The Broken Economics Of Robocalls

TProphet
3 min readMay 5, 2018

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“It must cost a lot of money to make so many robocalls,” someone asked me. “How can they afford to do it?” That’s a really good question. The reality is that it costs almost nothing to do it, scamming you is profitable, and that is why they do it.

Robocallers use high volume automated dialers. These operate using a technology called SIP, which is a way to run voice traffic over the Internet. It’s also the technology, combined with a legacy telecom protocol called SS7, that allows them to call you from fake numbers. These automated dialers place a *lot* of calls. So many calls, in fact, that they can get very good wholesale pricing. It’s a little tough for them to find phone companies who are willing to work with them, though, because their average call duration (ACD) is low. But only a little. There are still dozens of providers out there willing to take this traffic.

The way you find them is by searching using the same sort of coded language as race-baiting politicians. Look for SIP providers who list “call center” or “dialer” rates. When you do this, you can begin get a sense of the economics behind robocalls. Here’s an example. Starcom Partners, a phone company you have probably never heard of, can happily carry up to 5,000 simultaneous robocalls per second if you’d like. And they’re just *one* of the dozens of companies out there doing it. Check it out: https://starcompartners.com/termination

Making matters worse, once you make a deal with a phone company, you’re instantly as trusted as anyone else on the phone system. If you’re selling freeze dried pet taxidermy by robocall, you might as well be AT&T. Whatever number you claim to be calling from is good enough for Verizon. Your calls will go through. And why wouldn’t they? Phone companies have an economic incentive to deliver traffic, regardless of how junky it is, because they get paid per minute by the phone companies sending it. That’s why you shouldn’t look to phone companies to fix this. Sure, they will tell you they’re working on a thing called SHAKEN/STIR, but that’s really just a way for big phone companies to lock out smaller ones. It has very little to do with actually preventing robocalls.

How much does robocalling cost, you might ask? Suppose you want to robocall Microsoft and sell SMB 1.0 timeshares to Ned Pyle (if you missed the joke, Ned is responsible — to his chagrin — for maintaining SMB 1.0, one of the most poorly designed pieces of software Microsoft ever produced). My phone number there used to be (425) 705–7xxx so we can look up the rate: 0.002353 cents per minute. “OK, TProphet” you might say, “but that’s pretty expensive! 4 of those calls adds up to about a penny. That means 400 are a dollar. And pretty soon that adds up to real money.” And you’d be right, except that the calls are billed in… 6 SECOND increments.

Let that sink in.

Most people hang up on robocalls. You can make over 4,000 of them before it costs you $1. You can call every single person in the entire city of Seattle for about $150.

It is against this backdrop that I actually have a solution for this problem, but it’s going to take the scale of — well, Facebook — to solve it. Even Google’s footprint is too small. If Facebook wants to solve the problem, maybe they’ll even hire me to do it — I’m available! However, I’ll gladly give them the solution for free even if they don’t want me involved. I just want the calls to stop!

There are, to be clear, other solutions in play. I don’t see these as bad or even competitive; multiple layers of assurance are complementary in this problem space. It’s a little frustrating to be sitting on the sidelines with a solution that is not only (relatively) trivial to implement but would totally work. In a nutshell, one of two things has to change: either it has to become harder to place robocalls, or it has to be harder to get them answered. And the latter solution is more forthcoming than the former.

I can’t wait to get to work.

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TProphet

@CuddliApp and @PCPursuit founder, @Seat31B blogger. @RSMErasmus MBA. World citizen. Every day, my life continues to amaze me. // Opinions are my own.