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The Almighty Buck

MCI Accused of Long-Distance Call Accounting Fraud 196

Posted by michael
from the save-a-buck-or-two dept.
drcobb writes "According to the New York Times, MCI is under investigation again. This time for spoofing SS7 point codes to avoid paying access tariffs. Federal prosecutors have opened an investigation in the United States and Canada into accusations that MCI, the nation's second-largest long-distance carrier, defrauded other telephone companies of at least hundreds of millions of dollars over nearly a decade, people involved in the inquiry said."
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MCI Accused of Long-Distance Call Accounting Fraud

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  • So... (Score:5, Interesting)

    by rf0 (159958) <rghf@fsck.me.uk> on Sunday July 27, 2003 @06:23AM (#6543710) Homepage
    We are going to have a long inquiery followed by a long drawn out process to get the money out of them if found guilty?

    Rus
    • Re:So... (Score:3, Informative)

      You as a customer wouldn't see any money out of em, anyway. They were cheating other phone companies out of their cut for originating or terminating the call. They were charging their customers the full tarriffed (sp?) rate, but not overcharging them. They were just lowering their overhead by fraudulent methods. Any fines or remuneration would be to the telcos they cheated. Sigh.

  • Wow. (Score:5, Interesting)

    by afidel (530433) on Sunday July 27, 2003 @06:28AM (#6543725)
    I can't believe that a conspiracy that large and which touched on interactions with that many other rival carriers could have possibly gone on for a decade unnoticed. Is the biling and routing that automatic or is it just so screwed up that the fraud was lost in the noise?
    • Re:Wow. (Score:5, Funny)

      by mangu (126918) on Sunday July 27, 2003 @07:13AM (#6543794)
      Is the biling and routing that automatic or is it just so screwed up that the fraud was lost in the noise?


      Yes and yes. Companies today are being managed by MBAs who don't know a fucking shit about the way business actually works, all they know about is "administration". MBAs never get into the detais, they only think in the big picture. If it isn't shown in power-point slides, then it doesn't exist. If fraud wasn't in the business plan, or if it wasn't mentioned by the marketing consultants, it doesn't exist.

      • Re:Wow. (Score:4, Informative)

        by scoove (71173) on Sunday July 27, 2003 @12:48PM (#6544919)
        all they know about is "administration"

        Even that is a stretch. Having dealt with various Worldcom entities for more than a decade as a carrier customer, I'd argue that it's hard to claim that there was any organized administration.

        Ebbers was a rabid M&A man, and he did an exceptional job in keeping the acquirees off balance; e.g. MFS Datanet acquisition (Crowe and other MFS executives got to play "co-CEO for a day" and experienced all the usual Ebbers tricks).

        Unfortunately, the consequence of this structural imbalance was a balkenized company. I've been on conference calls where MFS people accused MCI folks who were accusing LDDS folks who were blaming Worldcom folks, and so on (all in front of the customer). One unified company? Not.

        In fact, things were so bad in 1998-2000 that circuits would routinely be lost or even killed by incompatible systems. We had DS3s from Washington to NYC which were originating and terminating feature group D circuits (for local phone calls from Bell Atlantic to the carrier I worked for) that one Worldcom system would label incorrectly (putting a code on the circuits that indicated it was temporary), and another started killing off when so many months passed without a change in the code to a permanent status.

        Amazingly, Worldcom couldn't restore the circuits. They claimed that once a circuit was killed, the only solution was to create a new circuit. This took weeks (with disrupted traffic), only to go through the same problems three months later when the new circuits would get knocked down. Suffer a half-year of this abuse and you'll see all of your local long distance customers disappear as this carrier did.

        I always suspected anticompetitive practices behind the activities, and surprisingly it's not difficult to construct. Looking at the practices as a business "denial-of-service attack", minor decisions (like not funding and fixing compatibility problems between systems that only affects carrier customers) end up having strategic value. Combine that with a "we're too large to respond, investigate or care" attitude, e.g. Worldcom billing's inability to figure out how to properly credit, and you've got a pretty effective strategy (Qwest is another notorious "goof and refuse credit" player - if you've got the attorneys and the size, I guess they feel the need to use them to stall customer refunds). This was one literally hundreds of experiences of this nature with Worldcom.

        It'll be interesting to see of the Feds look into Worldcom's "leaky PBX" operations, where they routinely dumped international calls into foreign telephone networks without paying settlement. By obtaining local phone lines to a office PBX, and back-ending the PBX with international circuits (often satellite links on the office building), Worldcom would sneak traffic in and dump it without paying any per-minute rate - much similar to some of the local termination abuse claims being investigated now.

        In Worldcom's defense, many carriers also employed leaky PBX.

        *scoove*
        • by ZPO (465615)
          I started out with a little company out of Dallas, TX called Metro Access Networks (MAN). I loved the name and loved the company even more. Finally, I could saw I was "workin' for the MAN!"

          After about a year they got bought by Brooks Fiber Communications (Burger, Fries, and a Coke). About 6-9 months after that they got bought by the Borg (Worldcom). Shortly after that Worldcom bought MCI.

