691-c395/includes/right_column/rc_module_promo.inc on line 8
Recent Stories

This site, like most other sites on the web, uses cookies. For more information, see our privacy policy. Got it

Email This

This feature is only available to registered users. Register or sign in to use it.