A Telecommunications Quirk Has Heated Things Up in Iowa

I grew up near the small towns of Milford and Lake Park, Iowa and never would've dreamed the day would come when these little towns would have so much long-distance sex talk pulsing through their phone lines.

Because of free conference-call services and perhaps a flaw or an oversight in telecommunications law, phone sex hot lines and other chat lines with funky names are using and having their customers call telephone numbers in rural communities, particularly in Iowa. The small Iowa phone companies are making out like bandits, and the large companies like AT&T, Verizon Communications, Inc. and Sprint are very unhappy and taking matters into their own hands to stop it.

Because of the system of conference-calling, every home in even the most secluded parts of the country are able to have affordable phone service. The way it works is that big phone companies such as AT&T and Verizon provide free conference-calling into smaller phone companies. The big companies pay termination charges to the local phone company at a rate of two or more cents a minute and are then billed each month by the small company. Because an increasing number of customers have cell and land-based phones with unlimited or large amounts of long distance minutes, those folks usually pay little or nothing to call into rural area codes -- and they can talk for extended periods of time. Even then, however, that certainly wouldn't be a problem for "legitimate" customers calling home or calling for usual business reasons.

But then along came the sex hot line companies, as well as other types of adult conference-call companies. Although based elsewhere, these companies partner with small companies. They then direct their customers to dial phone numbers from one of as many as 25 remote locales, mostly in Iowa. As a result, the rural carriers are able to bill the big companies for hundreds of thousands or even millions of dollars a month, sharing that revenue with the partners who help bring long-distance calls into their little local networks.

The Poughkeepsie Journal reported recently that one small Iowa telephone company went from 1.5 million chargeable minutes in April 2005 to 25 million chargeable minutes in October 2006; another small Iowa phone company reported chargeable long-distance minutes of 18 million in March 2007.

The big long distance providers are not happy and are claiming the smaller phone companies are abusing the system. The small companies are happy about their new found income and accuse the large companies of sour grapes. The first resort by the big phone companies was to block their customers from calling long distance to hundreds of numbers in these remote areas. However, the Federal Communications Commission warned the companies against such action. Now the big companies are threatening rate hikes to cover their huge monthly expenditures.

Blair Levin, a former FCC official, told the Poughkeepsie Journal that what these small phone companies are doing "isn't illegal, but it raises questions whether this is achieving what the policy was set out to do. These disputes have a history of rising up and being resolved" at the FCC or in court, but soon enough, "there will be a new approach that someone else will figure out."

Despite their differences, both sides agree on the basic facts of the matter. How it gets resolved to everyone's satisfaction is another story.

In the meantime, and until the issue is resolved who-knows-when, the phone lines in Iowa will no doubt continue to carry some hot conversations.