          I said it then and I'll say it now, If WorldCom would have gotten out of its own way they could have ruled telecom i

      • Yes and yes. Companies today are being managed by MBAs who don't know a fucking shit about the way business actually works, all they know about is "administration". MBAs never get into the detais, they only think in the big picture. If it isn't shown in power-point slides, then it doesn't exist. If fraud wasn't in the business plan, or if it wasn't mentioned by the marketing consultants, it doesn't exist.

        Why was the above modded as "funny"? Aside from the "fraud" slight, it seems to be pretty accurate.
    • Re:Wow. (Score:5, Insightful)

      by intermodal (534361) on Sunday July 27, 2003 @07:18AM (#6543802) Homepage Journal
      At first glance, it seems that way. But upon examining the scheme a bit closer, I noticed the caller-ID flaw in the scheme. By exploiting contracts with other local companies to avoid paying their competitors, it looked like local traffic in many cases. The modified ones that made competitors pay, though, were likely slowly increased as time went on. It's definitely a case of severe forgery or fraud of some sort, but it's hard to detect that on a packet. How is one to tell whether a packet was really sent from 214.123.44.53 and not from 23.45.54.138 when on the internet if the packet header was modified? the records of this alone would take up incredible amounts of space per day, not to mention the resources matching up each call daily would take. That'd be like checking the route of every IP packet sent through a point on the backbone each day. Sheer volume gave them enough obfuscation for a long time.
      • Re:Wow. (Score:5, Informative)

        by Mister Transistor (259842) on Sunday July 27, 2003 @09:16AM (#6543954) Journal
        Acutally it wouldn't be quite that bad; all they need to check is the beginning and end of the call, and verify that the source and destination were correctly specified for the confirmed call from here to there... If the source and "here" don't match - fraud alert!

        The calls that were switched onto another LD carrier would be much more difficult to backtrace, because they would all show origination from whatever local office they were transferred through. They most likely had forged source information that showed the origination as the local office that they were first illegally transferred to. That's a double whammy, not only are they getting out of termination tarrifs, but they are actually using their competitor's infrastructure for free and charging the termination fee to them to boot! Wow.

        • Re:Wow. (Score:3, Informative)

          by isdnip (49656)
          I'll explain *specifically* what I witnessed myself, as a recipient of these calls.

          My home phone rang, and I read the caller ID. It was an unfamiliar local number, showing no name, just the city. The caller, however, was in another city. He was making an ordinary LD call using his local phone company (no VoIP hacks) and MCI as the LD company. I specifically noted this on two different occasions, with the caller's real locations on opposite sides of the country (NY and CA).

          The local number at my end be
    • Re:Wow. (Score:4, Informative)

      by Tsu Dho Nimh (663417) <abacaxi@hotm[ ].com ['ail' in gap]> on Sunday July 27, 2003 @07:19AM (#6543803)
      The billing is very automated, and relies on coding inserted by the equipment to settle the bandwidth charges on the backbone carrier networks. The investigation is looking into allegations WorldCom/MCI would sneak their calls into rival LD networks via small local-only networks, and even did what appears to be the equivalent of "relay rape" where possible so ATT Canada got hit with the LD charges.

      Justice Department officials have evidence that MCI may, in effect, have "laundered" calls through small telephone companies, and even redirected domestic calls through Canada, to avoid paying access fees or shift them to rival long-distance carriers, according to people involved in the investigation.

    • Yes. I work part time for a telco consulting company that finds money for the telcos. They look at the system and find places where billing is non-existent. A friend who works there has found multiple millions of dollars in billings basically lying there waiting to be found.
  • by Anonymous Coward on Sunday July 27, 2003 @06:29AM (#6543726)
    I think it goes without saying that MCI has a terrible history of high level executive decisions to commit fraud, undermine various regulatory agencies and now stealing service from various other carriers. What's of more concern, however, is how many corporations engage in this sort of activity and evade detection.

    On a lighter note, perhaps MCI will change their name again after this is all behind them? :-)
    • And let's not forget trespassing too - a couple of years ago, they started laying fiber in Carmel, Indiana without talking to the landowners, figuring they could get it into the ground before anyone could say anything. A lady happened to come out and actually see them laying fiber on her land, threatened the work crew with arrest for trespassing if they didn't leave right then and then got an injunction to permanently stop the work. Worldcom then had the gall to whine about losing millions per month becaus
    • On a lighter note, perhaps MCI will change their name again after this is all behind them? :-)

      Of, course. Back to WorldCom again to avoid the taint of MCI's shady deals. :) It appears this company is just bad to the bone, no matter what you call it, and it's not just due to the buyout by WorldCom. A number of people that I went to college with were gung-ho when hired by MCI but were quickly relieved of their idealism. (There, but for the grace of God, go I.) After interviewing with them, I was less

  • (OT) Google.. (Score:5, Interesting)

    by \\ (118555) on Sunday July 27, 2003 @06:30AM (#6543728) Homepage
    I know this is off topic, but I find it interesting that Slashdot used a Google referer url in it's story. I mean, it's obvious Slashdot isn't Google, and while I'm happy to use the link, I wonder if the NYT will be happy about it, and/or do something about it.. this'll be an interesting one to watch, I guess.

