What is the Future of Prepaid Phone Cards?

While most of us will no doubt agree the prepaid phone card boom is well behind us, but the real question now is what kind of future does the prepaid card business hold?The answer, seems to be clear by the fact that the once powerful companies, like UTA and STI are just not doing well. Sales of prepaid cards are at an all time low and I think the market was just so badly managed and abused that the customers are more willing to try other methods of long distance calling, like with prepaid cellular phone, VOIP services (Skype/Vonage) as well as traditional long distance. The idea that the average prepaid phone card customer is credit challenged and prefers cash business is changing and more and more immigrants are either becoming more credit enabled or now have the means, through prepaid cash cards and other debit systems, to buy more mainstream services. Immigrant consumers are more educated and technology savvy than they were 5 years ago and the rates that Ma Bell and VOIP players are offering today are so low that it is almost no wonder why a lot of people are turning away from phone cards.

Phone Card of Emerald Court

Phone Card of Emerald Court

FCC Lays Down USF on Prepaid Calling Card Companies

Looks like most calling card and VoIP companies are now having to scramble to get in compliance with new laws requiring them to collect Universal Service Fund (USF) fees from all users. VoIP users will se it in additional fees on their monthly phone bill but calling card users will not see it directly as most providers will just build it into the rates. Where end users will notice it, is with less competitive per minute rates.I guess it's only fair since Ma Bell has been having to collect these fees forever but in the end it just means less minutes for the money.

Skype Launches SkypeOut System to Boosts Its Free VoIP International Long Distance Calling Plan

Skype is going all out to strengthen its position in its market. Skype has always tried to stay competitive in a rather intense market. But, now by offering the SkypeOut system, Skype users can call anywhere in America or Canada for free. Previously, users of the downloadable peer-to-peer voice service had to purchase credit to make calls to non-Skype users. However, the new free SkypeOut service trumps even similar VoIP applications.

Skype traditionally has had greater user adoption in Europe. Most domestic users of VoIP services tend to gravitate toward ISP branded services. The free service strategy is a gusty move by Skype to capture more users and eventually transform them to paying customers. In addition, by pursuing this strategy, the competition will be under a severe pressure to keep up with Skype. By offering the SkypeOut service, Skype is trying to build its user base so that, in addition to levying fees for some add-on services, it could sell advertising on its Web site or even at the beginning of phone calls.

Source:
http://www.voip-news.com/news/skype-free-051506/

Tax Refunds for Phone Card Retailers

With tax time upon us, just wanted to make sure that those of you who have not yet filed, be sure to use the Federal Excise tax credit.

While every home user qualifies for a credit on their post paid telephone services, prepaid card Excise tax was always the responsibility of either the carrier or the retailer, so therefore they can qualify for a refund. As long as the phone card was not restricted to local-only service, the retailer or service privider is eligible to request the refund.

The government stopped the LD excise tax (3%) last August after a federal court decisions stated that the tax does not apply to long distance service anymore as it was dated. The IRS also authorized a one-time refund of the 3 percent federal excise tax collected on service billed during the previous 41 months, stretching from the beginning of March 2003 to the end of July 2006.

Businesses request the refund by filling out Form 8913, Credit for Federal Telephone Excise Tax Paid, and attaching it to their regular income-tax return. More information on the refund is available in the “Telephone Excise Tax Refund” section on the front page of IRS.gov.

Call to Mexico Mobile Rates Go Up

You may have noticed that calling to Mexican celular phones has increased considerably lately. The Mexican government just passed a law to increase the cost of calls made to mobile phones significantly. The bill requires all calls made to a cell phone in Mexico to rise by 14 cents a minute. Both callers in Mexico and callers outside Mexico will have to pay the additional fee making for one of the biggest fare hikes in recent telecom history.Now Mexico comes into line with many other countries, who charge the calling party significantly more for calls made to mobile phones. The US and a handfull of other countries are the only ones who don't charge a different rate for calls made into mobile phones.The effective retail rate for most companies will be around $0.31 a minute to complete calls to Mexico Mobile.

Study Warns Cell Phones Could Cause Airliner Crash

Lifting the current ban on use of cell phones aboard airliners could pose the risk of a major accident, according to a new engineering study.

