The FCC allowed small and rural telcos (local exchange carriers, LECs) in the USA to charge higher access fees to long distance and wireless companies (AT&T, Sprint, Verizon) to subsidize them, under the auspices of the Telecommunications Act of 1996. Abusing the prerogative, they partnered with conference call providers and providers of other shady services, giving birth to traffic pumping: generate high volume of incoming calls above typical rural usage to charge millions of dollars of fees to long distance and wireless companies and split the revenues with the service providers. Fast-forward to the present, technological advances and new business models are having a hard time to operate under this old set of rules, hampering new innovative services like Google Voice.

Every distortion introduced by regulators in the free market and the natural state of technology, however well-intended, sows the seeds of its own self-destruction.