    (Maybe Slashdot can become an NYT partner..)
    • Re:(OT) Google.. (Score:5, Interesting)

      by brocheck (59415) <.gro.gultas. .ta. .kcehcorb.> on Sunday July 27, 2003 @06:51AM (#6543759) Homepage
      This is not necessarily as off-topic as you might think.

      MCI defrauds other websites by pretending its long-distance calls are actually local calls.
      Slashdot defrauds other websites by pretending its someone else.

      Though to be honest, you could (last I checked) put slashdot in there and it would function -- but you could also put in 'ILOVEABIGPENIS' as a partner and it would show the article as well, so maybe that doesn't say anything afterall.
    • Is the NYT really being defrauded, though? The page still comes up with ads, so the advertiser revenue is still there.. It's not like we're getting a premium subscriber page with no ads, or special paid content...

      • Re:(OT) Google.. (Score:2, Interesting)

        by ergo98 (9391)
        They really are. Sites like the NYT that require a free subscription often do so to provide a reader profile to their advertisers, and it is used to show the ads to the appropriate people. i.e. Ads for goods and services only available in the US aren't giving value to the advertiser when viewers from around the globe are seeing them, for instance.
    • Acutally, I'm glad they did! It saved me the time that it usually takes to go into the story, and find the (-1 Redundant) post that has the partner link in it!! Thanks!

      Website registration sucks, anyway. They just feed the harvested data to some annoying form of spammer scum, anyhow.

  • accounting? (Score:5, Insightful)

    by mandalayx (674042) * on Sunday July 27, 2003 @06:35AM (#6543736) Journal
    The central element of MCI's scheme, people involved in the inquiry said, consisted of disguising long-distance calls as local calls to avoid paying special access tariffs to local carriers across the country. Those tariffs are the largest single source of MCI's costs for carrying calls and data transmissions.

    Accounting? Looks like just lying to me.

    Justice Department officials have evidence that MCI may, in effect, have "laundered" calls through small telephone companies, and even redirected domestic calls through Canada, to avoid paying access fees or shift them to rival long-distance carriers, according to people involved in the investigation.

    Remember, though, that MCI was Worldcom. (Worldcom changed their name to MCI).

    "We were told that Project Invader was an exploitation of a tariff loophole, a trick. We kept the project a secret. The traffic was ramped up slowly to avoid detection."

    Seriously, 'Project Invader'? Who comes up with these project names? Are you just asking to be caught?
    • Re:accounting? (Score:3, Informative)

      by rfmobile (531603)
      Remember, though, that MCI was Worldcom. (Worldcom changed their name to MCI).
      read the article - it states this began in 1994 at MCI before it was bought by WC.
      • Re:accounting? (Score:3, Informative)

        by mandalayx (674042) *
        right, then after the debacle, WC tossed the name and went back to MCI.
        • I think they are running out of names now... let's see, MCI to WorldCom, then WorldCom to MCI.. Now what? MCI to... ah, perfect! AT&T Canada.

          Screw ss7 spoofing, just confuse the heck out of the billing departments..
    • Accounting? Looks like just lying to me.

      Hmmm... What's the difference?

      • Accounting? Looks like just lying to me.

        Hmmm... What's the difference?

        Accredited professional lying is reserved to MBAs and statisticians -- totally different fields from accounting. :)

    • At least use their proper name. It's obviously WorldCon.

  • spoofing ss7? (Score:5, Informative)

    by Anonymous Coward on Sunday July 27, 2003 @06:38AM (#6543742)
    please.

    What does spoofing ss7 point codes have to do with this?

    Oh, you can't really spoof ss7 point codes, otherwise the return ( cells? ) have no way of getting back to you, so how do you expect to terminate a call? hmmm?

    dumbass.

    get some clue before you write about telephony related things.

    oh, every facilities-based provider gets around getting billed for access, especially when you're talking about intrastate calls. ILEC will bill you roughly 3.5 cents a minute, new CLECs do the same thing, older CLECs charge more but will have to reduce their access costs.

    for interstate calls, you're getting hit for half a cent a minute.

    there is a document on this somewhere on the fcc site describing how the rates have to go down, and what the rates have to be for intra/inter state access charges.

    get some clue.
  • by shoppa (464619) on Sunday July 27, 2003 @06:40AM (#6543743)
    The amazing thing about Worldcom and Enron is that they cheated, lied, and stole, yet they still went bankrupt.

    How do the honest companies ever stay in business, much less turn a profit?

    1. The cynical part of me says that the remaining companies aren't necessarily more honest, they're just better at avoiding getting caught. Or just plain luckier. Or maybe they place more bribes at the right places.
    2. The not so cynical side of me says "thank God I'm not in that industry" but who knows where the axe is going to fall next?
    • by frdmfghtr (603968) on Sunday July 27, 2003 @06:52AM (#6543763)
      How do the honest companies ever stay in business, much less turn a profit?

