IRS Employees Spent 8.4 Million of Tax Payer Dollars on Calling Card Calls

In a recent report by the Treasury Department, it was disclosed that the IRS had issued just over 34,000 calling cards to it's employees for the purpose of making business related long distance calls (primarily for dialing into conference calls). The most disturbing part of the report is that in the period from October 2005 to April 2008 the total spend on these cards was about 8.4 million dollars. In one case it was found that 1 calling card in particular had made over $59,000 worth of calls in a one year time frame.

The abuses of these business issued calling cards is just another example of the governments total lack of controls in the way they manage their funds. The report points out that there is a glaring need for the IRS to increase their controls over the use of these government issued cards... ya think???

The sad part is the best solution that the IRS can come up with is to review these numbers quarterly for better identification of abuse and fraud rather than it's current trend of once every three years. How about reviewing who actually needs one of these cards in the first place and limiting the number of people with government issued cards into the hundreds rather than in the tens of thousands! In the modern day with low cost mobile plans, all inclusive conference services and free (or close to free) calling methods like Skype, why in the world would the IRS need to have so many calling cards circulating around?

Knowing how slow the government tend to move, it would be of no surprise if we are still seeing the same high spending a year or two from now as well!.

The service provider for these cards is AT&T

Complete details of the IRS calling card program can be found on the IRS website at http://www.irs.gov/privacy/article/0,,id=161120,00.html

Primus Telecommunications Files Chapter 11 Bankruptcy Protection

Long time telecom player, and phone card provider, Primus Telecommunications Group Inc. filed for chapter 11 bankruptcy protection this week in Delaware bankruptcy court. They had been on financial hard times the last few years and had been managing to make ends meet these last few years since their big tumble in 2006 but were no longer able to stay afloat with a huge mounting debt. Hoping to find some relief from creditors and have a chance at restructuring they finally decided to go into chapter 11. It is important to note that the company does plan to try and restructure and is not necessarily heading into chapter 7. They have given a timeline of about 120 days to complete their restructuring.

Their main businesses include carrier wholesale, phone cards (small), home VOIP service (lingo) and various other VOIP based business offerings. Their 4th quarter 2008 net revenues were reported at 203 million and close to 1 billion in liabilities. The filing did not include their separate sub business entities in Europe, Australia, Brazil, India and Canada.

NJ Division of Consumer Affairs Settles With 7 Calling Card Companies

Today the New Jersey Department of Consumer Affairs announced that seven phone card providers have agreed to a settlement in principal with the state regarding possible misleading and deceptive advertising practices (sound familiar).

Dollar Phone, IDT, STI, Total Call, Epana, CVT and Locus have all agreed to a settlement with that state that will involve the companies cleaning up their advertising practices, agreeing to three years of close monitoring, paying a 1 time $5,000 amount to the state to help cover the costs of the investigation and an additional $5,000 a year for each of the next three years to help pay the costs of monitoring (CVT will pay the initial $5,000 but not the additional $5,000 a year since they are no longer operating an active calling card business).

I am now left wondering how many other states are going to take the phone card business down the same path? Are we going to see all 50 states go sown this same path?

To view more details about the settlement visit: http://www.consumeraffairs.com/news04/2009/03/nj_calling_cards.html

My Friend Phone Card Mexico Commerial

Cute commercial for an SDI card.

Comcast Now The Third Largest Home Phone Service Provider in US

It took just less than three years for Comcast to become the third largest home phone service provider in the US, overtaking Quest Communications and just behind Verizon and at&t.

Comcast service is available in 39 states and they currently claim to have 6.47 million subscribers. Their success comes no doubt from their ability to bundle the phone service with their existing cable TV and Internet service base.

Unlike their competitors at&t, Verizon and Quest, who are losing subscribers at an astounding pace, Comcast is still expected to see subscriber growth in the coming years as they continue to push the high savings that comes with their bundled service options. However it is unlikely that Comcast will pass either Verizon or at&t anytime soon as both companies still have in excess of 20 million subscribers each.

Verizon has been fighting back recently with their fiber optic offer (FIOS) which aims to not only slow the churn of home phone service customers but looks to gain new business in the Cable TV market.

Poll Results - Which Phone Card Provider Will Do Best in 2009?

The poll results are in and here is how all of you voted on the question of "Which Phone Card Provider Will Do Best in 2009?"

62% of respondents said STI will do best in 2009
12% of respondents said IDT would do best
10% of respondents daid Locus would be better
8% of respondents said Total Call would end up as the top performer
6% of respondents said Ibasis would do best

There is no doubt that STIs recent pick up of CVT puts them in the best position for 2009 but I wouldn't count out IDT, who still controls a very slight lead in market share. While all of these companies know how to do the tried and true, the leader will be the one that branches out and adds new products to their mix like international mobile top up, prepaid mobile, and money remittance.