Client Rights Under VoIP Law

Business owners often want to take advantage of all the benefits that VoIP business phones offer. Too often they don’t over worry about the contracts and rules around VoIP.  What guarantees do businesses have from VoIP service providers? Who regulates VoIP services? Who enforces laws around VoIP phone systems?

Well, first off, you could go with a VoIP company that doesn’t try to lock you into long term contracts or have crazy End User License Agreements.  (Yes, that was a shameless plug for ourselves right there.) However, if you’re considering a provider who does insist on a Service Level Agreement or a contract for a given length of time, there’s some things to be aware of before signing.

Please note that nobody here is a lawyer.  We’re writing this for information and educational purposes. This blog post is not a substitute for legal advice.  Before breaking a contract, please talk to your business’s lawyer.

The FCC Regulates VoIP And Will Increase Regulations

The regulatory body for VoIP services in the United States is the Federal Communications Commission, aka the FCC.  For quite some time, VoIP existed in a grey area as far as the FCC is concerned. As VoIP grows, regulations get clarified on an ongoing basis.

As of now, some VoIP services get classified “telecommunication services” and some fall under “data services”.  The services considered “telecommunication” are those which fully interconnect with the Public Switched Telephone Network. Telecom services fall under somewhat different FCC rules and regulations than data. Many telecom rules concern 911 access, keeping caller information private, and the use of VoIP to do those annoying robocalls we all hate. These VoIP regulations ensure a standard of services between all VoIP providers, making VoIP services more reliable across the board.

Any VoIP services that don’t fully interconnect with the public telephone system, such as a business private branch exchange that allows team members to call each other using three digit extensions, get regulated as data services instead.  The regulations for data services run much lighter, especially between a company’s own employees.

Other countries, of course, have their own communications regulation bodies.  We serve the US, so that’s where we focus.

Does Anyone Else Regulate VoIP?

There really aren’t any other federal bodies within the United States that regulate VoIP services. Each state may or may not have its own regulatory body for communication.

However, business contracts and end user license agreements are regulated on both the federal and state levels. Contract law is contract law, whether it’s for business telephones or brownies.

Most states also regulate businesses operating within that state’s borders, ensuring that each business provides a real product or service instead of being a scam.  These regulatory bodies also ensure that businesses pay their taxes and provide what they say they’ll provide in a general sense.

What To Look For In An Service Level Agreement Before Signing?

Always read a service level agreement (SLA) or an end user license agreement (EULA) carefully before signing it.  In particular, look for “out” clauses.  How badly does the VoIP provider have to mess up before you can change providers and avoid early termination fees on a term contract? Three phone outages in a month? More than an hour on hold waiting for tech support?

We here at NoContractVoIP just read an SLA today that essentially said “we aren’t obligated to provide you any service at all ever but you still have to pay us for three years even if our phones don’t work”.  That’s ridiculous and nobody should sign it.

In fact, we’re pretty sure it’s not enforceable.  The American Bar Association has the following to say on electronic contracts:

What provisions are not enforceable?

As in the world of paper contracts, certain provisions in terms and conditions may not be enforceable, even if you have obtained a click of “I agree”. Illegal provisions, such as usurious finance charges, are void as against public policy, no matter how clear the other party’s consent may be. Other provisions may be considered “unfair trade practices” under federal or local consumer protection laws. In addition to being unenforceable, there may be substantial penalties associated with including illegal or unfair terms in a consumer contract.

Moreover, provisions in standard form contracts which are so favorable to the vendor as to “shock the conscience” will not be enforceable on grounds of “unconscionability”. An example of a provision in an electronic contract which is sometimes enforced, but other times found to be unconscionable, is one requiring the resolution of relatively small claims against the company in a location far from where the claimant resides, or a waiver of the right to bring a class action.

It is hard to enumerate provisions which are unconscionable, since the outcome often turns on the specific facts of the case, the applicable state law, the sympathies of the court, jury or arbitrator, and the standard industry view of a customer’s reasonable expectations. Even if the only risk is that the provision will be struck down (and that is often not the only risk), there can be negative publicity associated with any challenge to the company’s business practices.”

We’re pretty sure that having to pay three years worth of charges for a service that literally does not work is unconscionable and against public policy. Still, it’s not good to sign it in the first place, even if it can’t be enforced in the end.  Businesses have spent too much money, time, and stress making sure they don’t get taken for a wild ride through the court system.

Ready For A Top Notch VoIP Business System?

Here at NoContractVoIP, we create custom business phone systems that offer a full suite of hybrid and remote solutions for your telecom needs. Your success is our success.

We don’t try to lock our clients into long term contracts.  If you don’t like our services or support, just tell us to cancel and we’ll take care of it.  No early termination fees, nobody is stuck for years on end, and we’re motivated to keep our clients thriving.

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Looking for the finest stress-free custom business telephone systems? Contact us or call today at 866-550-0005!


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