      1. The cynical part of me says that the remaining companies aren't necessarily more honest, they're just better at avoiding getting caught. Or just plain luckier. Or maybe they place more bribes at the right places.


      The honest companies don't have to spend millions on litigation brought about by cheating; they don't get caught because they haven't done anything wrong.

      • The honest companies don't have to spend millions on litigation brought about by cheating; they don't get caught because they haven't done anything wrong.

        There are still honest companies? The honest CEOs, who have a genuine concern for the company, get *replaced* because they aren't pumping the stock to double-digit, short-term increases like the fraudsters are. And which type of CEO is the one praised in the press and rewarded with millions of dollars by the board of directors?

    • It's almost like Homer Simpson, "he stole, slept on the job, he was even rude to the customers, but there goes the best convenience store attendant that there ever was". (well not really like).
    • by mangu (126918) on Sunday July 27, 2003 @07:46AM (#6543841)
      Let's face it, fraud is a hard job. It's much easier and more profitable to be honest. It's more expensive to hire the lawyers, accountants and MBAs needed for fraud rather than the engineers, programmers and technicians a company needs to do an honest job.
      • by Guppy06 (410832) on Sunday July 27, 2003 @09:59AM (#6544019)
        "It's much easier and more profitable to be honest."

        Only in the long term. Other costs of fraud (like the lawyers you mentioned) don't come into the picture until months or years after you got your first ill-gotten gains.

        Sure, it's ultimately cheaper in the long term, but somehow I don't think the average day trader gives a damn about long-term profitability...
    • Maybe the reason is that companies only turn to fraud when they are already in trouble, in an attempt to delay the inevitable. Well-run companies have no need for it.
    • I think most corporate frauds are because of stealing from the investors, not stealing from other companies or individuals. (This phone charges thing is an exception.) So the executives or a small group of investors steal money from the majority of investors, or from the company (which is owned by the investors). The company goes bankrupt because of the fraud. The guilty parties weren't stealing or lying to keep the company afloat (except in the short term), but to line their own pockets.

      Truly 'corpora
    • The amazing thing about Worldcom and Enron is that they cheated, lied, and stole, yet they still went bankrupt.

      Easy--good/competent people with solid businesses don't need to lie, cheat or steal. Also, liars grossly underestimate the extent to which their lies cost them in credibility, which in terms costs them in almost infinite but intangible ways.
    • They went bankrupt because of simple free market economics.

      Where there's fraud and corruption, there's someone trying to make a buck through means other than hard work. A company whose executives would rather lie and cheat than to put in an honest day's work, is a company that has learned to avoid competing. The avoidance of competition breeds incompetence.

      I work for a government contractor, in a field where there's only a couple of competitors left. The government simply hands out contracts in turn to
  • Has the worldcom stuff been settled? I don't know what is happening with that case...

    KOalaBear33
  • Overhead (Score:2, Interesting)

    by sami lavikko (313897)
    Even though this suspected fraud happened over a decade, it gets me thinking just how much overhead telephone companies have on their calls, there's probably atleast three layers of cream and one for the actual costs on phonecalls.
    • Re:Overhead (Score:1, Insightful)

      by Anonymous Coward
      If they were not billing customers per minute, the cost would be negligible. Internet traffic costs less than a dollar per GB, to any destination in the world. 1GB is roughly 18 hours at excellent quality (ISDN 2x64kBit/s) or about 5 days at cellphone quality (2x9.6kBit/s) -- as long distance as you like. If the subscription fee pays for the last mile (which is the only difference compared to internet traffic), then the long distance price should be well below 0.001 $/minute. The only reason for billing per
      • The systems and software that measure usage, collect the data and generate bills are a substantial part of the cost of running a telephone network. That is one of the reasons that ISPs have avoided this business model.
  • by Anonymous Coward on Sunday July 27, 2003 @06:50AM (#6543758)
    So does this make MCI the most successfull hardcore Pheaker in history?

    What would ss7 spoofer be called? A plaid box?
  • (I am not a telecoms specialist, this is second-hand knowledge...)

    Most billing systems in telecoms infrastructure work on trust to some extent. That is, billing is based on information such as the originator address, but many telecoms systems do not verify this kind of data except in a limited way.

    In a general sense, once you are on a telecoms network, your partners trust you to play fair, but there is not a general paranoia. Historically this was because nationalized telcos had no reason to cheat.

    This is a particular headache for SMS operators, since it is relatively easy for fraudulent operators to send SMS traffic with spoofed originating addresses. The traffic is either billed to the wrong parties, or at the wrong rate.

    Obviously whenever this kind of fraud gets uncovered, people tighten up their security. But often the cost of doing this is so high that it's a last step, not a first one.

    Think of unsecured email and you get a fair analogy.

    Perhaps a telco insider has a better view?
  • by greensquare (546383) on Sunday July 27, 2003 @06:56AM (#6543772)
    Of all of the telephone companies that have lied to me while trying to sell me service, MCI was the most boldface lier.

    I guess It's not surprising that they tried to cheat their competitors too.

