AT&T: Free calls may cost $250 M

How much could the so-called Free Calling schemes cost AT&T this year? More than $250 million, if you are to believe a letter AT&T chief lobbyist Jim Cicconi sent to FCC chairman Kevin Martin last week.

As the phone giant’s latest move, Cicconi’s missive to his good friend Mr. Martin should finally engage the FCC into taking some kind of action sooner, not later, on the free-calling issue. According to the AT&T, if left unchecked the free-calling operations could cost Ma Bell more than $250 million in added fees this year alone. Rural telcos and Internet concerns behind the free-calling operations, meanwhile, also want the FCC to intervene on their behalf, and force AT&T to pay its bills and refrain from blocking calls to the services. So let the games begin!

While there is plenty of froth to pick apart in the letter sent by Cicconi (such as allegations of porn-chat lines, network congestion, etc. etc.), the fact that AT&T’s senior executive vice president for external and legal affairs is now involved means that the FCC is likely to respond tout suite. The first and easy guess is that Martin will probably err in favor of AT&T, since many moves made under his reign atop the FCC have been in lockstep with the big telco’s strategic vision. So far, there has been no public statement by the FCC on the matter.

However, AT&T’s decision to appeal directly to Martin and the FCC may be a sign that Ma Bell’s earlier legal forays may not win the day. Certainly, the Internet companies (like free international caller Futurephone) and Iowa telcos are getting bolder of late, returning to make public statements and filing lawsuits of their own, after initially staying silent in the face of AT&T’s legal might (which some call outright bullying).

Since Cicconi’s April 4 letter (which is expected to be posted on the FCC site soon, we’ll link when it is) also brings up the question of Universal Service outlays to the rural telcos, this issue could spread far beyond the question of call-termination fees and Internet telephony to the massively thorny issue of USF itself. In the meantime, AT&T spokesman Michael Balmoris confirmed Monday that AT&T’s wireless arm is no longer attempting to block calls to services like, but that the company will continue to pursue the underlying regulatory issues to stop what it calls the “unlawful kickbacks” between the rural telcos and Internet calling providers. More soon from all parties, we’re sure.