The study by Carnegie Mellon University researchers has found that cell phones and other portable electronic devices, like laptops and game-playing devices, can pose dangers to the normal operation of critical electronics on airplanes. The study will be featured in an article appearing in the March issue of IEEE Spectrum.

"We found that the risk posed by these portable devices is higher than previously believed," said Bill Strauss, who recently completed his Ph.D. at Carnegie Mellon. "These devices can disrupt normal operation of key cockpit instruments, especially Global Positioning System (GPS) receivers, which are increasingly vital for safe landings." Strauss is an expert in aircraft electromagnetic compatibility at the Naval Air Warfare Center in Patuxent River, Md.

With support from the Federal Aviation Administration, three major airlines and the Transportation Security Agency, researchers crisscrossed the northeast United States on commercial flights, monitoring radio emissions from passenger use of cell phones and other electronic devices. They tracked these radio emissions via a broadband antenna attached to a compact portable spectrum analyzer that fit into an innocuous carry-on bag.

"A laptop computer controlled the system and logged the data," said researcher Granger Morgan. "While we looked primarily at wireless phones, we also discovered that emissions from other portable electronic devices were problematic." The researchers found that on average one to four cell phone calls are typically made from every commercial flight in the northeast United States. Some of these calls are made during critical flight stages such as climb-out, or on final approach. This could cause accidents, the investigators report.

Both Strauss and Morgan, along with Carnegie Mellon researchers Jay Apt and Dan Stancil, recommend that the Federal Communications Commission (FCC) and the FAA begin to coordinate electronic emission standards.

At the moment, there is no formal coordination between the two federal agencies. The researchers also recommend routine monitoring of on-board radio emissions by flight data recorders and deploying specially designed tools for flight crews to monitor passenger use of electronic devices during final approach.

While the FCC recently suggested that it might be appropriate to allow passengers to use cell phones and other electronic devices on airplanes, Morgan disagrees. "We feel that passenger use of portable electronic devices on aircraft should continue to be limited for the safety of all concerned," Morgan said.

Source:
http://www.consumeraffairs.com/news04/2006/03/cell_phones_planes.html

UnionTelecard.com Receives a Face Lift

The perennial super power in the prepaid calling card business just launched it's newly redesigned Uniontelecard.com which features less product selection but all cards are now fully rechargeable and feature pin less dialing. They no doubt realized that most of their cards were not suitable for the online consumer and decided to limit it to about 8 cards.This new web site design and focus on rechargeable cards now make Union Telecard Alliance one of the most powerful online retailer of phone cards.

Telecom Charity Fundraiser upset with amount of charity phone card donation for Dancing with Stars Cast a Vote Fundraiser

The Multiple Sclerosis Society is disappointed that one of its board members has criticised Telecom for the amount of money it gains from Dancing with the Stars donations.

It costs $1 to cast a vote on the hit show and board member Brian Stevens has expressed disappointment that Telecom keeps 40 cents of that. The remainder goes to a charity of the dancer's choice.

Society president Gay Dickie says Mr Stevens was not speaking on behalf of the board. She says the board did discuss the issue, but the society is delighted to have benefited from the support of Telecom and the show.

Ms Dickie says the society did very well out of the show last year and that helped many MS sufferers across the country.

Update: Congress puts in there two cents to phone card calling record collecting!

Congress Vows Scrutiny of Phone-Record Collecting (Update)

May 12 (Bloomberg) -- U.S. lawmakers are vowing to take a close look at the government's secret collection of millions of phone records and will demand answers from President George W. Bush's nominee to head the Central Intelligence Agency.
Disclosure of the National Security Agency program yesterday reverberated across Capitol Hill, where members of Congress introduced legislation, called for investigations and pledged to order executives from the biggest U.S. phone companies to testify about their role in the effort. Air Force General Michael Hayden, the former NSA chief nominated to head the CIA, will get extra scrutiny, Democratic and Republican lawmakers said.

