Terms of Disservice

In my Sunday column I talked about why I’ve moved to VoIP, voice over Internet Protocol, for my domestic and international long-distance phone calls. I chose Packet8 over Vonage for several reasons, only one of which was price.

The other key reason had to do with a pet peeve: the terms of service. Packet8’s “Terms and Conditions of Service” could be better, but they were miles better than Vonage’s “Terms of Service.”

Now, I’m accustomed to ridiculous terms of service from the technology industry. Most of the time we end up with little or no choice — and virtually never do potential customers actually read this legal boilerplate that tends to give us no rights while explictly permitting the vendor to treat us as chattel.

In this case, the difference turned out to be stark. Vonage prohibits business use by residential customers.

I called Vonage to ask if any of its residential users were not, therefore, technically in violation of the agreement. After all, it’s impossible to imagine a home user of such a system not making, at the very least, an occasional call to the office.

A Vonage spokeswoman said the purpose of that language was to prevent people from “gaming” the system — that is, setting up such abusive things as call centers or fax-blasting operations that would amount to cheating. Trust us, said a spokeswoman, we’re not looking to bust our customers.

I believed her, and some of my friends are extremely happy with Vonage’s service. But she was missing the point that was a deal-killer for me — that Vonage reserves the right to change customers’ deals in mid-stream. No one using the service for a home office, for example, could be certain that Vonage wouldn’t suddenly decide that he or she was in violation, and order a change in service tiers.

Packet8, a unit of 8×8 Inc., had similarly restrictive terms of service when I first checked. Again, I asked some questions and pointed out that virtually all residential customers would be technically in violation.

Hmmm, said Huw Rees, vice president of sales and marketing of 8×8, those terms did look a bit Draconian. and the next day, they’d been changed. Now Packet8, which also sells an Internet videophone service, specifically permits “reasonable business use” by its residential customers.

True enough, Packet8 could also unilaterally decide that my business calls — maybe a dozen in a day when I’m working from home — are somehow abusive. But Rees, like his Vonage counterpart, said the goal was to prevent gross abuse.

Notice the difference. Both companies reserve the right to challenge customers whose calling patterns are abusive. But one starts by saying “No.”

I’m more likely to patronize businesses that start by saying “Yes.”

Reader challenge: Let’s collect all the most ridiculous or overbearing terms of service. Please post them in a comment here (note: just list the page URL on a line by itself, as blog postings here don’t recognize embedded HTML). Or send them to me by e-mail at and I’ll post them here. Thanks.


Posted by: joe on August 5, 2003 12:38 PM


Hush may terminate your access to the Service and any related service(s) at any time, with or without cause, with or without notice, effective immediately, for any reason whatsoever. Hush has no obligation to store or forward the contents of your account.

Posted by: on August 5, 2003 06:31 PM

I have to say, I do love Vonage. And being a student, I truly never make business calls – though your concerns about the draconian terms of service are certainly justified.

I also wonder, can numbers be ported from Vonage to Packet8? I had to change my phone # when I first signed up with Vonage, and while I’d like to switch to Packet8 because of pricing, I’m hesitant to change my # yet again.

Posted by: Eric W on August 6, 2003 08:14 AM

I used DSL for several years. Then Northpoint went bankrupt, and finally Telocity (DirectTV) dumped me and hundreds of thousands of users becuase they couldn’t become a monopoly. When it came time to find an new broadband provider, I had recieved such terrible tech support from SBC (the last mile provider for my DSL the whole time) I was determined to never deal with them.

So I went with (holds nose) Adelphia. It raised my cable bill $20. So not even SBC’s $29.95 per month, for the first year, DSL deal is even a close consideration. Who knows what it will cost after that first year is up? The competition should be dead by then if the government lets SBC have their monopolistic way.

DSL was great because it had a static IP address, but it was much slower than cable. I kept it anyway since it let me run Apache Web server on my Mac. Now I can’t, so I have to pay another web services provider a fee to have my web page. Such service! ISPs don’t need to offer adequate services when they have monopoly power. And we pay the price.

I hope some day I can just hook my computer up directly to the Internet and not have to let these monopolistic powers determine what I can and can’t do with my computer on the net. I know there are dangers to that, but I’ll take that over their trying to turn the Internet into another one-way cable TV revenue stream.

Why should the owners of the pipeline be allowed to control what flows through those pipes? Because they’re the ones with the money to sway political powers.

Posted by: on August 10, 2003 05:07 PM

Dan, no offense, but I find this particularly ironic, given:

“Although we do not have any obligation to monitor reader comments posted to this Weblog, we reserve the right at all times to review them and to remove any information or materials that are unlawful, threatening, abusive, libelous, defamatory, obscene, vulgar, pornographic, profane, indecent or otherwise objectionable to us in our sole discretion and to disclose any information necessary to satisfy the law, regulation, or government request.”

Posted by: Barry Ritholtz on November 19, 2003 12:35 PM

You should be aware that packet 8 — or someone reselling their services — is a massive spammer.
Next time you speak with them, please ask them why they are willing to use such a disreputable
form of advertising.

I would be very hesitant to promote them because of that . . .

Posted by: bbphone on December 12, 2003 11:01 AM

For more info on Packet8 and a $20 Packet8 discount coupon code, please visit http://solarice.typepad.com/packet8/

Posted by: Packet 8 on March 13, 2004 01:16 PM

I think Packet8’s terms of service are not different than any other phone company!

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