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The Wall Street Journal (subscription required) discusses how regulators treat Internet phone service differently (Vonage, etc.) than traditional phone companies, which are regulated by the FCC and other government bodies. Basically, since VoIP (voice over Internet protocol) technology converts voices (phone calls) into data bits and sends them over the Internet like emails, the result is a “regulatory no-man’s land.”
Internet phone customers have increased to nearly 5.5 million from zero in 2003. This extreme growth has causes some issues. State commissions and federal agencies that have traditionally handled consumer complaints about phone service don’t regulate Internet calling. State attorneys general and the Federal Trade Commission have supposedly kept track of complaints about unfair or deceptive practices, though to date the FTC has not filed suit against an Internet phone provider.
In the case of Vonage, many customers say they are hit with cancellation fees regardless of a supposed free trial period. And then there are the discrepancies: Some say customer service had explained that there was no cancellation fee, even if fine print on Vonage’s Web site says otherwise ($40 fee after a 30-day trial period). Others explain that they have been billed for equipment. And yet another complaint is that customers can’t cancel in time because they had a hard time getting a hold of anyone at Vonage to cancel.
And this isn’t only apparent with Vonage, other companies such as Time Warner and Comcast have had similar issues reported. Thus, consumers are left with only two method recourse: switch providers in hopes that the poor service doesn’t follow or go back to traditional, more expensive, though regulated, phone service.