December 15, 2006

CONTACT: BETH STONE
(617) 727-2543

BOSTON -- Vonage Holdings Corporation, the nation’s largest provider of Voice over Internet Protocol (VoIP) telephone service, will upgrade its 9-1-1 service and better inform subscribers about the limitations of VoIP as part of a settlement with Attorney General Tom Reilly and five other states. 
 
The settlement, filed today by Massachusetts, Texas, Illinois, Michigan, Florida, and North Carolina, addresses Vonage’s inadequate consumer disclosures about its 9-1-1 service. When the states began investigating in 2005, they found that Vonage failed to clearly disclose that customers did not automatically have the ability to reach emergency personnel by dialing 9-1-1. At that time, customers had to go through a separate process to activate the 9-1-1 feature. If customers failed to activate the 9-1-1 service when they signed up for Vonage service,  they received a recorded message if they attempted to dial 9-1-1 in an emergency. As part of today’s settlement, Vonage has agreed to automatically activate the consumer’s ability to dial 9-1-1 when they enlist its Internet-based telephone service.

“There is no time to spare when a person dials 9-1-1,” AG Reilly said. “While  new technologies have improved the way we communicate, it is crucial for consumers to fully understand the limitations of these new technologies so that they are prepared and can use them properly and safely. Vonage understood these risks, and has taken steps to better protect its customers in an emergency.”

Prior to the investigation, Vonage also failed to adequately disclose important information about the limitations of its 9-1-1 service compared to 9-1-1 service offered by traditional wireline telephone companies. For example, Vonage’s 9-1-1 service at the time did not transmit the caller’s telephone number and location information to the emergency operator. 9-1-1 calls made using Vonage’s Internet-based telephone service were not directly routed to emergency response personnel through the local 9-1-1 network, but were instead routed to an administrative line. In some places, these administrative lines were only answered during regular business hours or were answered by an Interactive Voice Response System. Despite these limitations, Vonage  promotions touted its “911 dialing” and advertised the service as a “replacement” for wireline telephone service.

Today’s settlement, formalized as an Assurance of Discontinuance and filed in Suffolk Superior Court, requires that Vonage obtain a physical address from consumers at the time they subscribe to the Internet-based telephone service. This address will be transmitted to emergency response personnel as the address of the caller. Because of its portability, Vonage must also inform consumers that each time they change where they live or use their VoIP telephone service, they need to update the address and that there may be a delay in updating the information.

The settlement also requires Vonage to disclose other limitations on its 9-1-1 dialing, including loss of access to 9-1-1 during power outages and when the  consumer’s broadband connection is lost.

Under the terms of the settlement, consumers who sign up for Vonage service online will see a disclosure of the full 9-1-1 limitations that is separate and distinct from other contract terms. They will have to check a box indicating that they have understood and accept the differences between Vonage and wireline access to 9-1-1 services.  For more information about the limitations of VoIP 9-1-1 service, please see AG Reilly’s consumer advisory on the web at www.ago.state.ma.us.