    We've never had MCI. Once they called, and told me wife that they were going to give us $20 to make up for all of the long distance phone problems we'd been having. When the verifier comes on the line [to verify that we wanted to switch to MCI], just say yes to all the questions.

    I avoid MCI and AT&T. They are both liers.

    Kevin
    • Let's hope they don't pull an Enron and start all of the sudden shredding all their old logs.
    • by sllim (95682) <`ten.knilhtrae' `ta' `ecnahca'> on Sunday July 27, 2003 @07:27AM (#6543812)
      That is nothing.
      I had a friend that worked for a company that did cold calls to retailers to distribute sporting goods.

      She was taught the following.
      She would be given a lead. The lead would have a contact name, address and telephone number on it.
      She would call and say:
      "I am calling from such and such. You guys ordered a quantity of sports jersey's from us 2 weeks ago. I am very sorry for how late the delivery is, but we seem to have some confusion with your address."

      At which point she repeats the address (intentionally screwing it up) to the hapless employee on the other end of the phone.
      While she is at it she also 'double checks' the payment and billing information.

      She says 'Thank You' and hangs up the phone.

      BLAAAAM now how is that for evil?

      Now I used to do something that I don't think is nearly as evil as that. I used to work for a Window manufacturer and installer, Appleby Windows. For the most part they were honest. They didn't do scams like I described.
      As a matter of fact I was encouraged to purge the schedules of single owner retired people cause it is just too sleazy to send a rep out to people like that.

      My job worked something like this.
      I had a territory that I was responsible for, say Allentown Pennsylvania.
      I had a number of sales reps in that territory. Each rep was promised to have 1 lead a day M-F and 2 on Saturday. So I needed to supply a total of 7 leads a week for each rep.
      Now these reps are pure commision. No sale, no eat. So they took those 7 leads dead serious.

      Well anyone that has done this sort of work can tell you that crappy appointments are a real problem. Reps get to houses and they are stood up, a homeowner isn't present, it is a rental.. blah, blah, blah. There are a ton of problems that can make the trip out to the house by the rep a waist of time.

      To resolve this problem we would have callers intentionaly overbook the schedules. Then I would call each home and 'confirm' the appointment with the homeowner. I was trained to firm up the appointments and to qualify them. If they passed my approval they got put on the schedule for that night.

      Well I was required to have a demo rate of 85%. 85% of all my leads had to be saleable, no they didn't have to sell, but the reason they didn't sell must be on the reps end and not mine.

      What this all turns into is that in order to give a rep 7 leads a week I actually have to book like 9 or 10. That way he gets 7 leads in spite of 15% of the ones I supply being crappy.

      Sorry this is dragging on, but the evil thing I did wouldn't make any sense unless you understood the motivation for it.

      So what happens when none of my leads are crappy and they are all good? We end up standing up good, qualified customers who just might buy our product.

      So once I decide that everything is cool and I need to blow off the appointments here is what I did:

      'Hello Mr Smith?'
      'Yeah this is (insert my name) I am calling from Appleby. I am looking for my rep, Fred Wilson. I apologize for disturbing you during your estimate, but this is something of an emergency.'

      At this point Mr. Smith's reaction varies. Some people are confused, others pissed - whatever I didn't care.

      I try to say the next bit with a combination of relief, concern and if I can muster it just a little bit of distraction, like I am juggling stuff in an emergency situation.

      'Oh dear he isn't there?!?! Ummm... I'll tell you what Mr. Smith this might just be good news.
      But I need a favor.
      Fred's son was just involved in an automobile accident. Apparently he is hurt pretty bad. Fred's wife is hysterical and trying to contact Fred. Fred carries a cell phone and I bet that she contacted Fred after she contacted me.
      I can't blame Fred for standing you up, I think I would have to, all things considered.

      But Mr. Smith if you could please promise me that if Fred shows up you will tell him just to contact his
      • Fred's son was just involved in an automobile accident. Apparently he is hurt pretty bad.

        Yeah, I think you get 225 years in the Acid Room in Hell for that. Each offense.
    • Oh I don't know. AT&T actually did send me a check for $75 once for switching to them. A real, honest to God check, not some credit or some other BS.
    • We've never had MCI. Once they called, and told me wife that they were going to give us $20 to make up for all of the long distance phone problems we'd been having. When the verifier comes on the line [to verify that we wanted to switch to MCI], just say yes to all the questions

      That would have been a scam by the contractor. It does not excuse MCI of responsibility of course but you are quite likely to get a call from the same contractor to get you to switch to AT&T.

      What a lot of contractors used to

  • by jerryasher (151512) on Sunday July 27, 2003 @06:56AM (#6543773)
    This is somewhat off topic, but only somewhat, ...

    I want to ditch my local carriers entirely. They are too expensive by far and it's a monopoly I don't like (SBC.)

    I want a cell phone as big as a class touchtone phone. Big buttons that my kids can use. A devoted 911 button. Real big phone. Weighs a few pounds. So big that you can't toss a book on top of it. It plugs into the wall for power. It's big and has a the best sound quality. And it has a built-in super duper antenna so that it always has five bars of reception.