"We are on our way to a major constitutional confrontation on the Fourth Amendment guarantees on unreasonable searches and seizure," said Democratic Senator Dianne Feinstein of California, who sits on the intelligence subcommittee that was briefed on the program. "This is also going to present a growing impediment to the confirmation to General Hayden."

Bush, responding to the outcry, made a hastily arranged appearance at the White House where he defended the administration's spying efforts as necessary to fight terrorists. He didn't confirm or deny the program, which was reported yesterday by USA Today. "The privacy of ordinary Americans is fiercely protected in all our activities," Bush said. `"We're not mining or trolling through the personal lives of millions of innocent Americans."

Three Phone Companies
The newspaper, citing anonymous sources with direct knowledge of the matter, said Houston-based AT&T Inc., Atlanta- based BellSouth Corp. and New York-based Verizon Communications Inc. turned over the records to the NSA, which compiled a massive database with the information. Only Qwest Communications International Inc. refused to give the government the data.

Herbert Stern, a New Jersey lawyer representing Joseph Nacchio, who was Qwest's chief executive officer when the government requested the records, issued a statement today saying the effort began after Congress in October 2001 passed the Patriot Act, which expanded law enforcement powers. Stern said Nacchio asked whether a warrant had been issued to back the NSA request for phone records.

"When he learned that no such authority had been granted and that there was a disinclination on the part of authorities to use any legal process," Stern said, "Nacchio concluded that these requests violated the privacy requirements of the Telecommunications Act."

Intelligence Committee
Nacchio left the company in June 2002 and now faces criminal charges of insider trading of $101 million of Qwest shares. He also is accused in a civil Securities and Exchange Commission suit of directing a $2.5 billion accounting fraud at the company.

News of the NSA program didn't sit well with several members of the Senate Intelligence Committee that will hold hearings on Hayden's nomination. Hayden ran the NSA from 1999 to 2005. Panel member Senator Chuck Hagel, a Nebraska Republican, met with Hayden today and said he supports the nomination. Still, the senator predicted Hayden will be grilled about NSA spying during his confirmation hearing. "He is going to have to explain what was his role to start with," Hagel said. "Did he put that program forward? Whose idea was it? Why as it started? He knows that he is not going to be confirmed without answering these questions."

Senator Susan Collins, a Republican from Maine, said she supports Hayden's confirmation though she said the government needs to be more forthcoming on the program's scope. "We need a CIA director in place," Collins said.

Security and Liberty
Outside Hagel's office, Hayden defended the NSA programs. "The only purpose of the agency's activities is to protect the security and the liberty of the American people," Hayden said. "Everything the agency has done is lawful."

At a Senate Judiciary Committee hearing yesterday, Chairman Arlen Specter demanded that executives from the three phone companies testify before Congress about their agreement to turn over customer data. "I am determined to get to the bottom of this," said Specter, a Pennsylvania Republican, who added that he will subpoena the telephone companies if they decline to appear before his committee voluntarily.
Hayden, nominated for the CIA post this week by Bush, was already facing scrutiny for his role in creating another surveillance program of wiretapping phone calls and e-mails between the U.S. and other countries without a court warrant when one of the parties is believed to be a terrorist.

'Concerned' About Program
In the House of Representatives, Majority Leader John Boehner said he is 'concerned' about the program disclosed yesterday "because I'm not sure why it would be necessary to keep and have that kind of information."

Boehner, a Republican from Ohio, said Hayden `"will have a lot more explaining to do." Some Republican senators defended the program described in the newspaper report. "They are not tapping our phones or getting our conversations," said Senator Jeff Sessions of Alabama.

Spokesmen for Verizon, AT&T and BellSouth declined to comment, citing national security concerns, and said they follow the law. NSA spokesman Don Weber said the agency "operates within the law" and takes its legal responsibilities seriously.
USA Today said the records collected by the NSA identify the phone numbers people call but not their names, addresses, other personal information or the contents of calls.

The NSA used the records for a computer analysis that looks for patterns that could show terrorist plotting, the newspaper reported. The program looks at details like how long calls last, where they originate, when they take place and what number is called.

To contact the reporters on this story:
Robert Schmidt in Washington at rschmidt5@bloomberg.net;
James Rowley in Washington at jarowley@bloomberg.net.