In an arrangement that does not admit guilt of any kind, VoIP provider Vonage nevertheless has agreed to pay Texas and five other states a total of $500,000 to settle deceptive trade-practices lawsuits brought against the company in 2005. The lawsuits were spurred by highly publicized incidents where Vonage users who dialed 911 didn’t get directly connected to emergency operators.
To its credit, Vonage turned the situation (which included follow-on action from the FCC requiring VoIP operators to beef up 911 services) into a positive, using the controversy to get better access to 911 infrastructure. The company also spent extensively to improve its own emergency operations, claiming Monday that 94 percent of its lines now have E911 service.
Still, it should be interesting to see how the company explains the half-million payout during its Feb. 15 earnings call, since the legalese says that Vonage isn’t being fined, per se:
In no event shall any portion of this payment be characterized as the payment of a fine, civil penalty or forfeiture by Vonage to any state.
Texas, which brought the main suit, got $220,000, to reimburse “investigative costs and attorney’s fees.” The other five states will split $280,000.
Isn’t that how most standard lawsuit settlement legalese goes? When companies settle, it’s so that they can avoid the cost of litigation and come out ahead by saying “we don’t admit to doing anything wrong”.
Agreed, just want to see how Vonage words the payments, which are fines by any other definition.
Great! Now I get to see yet another $1/month “tax and/or fee” on my Vonage bill. Thanks!