Free World Dialup no Longer ‘Free’

Over the weekend, the one million registered users to Free World Dialup (FWD) were told that free is no longer free. After 12 years of free operations, users will be asked to pay $30 per year as of September 1, 2008. The announcement also named Daniel Beringer, as CEO of FWD.

In an email sent out on Friday by FWD founder and VoIP pundit Jeff Pulver, the $30 yearly fee is being justified as a “magic number” that is only ”10%” of the cost of Vonage’s unlimited usage plan.   However, Pulver has disavowed any connections with old style telephony and the PSTN, vowing not to chase per-minute arbitrage for lower-cost long distance calling as Skype, Jajah and others have done. According to the blog post, FWD “will provide no services to facilitate interconnection with the telephone network,” which means the company won’t support “-In” and “-Out” connection type services to the PSTN. It also won’t have to worry about 911 and CALEA obligations.

It will be interesting to see how well FWD’s business model will work in practice. In theory, users could pay $30 to be able to connect to a large number of SIP networks for voice, IM, and video calls. But it is only a matter of time before one or more of those networks start asking for interconnection charges since the “Free” has gone from FWD. Vonage has already nixed FWD’s free calls on its network.

The blog post also cites Vonage as a successful business model on track to generate nearly “$1 billion,” but this reporter isn’t sure if that’s a good analogy.  Vonage is still burdened with significant debt due to high per user marketing costs and its services are also designed as a plug-replacement for PSTN, with the ability to reach any number anywhere, including 911. 

For more
- Pulver FWD $30 per year manifesto blog

Related articles:
Beringer has pontificated on Lights Out for Phone Networks
FWD may have The Telco Skype Killer to fear