ABSTRACT
Many VoIP clearinghouses try to operate as arbitrage carriers, buying and sell ing traffic on small margins to build volume. The pitfall to this is twofold. First, the often scant resources of the small clearinghouse are stretched to the limit and the arbitrage business begins to consume them, preventing the clearing house from implementing their real business plan — a VoIP business. Secondly, the risk in arbitrage is great and the margins small, so one small slip up can mean the end of the company. This is not to say that the arbitrage business should try to limit its exposure to bad debt at all costs. The cost of credit policies that are too conservative may inhibit the ability of the business to grow.
