Brian Roy’s Blog

Free World Dialup moving to $30 annual membership

Sunday, August 10th, 2008 | Business Model Innovation, Emerging Technology Practice, Innovation, VoIP

From Jeff Pulver’s blog this morning comes news that FWD (Free World Dialup) is going to begin charging for VoIP Service. FWD has long had a very large user base and significant challenges generating any revenue from that base… they’ve seen Vonage, Broadvoice etc create businesses from the basic idea they’ve been working since 2001.

Full post from Pulver’s Blog

I do not see this as a bad thing… FWD will need to generate revenue to survive in the near/mid term. This, however, doesn’t really change the reality that the cost of making a call is on a steady march to 0.

more after the jump…

The challenge is simple – no one has yet found a compelling set of value added services (or features if you insist on the telecom terminology) beyond a base “phone call” that consumers are willing to pay for. That, however, is still the future of revenue in communications – and what we are executing against at cosinity.

At cosinity we are simply taking a different approach – we are not providing phone numbers, connection to the PSTN, SIP trunks or registration. There are 2 reasons for this:

1. There are plenty of CHEAP resources for that – and we have no interest in becoming another minute provider competing on price.
2. If we did that we would have to restrict our services to “our network” to defend the revenue generated by selling minutes.

We are committed to the idea that the application is valuable an the phone call (or other communication mechanism) is a pure commodity. You have phones/phone numbers/devices/etc what you need is applications that make them more USEFUL and deliver real value to you or your business.

Here is what Jeff had to say and a link to the full post.

The email below went out to inform the nearly one million registered users of Free World Dialup of plans to adopt a $30 annual membership fee as of September 1, 2008. Daniel Berninger has responsibility for day to day operations of FWD as CEO, but I wanted to add a few words on the motivation for taking a stand for paid membership.

Yogi Berra said, “When you arrive at a fork in the road, take it.” I don’t know if anyone predicted that the entire VoIP industry would end up with business models dependent on traditional telecom revenues, but it seems hard to deny with Skype, Jajah, Ribbit, and a long list of others chasing per minute revenues. We are risking the exodus of the FWD user base (and inevitable hate mail) to prove there exists an alternative. FWD will move forward in support of communication between paid members and anyone else with VoIP devices connected directly to the Internet. We will provide no services to facilitate interconnection with the telephone network. This represents a recommitment to the work that motivated the FCC to issue the Pulver Order in 2004 recognizing FWD as entirely unregulated. We believe the energies dedicated toward gaming the telephone network would produce much better results if applied to the task of creating services, applications, and content for communication devices directly connected to the Internet. Chasing an experience based on charging per minute immediately erases the prospect for an Internet like experience independent of geography and usage charges. FWD is the only VoIP enterprise going this route, and plentiful options exist for those looking for cheap minutes. I hope people will remember FWD’s 12 years as a free service and wish us luck as we put action to our convictions.

[From Free World Dialup moving to $30 annual membership]

Tags: Tech