^{Democracy & Technology Blog} Paying for Porn

The Federal Communications Commission is looking into a scam involving the attempt by local phone carriers in rural areas to collect more access fees from the major long-distance providers by increasing the number of calls from “adult” chat lines.
Rural carriers have long received fees (up to 5 cents per minute) from long-distance carriers for every call they connect. The original intent behind this, of course, was to ensure that rural citizens have (subsidized) phone access. So when you make a call from New York City to your grandparents in North Dakota, Verizon pays an access fee to your grandparents’ local carrier for the connection. And the smaller you grandparents’ local carrier is, the higher the per-minute fee it gets to collect. So, unsurprisingly, some small local carriers figured out that they more calls they connect, they more money they will collect.
Hence, some rural carriers decided to sell local area codes to adult chat lines. That way every time someone calls the adult line, the rural carriers get a connection fee. Revealing how out of control all of this has gotten, one Senate staffer said recently:

To illustrate the success this program has had, consider this: in July 2005, the rural phone company in Wayland, Iowa showed 40,000 minutes of long-distance calls received; in December 2006, they showed 10 million minutes. Of those calls, half were to the same four phone numbers, all adult chat lines.

Family advocacy groups are upset, because such calls to regular area codes can not be automatically blocked. At least with the old 1-900 numbers, parents could automatically block such calls.
We hardly needed one more example of the unintended consequences of regulation. But here it is anyway.