    Now it would be even better if it could share the same number as half a dozen other cell phones. When one rings, they all ring. It wonderful if I could stick a fax or modem jack into it.

    Why can't I get that?
    • CellSocket (Score:4, Informative)

      by cameldrv (53081) on Sunday July 27, 2003 @07:03AM (#6543779)
      You might want to look into getting a cellsocket. It's not exactly what you are asking for, but it's a cradle for your cell phone that charges the battery, provides an external antenna hookup, and plugs into your phone jack. You can then use regular phones in your house, and it will send the call through the cell phone.
      • Re:CellSocket (Score:3, Interesting)

        by jerryasher (151512)
        Thanks for pointing that out.

        It's close. It's too expensive (I mean a BIG, EXTERNALLY POWERED cell phone should cost LESS than a SMALL cell phone with EXOTIC batteries). It also isn't compatible with my current phone and their 2002 copyright and compatibility only with Nokia makes me wonder how they and their product are doing.

        But I like it -- it helps confirm to me, that I am not totally crazy.

        Thanks!
    • Nokia already has [nokia.com] such contraptions... you can plug in any POTS compatible device into them.
    • A devoted 911 button.

      Yeah, good idea. One button that summons a paramilitary response, and gets you arrested if you hit it by accident.

  • Alrighty then (Score:5, Interesting)

    by Rhinobird (151521) on Sunday July 27, 2003 @06:57AM (#6543774) Homepage
    I think this make it official. Working in the telecom industry is now a shameful thing. Kinda like saying you're a used car salesman or something.
  • by glenrm (640773) on Sunday July 27, 2003 @07:30AM (#6543817) Homepage Journal
    Nothing says "News for Nerds" like "accussed of accounting fraud", this just seems like news for some other site to me...
    • Re:Accounting Fraud (Score:5, Interesting)

      by Anonymous Coward on Sunday July 27, 2003 @07:50AM (#6543846)
      Concidering we're the largest internet backbone in the world, I think some people might be interested. Especially if they break us up and start selling off the pieces.

      I've survived seven layoffs so far. Might as well go for eight :)
  • by Anonymous Coward on Sunday July 27, 2003 @07:37AM (#6543832)
    and upper management jailed for 20+ year sentences after corporate misgivings are proven.

    Let's face it. We, the working people, have been screwed for years under the "we're doing this for the shareholder" mantra. We've been asked to take pay cuts, work longer shifts, work weekends unpaid. Meanwhile, this is done not for the shareholders, which see no real increase, but for the top executives who use that extra productivity to support their continued bonus plan.

    This has always been about bonuses for execs. This story proves that even more.

    The only difference between organized crime and corporate America is where they get their suits tailored.
    • We need government that is not soft on crime. We got a government that is unbelievably soft on White Collar Crime. There is no telling how expensive White Collar Crime is to the economy. Kinda ironic, white collar criminals make a fortune and face little sanction. Let some poor person rob a few thousand dollars from the same company with burglary. Both belong in prison, but the white collar criminal, who is far more destructive to society, gets a slap on the wrist.
    • Certainly I think the threat of having a corporate charter revoked might encourage Directors to ensure that everything is above board. And I think that in extreme cases this is warranted. But---

      Who are the actual owners of MCI? Did they have any knowledge of this? Should they be deprived of property just because the execs (who they indirectly hired) cheated someone else? While revoking charters certainly doesn't go beyond the idea of limited liability for investors, it could have a chilling effect int
  • Sad to hear (Score:2, Funny)

    by cflorio (604840)
    I always thought that the evil greed was with Worldcom, not MCI. From reading the article, it sounds like this started with MCI long before the merger. I was hopeing it was one of the other companies Worldcom of Borg assimilated. Wiltel or MFS or someone else.
    • > I always thought that the evil greed was with Worldcom, not MCI. From reading the article, it sounds like this started with MCI long before the merger. I was hopeing it was one of the other companies Worldcom of Borg assimilated. Wiltel or MFS or someone else.

      Unfortunately I think evil greed is probably the norm rather than the exception. I used to work for a small Pa&Ma shop where the Pa was president of the local Association of Christian Businessmen, and whenever he was doing work for cost + c

  • Those tariffs are the largest single source of MCI's costs for carrying calls and data transmissions.

    Does anyone else find this really irritating? That a tax is the single largest cost they face? It seems to me that the government is the real problem here: IMO, good for MCI for trying to keep more of its hard-earned money away from the gaping maw of Uncle Sam.
  • there's only ONE reason this news scares me: my girlfriend and I use MCI Neighborhood Plan thing to talk for an unlimited time at a flat monthly rate. I sure hope that this flat rate thing doesn't disappear, we can't afford to talk as much as we want if that's the case. Is it?

