Free International Calls! Just Dial ... Iowa

ByABC News
October 12, 2006, 6:22 PM

Oct. 13, 2006 — --

IMPORTANT NOTE: As of February, 2007, Futurephone, the service we described in this piece, was discontinued. It was named in a lawsuit by AT&T, which argued that it had to pay so-called "termination fees" on calls that went to rural Iowa, even though the calls were ultimately routed to other countries.

The first question most people seem to ask when they hear about is: What's the catch?

It turns out there really isn't much of one. Eventually -- though not yet -- you'll have to listen to a short commercial before your call goes through.

Futurephone, a California startup company, has, for the last three weeks, been offering you the chance to call a number in Iowa, then enter a number you're trying to reach in any of 50 other countries, and -- bingo -- you're on the phone to Shanghai. Or Warsaw. Or Christmas Island.

We tried it, and it works. You call 712-858-8883, and a recorded voice answers, inviting you to hear brief instructions in English, Spanish or Chinese. Then you dial 011, the country code (51 for Peru, for instance, or 359 for Bulgaria) and the local number. If someone is there and awake to answer at the other end, you can talk to the other side of the planet -- for whatever it cost you to make a call to Iowa.

"The cost of a call has gone down so dramatically," says Tom Doolin, a principal in Futurephone. The firm, which has about 30 employees to start, uses Voice over Internet Protocol (VoIP) to route the calls for next to nothing. The consumer does not need new software or telephone hookups. Futurephone has made deals with telecom operations in the countries where calls can "terminate."

Technically, the call the consumer makes is not entirely free; one does have to have domestic long-distance service. But millions of Americans pay monthly fees that allow them unlimited long-distance calls.

Where, by the way, are you calling when you reach 712-858-8883? It turns out to be an exchange in Superior, Iowa, a town of 142 people on the Iowa-Minnesota border. But Doolin says that's simply a number his firm was able to use to route calls inexpensively.

The next obvious question is how the company hopes to make money without charging anything, and the answer is simple. Like many other Internet-based firms, they plan to work on an advertising model.