The impact of call-back and arbitrage on the accounting rate regime

Robert M Frieden

Telecommunications Policy, vol. 21, issue 9-10, 819-827

Abstract: Call-back operators have secured a profitable arbitrage opportunity created by the disparity between actual and tariffed costs of international calling and the failure of accounting rates to reflect declining costs. Without operating agreements and often without legal authorization these operators provide callers in high cost areas with outbound calling capability that appears to originate from areas with lower costs. Technological innovation and entrepreneurial craftiness make it all but impossible for nations to prohibit call-back services. This article will examine callback and other arbitrage services with an eye toward assessing whether and how the current accounting rate regime will collapse.

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