    I *do* think it's pretty l33t what MCI has (allegedly) been doing, as a purely technical fascination.
  • by release7 (545012) on Sunday July 27, 2003 @08:24AM (#6543889) Homepage Journal
    I understand how this must look to the general public. But I can tell you, if you were in my shoes, you'd do exactly the same. Keeping up with the Joneses in my neigborhood gets very expensive and I've got three kids all looking to go to Ivy League colleges. The bonuses I raked in for this scheme were more than enough to cover this and put a new down payment on a beautiful home in White Plains. What are you doing to ensure your family prospers?
    • I understand how this must look to the general public. But I can tell you, if you were in my shoes, you'd do exactly the same. Keeping up with the Joneses in my neigborhood gets very expensive and I've got three kids all looking to go to Ivy League colleges. The bonuses I raked in for this scheme were more than enough to cover this and put a new down payment on a beautiful home in White Plains. What are you doing to ensure your family prospers?

      Well, your Executiveness, I'm currently trying to get an int

  • by Krapangor (533950) on Sunday July 27, 2003 @08:31AM (#6543897) Homepage
    The Bush goverment is just persecuting MCI for political reason. Their narrow-minded morale doesn't allow any creative accounting and business methods.
    It's time for all accounting nerd to stand up and show their support !
    First, we need some "free MCI Worldcom" bumper stickers and t-shirts. This wouldn't of course have any effect on the lawsuit, but we'll feel all great and warm inside.
    We might also organize some protests in Washington nobody notices.
    And when the MCI management comes out of prison we can all rush to buy their new book "Art of Fraud: Controlling the human element of accounting".
  • Just how many major crimes do you have to commit before it ceases to be a civil matter in this country ? Just how many people do you have to harm before its considered criminal or is that just reserved for people that download songs ?
    • Just how many major crimes do you have to commit before it ceases to be a civil matter in this country ? Just how many people do you have to harm before its considered criminal or is that just reserved for people that download songs ?

      Welcome to the new America, where greed is considered a laudable corporate trait and even many slashbots rush to defend corporate amorality. It is the new order. Orwell was just off by a few decades.

  • by ethaz (413842) on Sunday July 27, 2003 @10:10AM (#6544038)
    OK, we have Bernie Ebbers cooking the books. We have Sidgemore lying about "Internet traffic doubles every 90 days" and now we have MCI (pre-WorldCom) engaging in organized theft.


    If any company ever deserved the death penalty, it's this gang of thieves. Do NOT let WorldCom/MCI/UUNet emerge from bankruptcy. Liquidate the company instead.

  • Nice timing (Score:2, Funny)

    by Rhone (220519)
    This article has funny timing for me, since I had just dealt with MCI's fraud protection (I think that's what it was called) department a little under a month ago.

    I moved into an apartment after graduation, and tried to get phone service from another phone company, but MCI still had their service on the phone line from the previous tenant. They denied responsibility for the phone line, saying they had cancelled it.

    A few long distance phone calls with no one to bill finally got their attention. Idiots...
  • Having spent US$60 trying to get MCI to shut down a virus infected host that was continually hitting me with multi-hundred kB emails [slashdot.org] (to no avail), I say, "MCI is in trouble? GOOD!"

    The three constituant parts of this hydra (MCI, WCOM, and UUNET) each have a long history of irresponsiblity to the community - an attitude of "Screw you! We are making money any way possible! You No Likee? Suck ME!". UUNET hosting pink contract spammers, MCI screwing other phone companies, the whole WCOM stock deal.

    I hope they
  • How it really works (Score:5, Informative)

    by ZPO (465615) on Sunday July 27, 2003 @10:56AM (#6544256)
    Here is how something like this typically works.

    First, how is it supposed to work. SS7 pointcodes are like the IP address of a telephone switch. Messages are routed through an SS7 network that runs between switches to route calls, identify the source and destination information, and generate billing data. There are rather simple ways to conceal the origin of these calls. The ILECs (who own the InterLATA tandems) have gotten their friends, the state PUCs, to continue with quite high orig/term interconnection tarriffs. This is a huge source of revenue for them. The original concept was to pay for the large upfront expenditures to install the interlata tandems with the breakup of AT&T and the entrance of the new (at the time) IXCs. Those switches (and the required capacity upgrades) have been paid for hundreds of times over. When you consider $.05/min long distance and the orig/term fees are $.03-.04/min for both ends you see the IXC isn't exactly making much. Its a little present to the ILECs from the PUCs.

    Many companies are doing this today via what is known as the "enhanced service provider exemption". In short, this states that Inter-LATA traffic which is carried across an enhanced services network (VoIP, VoATM, VoFR, etc) is not subject to InterLATA termination fees at the distant end of the call. The rules are pretty vague here and there doesn't appear to be a minimum percentage in the quantity of calls which must be handled by the enhanced services network or a percentage of the overall call distance that must be handled by the enhanced services network. What you get is folks that buy some to handle perhaps a T1s worth of trunks, place them next to each other in the rack, and route a few calls through it within a single office. Under the current rules they now operate an "enhanced services network" and are thus exempt from paying the orig/term InterLATA tarriffs. There is at least one large calling card provider (especially catering to the Hispanic population in the US) that does exactly this. The company then finds a friendly CLEC to allow them to dump their calls into the local network via MF (tone signalled, non-SS7) trunking and the origin of the call will appear to be a local number.

