TEXAS LAWSUIT AGAINST VONAGE COULD DRIVE CHANGE IN VoIP 911

A lawsuit filed against voice-over-IP provider Vonage by the Texas attorney general last week has the potential to accelerate change in the VoIP industry's treatment of emergency 911 service, many observers believe.

At the center of Texas Attorney General Greg Abbott's suit is a Houston couple's daughter, Joyce John, who in February tried to call 911 on a VoIP line after her parents were shot by home invaders. After reaching only a recording telling her that 911 was not available on that line, she was forced to run next door to use a neighbor's standard phone line. (The criminals fled, and the parents survived.) Abbott claims Vonage does not make sufficiently clear to its customers the differences between its 911 service — which requires separate registration in addition to the service order and does not automatically identify callers' addresses to 911 operators — and the traditional kind. The attorney general wants Vonage to pay $20,000 per “violation” and to clarify more thoroughly and proactively, even in its television ads, the specifics of its 911 service.

“This is not just about bad customer service; it's a matter of life and death,” Abbott said in a statement.

A Vonage spokeswoman said the company notifies customers of its 911 service in several ways but is willing to work with Abbott to address his concerns.

The Houston story reminds some of the 1993 story in which the 18-year-old daughter of New York state assemblyman David Koon called 911 on her mobile phone during a car-jacking and died while the 911 operator struggled to locate the source of the call. With the assemblyman's help, that story helped push wireless 911 policy reform. The Houston VoIP case could similarly drive VoIP 911 evolution, said Yankee Group analyst Kate Griffin.

“It will help focus all the players on the problem and educate consumers who have been, to some degree, silent on this because their awareness is quite low,” she said.

John Melcher, former president of the National Emergency Number Association, put the Houston story front and center in his testimony to a congressional subcommittee on telecom and the Internet two weeks ago, calling for legislators to, among other things, compel incumbent carriers to grant VoIP providers direct access to their 911 networks. Though the E911 Act of 2004 calls for $250 million per year in matching funds to upgrade the nation's 911 technology, the money hasn't been appropriated yet.

And as VoIP providers reach out to a less-savvy mass market, the Houston case will light a fire under their efforts to not only offer E911 (about half of all VoIP subscribers get the service from their cable company, which typically offers E911 through its own CLEC certification; AOL said it will offer E911 with its VoIP service from day one) but educate consumers about it. Last week NENA completed a consumer education program that includes a new Web site, www.911voip.org, that tells consumers what questions to ask their VoIP providers about 911. NENA also plans to have TV, radio, print and billboard ads for which it will seek funds from the VoIP industry. VoIP providers could be more motivated on this front than ever, preferring to act on their own before regulators are pressured to interfere with the still-young sector.

“The FCC is taking a relatively hands-off approach to VoIP, wanting the technology to blossom,” said one VoIP industry member. “Something like this [lawsuit] could potentially push for some sort of regulatory action.”

TEXAS VERSUS VONAGE HOLDINGS

Texas seeks $20,000 “per violation” and permanent injunction against:

• Touting “911 dialing” or “911 service” without access to 911 networks

• Misrepresenting VoIP service benefits

• Failing to “clearly and conspicuously” disclose differences between traditional 911 and Vonage's and the need to separately activate the 911 feature

• Failing to verify at each point of sale that customers understand the instructions to activate the 911 feature and the differences between traditional 911 and Vonage's

Source: Texas attorney general's office