Tuesday, January 30, 2007

Rent seeking=FREE international calls?

"Rent seeking" is a term economists use to describe how companies get government to make rules and laws that give the companies an advantage in the market they would not have in a free and open market.

In a very interesting case of rent seeking by rural phone companies, they apparently (don't understand it fully yet) got a law passed that gives them a subsidy of 7 cents per minute for inbound calls. Since it costs only 1.5 cents per minute wholesale
for international calls,  a small company in Iowa is providing free international calls that cost them 1.5 cents per minute so they can get the subsidy of 7 cents per minute for the inbound calls.....so, all you do is call their number in Iowa and  then dial an outbound number to the countries they serve for free.

Here is a link to the service

Here is more info