Well, that was fun while it lasted - for consumers at least. Yak4Ever has sunk back into the TechCrunch Deadpool after reemerging from it in May. This time it looks as though it’s there to stay.
We first reported on Yak4Ever when it was called AllFreeCalls back in January. The company exploited a loophole in Iowa telephony law that let them provide free international calls to users. The FCC was basically forcing large telecoms to pay the fees of rural phone companies. AllFreeCalls was able to partner with one of these rural companies to route out-of-state calls through them, thereby enabling out-of-state users to take advantage of the in-state kickbacks. For awhile there, users only had to dial AllFreeCalls, punch in the international number they wanted to reach, and voilĂ , instant savings.
In February, AllFreeCalls was shut down after its rural operator felt too much pressure from a “large USA-based carrier,” which wasn’t all-too-happy about paying $2,000,000 for mostly non-Iowans to save some money. But in May, AllFreeCalls was resurrected as Yak4Ever with a new operator. It provided pretty much the same service, except that now you needed to register with the site and put down the international numbers you wanted to call ahead of time.
Now it looks as though the party is over because the big telecoms have simply stopped paying for it. In a blog post today, founder Pat Phelan says that while “we have been underwriting the costs and expenses of project for the past several months…we cant continue to make these losses on and with no sign of the FCC forcing the carriers the pay us we have to take the decision to shut the service down.” Looks like the buck has finally stopped with Yak4Ever.
Don’t worry about Phelan, though; his new company Cubic Telecom, which also aims to provide free calls but in this case by selling special SIM cards, is doing quite well. The company’s first product, MAXroam, has hit its 12 month sales target only two months after launching at the TechCrunch40 conference.
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When AllFreeCalls shut down in February as a result of litigation, most people thought it was gone for good. The service, which allows people to call overseas for free by exploiting a regulatory loophole, was simply too good to be true.
Founder Pat Phelan vowed to bring the service back. And today he says he’s done it, under a new name and using a new back end service provider.
The new service is available at Yak4Ever. Like AllFreeCalls, all users have to do is call an access number in the U.S. and then forward on to an International number for free.
There are a couple of differences in the service though. First, users must register before making calls (this was not required previously). Also, international numbers must be pre-set. At registration you enter up to ten phone numbers and each is given a code (1-10). When you dial the access number you simply enter the code for the number you want to dial. The service is live now, but calls cannot be made until Monday.
There is now less flexibility in making calls to unique phone numbers, but for people who call the same friends and family all the time this will become very popular very fast. AT&T and others are going to continue to fight to kill this, since they are effectively subsidizing the service.
I’m removing the service from the DeadPool. For now.
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AllFreeCalls has been taken offline after a flurry of legal action by a very pissed off AT&T.
The AllFreeCalls service allows people to make international phone calls absolutely free by exploiting a FCC regulation that provides kickbacks on incoming calls to rural phone companies. Users first call a phone number in Iowa and then call out to any of dozens of countries from there. The user only pays the toll to Iowa, if any. See our original post for more information on how it works. Apparently all of these free calls (from AllFreeCalls as well as other similar services) resulted in a jump from $2,000/month to $2,000,000 in subsidies from AT&T to a single Iowa Telco.
In a blog post today founder Pat Phelan says “Our allfreecalls provider in Iowa today took flight due to increasing pressure from a large USA based carrier. We are working on getting a new number up. We expect to be back in business on Monday afternoon.”
We’ll check back in next week to see if the company has found yet another loophole in the regulations to keep (profitably) providing free international calls to people. Until then, you’re just going to have to pay for those international phone calls. Or use Skype. For now, we’ve put AllFreeCalls into the TechCrunch DeadPool.
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