    In the old days (pre-1999) there were several companies doing this without bothering to claim the enhanced service provider exemption. I've personally seen companies locate in a CLEC colocation facility and house nothing but a patch panel in a closed cabinet. MF trunks from IXCs (long distance carriers) are brought in on one side, and MF local-access trunks head out the other. This is also known as "dump and term".

    When you're MCI (WorldDom) this becomes trivially easy. MCI owns at least 2 CLECs. WorldCom bought Brooks (I ran local operations in 2 cities for Brooks) shortly before the MCI deal. They also bought MFS several years before that. It would be a very simple matter to use an intermediary in each LATA to launder the traffic via MF trunks back into their MFS/Brooks switches and then pass them off to the ILEC (incumbent local exchange carrier) as what appear to be local calls. There isn't any high-tech SS7 munging required here.

    This could also be accomplished via some sexy work with SS7 on a switch. It would be like NAT and would rewrite the originating point code and phone number to a local one. The same SS7 hardware would take the messages coming back and rewrite them to go to the proper switch. We do NAT with IP addresses every day. Its not a large stretch to imagine doing it with SS7. I don't see much of a need to though. There are much simpler ways to accompish it.

    Hell, if MCI/Worldcom doesn't mind the exposure just run the MF trunks between local and LD switches without the intermediary. It opens up a huge liability hole, but it may have been deemed acceptable.
    • by jrp2 (458093) on Sunday July 27, 2003 @01:55PM (#6545393) Homepage
      Nice post, you do cover the scam well.

      I guess one thing I disagree with is the use of MF (or, in North America, usually DTMF to be precise). Not necessary, this is done all the time with ISDN trunks from CLECs (or even ILECs). You get the same effect on a PRI by not providing a CallING Party IE (CallerID in Q.931-speak) in the SETUP message, it will just assign the billing number as CallerID if it is not provided (or if they validate CID and what is provided is not valid for that trunk).

      These calling card operators order up PRIs in all the major markets, as if they were a local business user. They bring in the calls via VoIP, then terminate them using their network of local PRIs. The terminating gateways either strip, or fudge to their local directory number, the CallING Party IE. As far as the ILEC (or CLEC for that matter) is concerned, the call is a locally originated call by a legit local business.

      Most (all?) of the VoIP termination gear has extensive features to spoof CallerID for this very reason (and for telemarketers, of course). I have even seen folks "randomize" CallerID.

      Anyway, did not intend to debunk your explanation, it was quite accurate. Just know that this same concept is done all the time with very simple spoofing in ISDN. ISDN can be obtained very cheaply from any desperate CLEC, is more reliable, shorter connect time (PDD), requires less DSPs in the termination gear (reduces capital costs), and is TRIVIAL to spoof in almost exactly the same way as non-FGD tone-based protocols as you described.

      Now that is the US (and Canada, Australia, Western Europe, etc.). I am constantly surprised by the crazy shit they do to get calls into places like India, Bangladesh, Africa, etc. ;) It is like a telecom variation on the movie "Catch me if you can".
      • by ZPO (465615) on Sunday July 27, 2003 @07:17PM (#6547219)
        You're absolutely correct. Now that you remind me I think the calling card operator was using PRIs. In that particular case they were running the PRIs back to another state to be terminated in their switch. Their initial install had been done before I took over the market in question. When they went to add another 28 PRIs I (under advice of counsel) asked the sales rep to get a signed statement from them that they were operating a network which qualified under the "enhanced services exemption" rule. That was not a happy sales rep!

        I'm not a big fan of the origination/termination tariffs for LD calls. If you look at the pricing on LD plans you'll almost always see a lower rate for interstate than intrastate. Its the same LATA tandem terminating both calls on exactly the same hardware. The difference is what the PUC has granted the ILEC (RBOC) on intrastate calls ($.025-.05/min) vs. what the FCC has set as the rate for interstate calls (?? ~$.005/min). An average of $.03/min starts adding up rapidly when you've got millions of channel/minutes per day. There is no technical difference so the only difference is regulatory.

        Take it another step and look at the traffic settlements of most CLEC/ILEC interconnection agreements. The ILECs screamed until they got them put into the interconnection agreements. They expected a huge profit center. When the CLECs started signing up all the ISPs the ILECs screamed about "abuse of their network" amazing the difference in "fairness" to the ILEC mind between depositing the checks and having to write them. Even with settlements, they are pretty low. IIRC, $.0002-.0005/min for direct EO term, higher plus mileage for access tandem termination. It varies for each interconnection agreement. If the IXC owns a CLEC and terminates the call either directly to the EO (end-office - also known as LSO) or even via the access tandem then why should the interconnection tariff be 5-10 times higher? Its all in the regulation folks. I'm not sure what the solution is, but I'm very sure its not more regulation.
  • by swb (14022) on Sunday July 27, 2003 @11:47AM (#6544525)
    1) Inflate earnings
    2) Falsify expenses
    3) Slam 'n Cram Customers
    4) Cheat business partners
    5) Profit!!!

    Looking back, was the monolithic monopoly of the Bell System REALLY that bad?

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