Texas Sues Vonage Over Marketing of VOIP Service
March 22, 2005. The Attorney General of the State of Texas filed a complaint [14 pages in PDF] in state court in Austin, Texas, against Vonage alleging violation of the Texas Deceptive Trade Practices Act (DTPA) in connection with Vonage's marketing and sale of voice over internet protocol (VOIP) service.
The complaint alleges that Vonage has engaged in deceptive marketing of its VOIP service by failing to clearly inform consumers of the difference between its 911 service and "traditional 911 service".
The complaint does not seek to compel Vonage to provide any type of 911 service. Rather, the state of Texas seeks monetary damages from Vonage. It also seeks injunctive relief, to bar Vonage from continuing to engage in deceptive marketing practices.
Texas Attorney General Greg Abbott stated in a release that this complaint follows an incident in Houston, Texas, in which a Vonage customer tried unsuccessfully to reach emergency assistance during a home invasion and shooting.
John Melcher, Executive Director of the Greater Harris County 9-1-1 Emergency Network , testified at a House hearing on March 16, 2005 regarding this incident. See, Melcher's prepared testimony [PDF].
The complaint states that Vonage "markets its VoIP service as a ``replacement创 for traditional telephone service and specifically represents to consumers that ``Vonage works just like the telephone service you have in your home today创; that its VoIP service is ``an all inclusive home phone service that replaces your current phone company...创; and that ``this is like the home phone service you have today -- only better.创
It alleges that Vonage's "representations that its VoIP services replace traditional phone service are misleading, false and confusing because in fact, the ``911创 feature of its service is vastly different from the traditional 9-1-1 service which consumers in Texas enjoy and rely upon."
The complaint alleges that Vonagae "does not clearly and conspicuously disclose to consumers these very significant differences between its ``911创 feature and traditional 9-1-1 service." The complaint identifies four areas of difference.
First, the complaint states that "when a consumer using Defendant's VoIP service dials the digits 9-1-1 on his or her telephone, that call is not immediately directed to the appropriate local Public Safety Answering Point (PSAP) through the local 9-1-1 network because Defendant does not have interconnection agreements with incumbent telephone companies and has not contracted with other entities who have such agreements. Thus, a consumer抯 emergency call is routed by a private third party to the closest PSAP through the PSAP抯 administrative line. These administrative lines are regular business lines which have the lowest answering priority at these emergency call centers. In some locations, these administrative lines are not answered outside of regular business hours. In other locations, these administrative lines are answered by an Interactive Voice Response System which informs callers that if they have an emergency, they should call 9-1-1. Further, when the call is routed to the PSAP, the operator who answers will not know the telephone number and location of the caller. Therefore, if the caller cannot provide the address from which he or she is calling or if the call is disconnected, no emergency assistance will be sent."
Second, the complaint states that "unlike traditional telephone service, the ``911创 feature of Defendant's VoIP service is not automatic. Instead, after a consumer purchases and installs Defendant's system, he or she must separately activate Defendant's ``911创 feature by completing an online form and providing a home address."
Third, the complaint states that Vonage's "VoIP service and access to its ``911创 feature is dependent upon several factors that are generally not an issue with a standard telephone line. For example, traditional telephone service is powered directly by the telephone company through the telephone line. This system includes a backup for electrical outages so that when the electricity goes out, the telephone service is still operational. Defendant抯 VoIP service does not have a backup ..."
The complaint also states that VOIP service is "dependent upon a continuous broadband connection, making it susceptible to hardware and software malfunctions and traditional Internet restrictions such as network congestion. Similarly, Defendant抯 VoIP system is subject to Internet hackers and viruses that may result in a disruption in service. And unlike traditional telephone service in which carriers are required to provide consumers with notice prior to disconnection, no such notice requirement applies to VoIP service."
Finally, the complaint states that "one of the unique benefits to consumers
in purchasing Defendant抯 VoIP service, as advertised by Defendant, is the ability to
take the VoIP phone anywhere that has a broadband Internet connection. Defendant fails
to clearly and conspicuously disclose, however, that if an individual dials 9-1-1 using
his or her VoIP phone at a location other than home, the call will be routed to the
appropriate PSAP based upon the address information that Vonage has stored in its network
-- not the customer's actual physical location. As a result, the individual's call will be
routed to the wrong PSAP to provide emergency assistance."