Before I start, I’m going to give some basic definitions of the word “traffic pumping”.  Basically, rural telcos in higher cost areas (places where people are spread out so the infrastructure is expensive to build) are subsidized by urban and suburban telephone customers.  So every time someone calls one of those “high cost” areas, the urban/suburban Telco has to pay the rural Telco a per minute fee.  Scammers have figured out that if they merely offer a free conferencing service or free sex chat service in those areas, they can get the rural Telco to split the ill-gotten loot with them and this effectively funnels around $2.3 billion from American consumers to the traffic pumping scammers.

Now that we know what Traffic Pumping is, Matt Lassar of ArsTechnica wrote a piece yesterday defending the practice of traffic pumping so that people can get free conference calling and free phone smut.  Lassar even found one former FCC economist Alan Pierce (which I really doubt represents most economists) that justified this type of blatant theft as “competition”.  Lassar wrote:

This would be comical if it weren’t so sad.  First of all, most people don’t use conference calling, it’s business people and professionals like me who use conference calling and even then we don’t use it that often.  For consumers, they don’t even have to pay for these “free” conference calling services on their land lines since they’re toll free 800 numbers so the idea that the conference services encourage them to buy unlimited phone service is silly.  The more plausible reason is that unlimited phone service is so cheap now that it’s worth the peace of mind of not having to worry about large surprise phone bills.  As for cell phones, I doubt few consumers spend their time on conference calls and when they do, it’s for work.  I also doubt that most consumers spend that much time on phone sex lines since smut generally requires a more audio and visual experience for most people.

Calling these traffic pumping scams “competition” is a new low and it’s so typical of what passes for “competition” or “innovation” in tech policy these days.  In fact, this definition of “competition” may as well have been lifted from the “Free Press and Public Knowledge style book for public debate” where the word “competition” is merely a euphemism for free-riders.  It might be easy to just overlook these scams as “sticking it to the man” i.e., the big incumbent Telco corporation, but those fees must ultimately be passed on to consumers.  Those fees were meant to subsidize communication costs in rural areas and they weren’t meant to subsidize businesses with free conference calling and subsidize sex chat users with free raunchy talk.

Lassar ends it by quoting the scammers themselves.

“This would be the better interim course as it avoids any harm to the countless small businesses, educational institutions, nonprofits and government agencies that have come to rely upon the competitive conferencing services,”

Small businesses can afford their own conferencing systems or fee based services since it is one of the smallest expense of running a business and they don’t need consumers to subsidize them.  Educational and government agencies can host their own conferencing systems or better yet, use the computers they already have and use free online VoIP solutions.  It’s better to directly subsidized public agencies than have billions of consumer’s dollars lining the pockets of scammers.  That money would be better spent building better communications infrastructure.