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Tuesday, April 12, 2005

AG's Gone Wild! A Gathering Storm for Vonage?
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Tech Daily (subscription required) reports today that the Texas AG's consumer fraud suit against Vonage may be spreading. The AG's spokeman stated: [s]everal states have expressed an interest in the suit,..." I blogged about the stretch that Vonage's E-911 disclosures constituted consumer fraud here. Randy May responded to that post, taking a slightly more benign view of the Texas AG's action.

If the Texas AG's suit catches on, I do fear we are looking at a de facto E-911 mandate on VoIP, not just better disclosure. I went back to my Vonage "welcome materials" for my own account. Predictably in our litigation-senstitive world, Vonage is very clear about the service's E-911 limitations and sign-up requirements. Thus, there seems to me a very tenuous "consumer fraud" basis for the complaint.

But this will probably not stop AG's on a morally-charged public safety crusade. The politics are easy. Big, laudatory headlines of public-protecting AG filing the suit, followed by one of two outcomes. First, and most likely, Vonage folds up quickly making some token payment and agrees to do what it is already doing: make its VoIP E-911 systems more robust. The alternate outcome would have Vonage winning the suit because their disclosures do not come close to constituting fraud. But that is a small headline and years away.

Irony of irony has it that the VoIP E-911 limitations are caused in no small part because of the regulation-mandated architecture of E-911 systems, which dates from the 1960s.

posted by Ray Gifford @ 4:57 PM | VoIP

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