As we worked the knots out of the callback business, it began to seem that we were really on to something big. We were going to make it as a phone company. The big guys, the world’s phone monopolies, were really in trouble now. We were on a roll and we were sticking it to them but good. For close to a century they charged as much as they felt like. Now, with the money I’d raised from investors, we were able to compete with them all over the world. Our roster of clients went from dozens, to hundreds, to thousands. Suddenly, all over the world, from the capitals of Europe, to the jungles of Africa, to the rain forest of Peru—IDT reps were knocking on doors offering to undercut the local monopoly’s phone rate by two-thirds or more. Few prospective customers could turn down that kind of savings.

The world’s press had dubbed this a “David versus Goliath” struggle, one in which they felt David would soon be wiped out by foreign regulations. It wasn’t working out that way, though. We were now handling millions of calls. We had people working all night just to keep filling the fax machines with paper as new orders poured in twenty-four hours a day. Far from being wiped out, David was kicking butt. Maybe even feeling a little smug. That was when Goliath attacked.

AT&T’s petition to the Federal Communications Commission demanded that our service be declared illegal and turned off immediately. The FCC, it demanded, needed to stop our theft of service from AT&T before we harmed them irreparably. They claimed that every call that dialed in to signal a callback request and hung up without being answered utilized their network without paying them. This was theft of service, plain and simple.

Wait a minute, we responded. Nobody told AT&T and their foreign partner they couldn’t charge for uncompleted calls. This was their own decision in order to encourage more calling. We were just taking advantage of their own rules. Not only that, but every incoming nonrevenue-producing “signal call” triggered a revenue-producing callback. What were they complaining about? This was only a legal trick to maintain the high rates from overseas, which the foreign monopolies shared through a complex system called settlement fees with AT&T. Now AT&T and their foreign monopoly partners were using the theft-of-services argument to keep competition out of the marketplace.

There was only one problem. The FCC didn’t see it that way. According to our sources in the FCC, the ruling against us would come out at the end of the month, following which all of our lines would be turned off. All American phone companies would be prohibited from doing business with us. And AT&T would be free to sue us up the wazoo for damages.