dwasifar's daily gripe

Okay, I admit I went a little too far in my recent email exchange with Vonage.  But it was so much fun.

This started it – an email I received a week ago:

Dear Dwasifar –

At Vonage, we’re committed to providing our valued customers with the best experience possible through regular updates to our services. Effective April 23, 2010, we’re making the following changes:

We’re adding free, unlimited Enhanced 411 to all Vonage calling plans – saving you $1.49 per 411 call! This added benefit is included in the Emergency 911 and Information Services Fee which also ensures we provide nationwide E911 service in accordance with FCC regulations.

In addition, the Regulatory and Compliance Fee becomes the Regulatory, Compliance and Intellectual Property Fee. This fee covers our regulatory-related and legal compliance expenses, including those related to customer privacy protection, anti-fraud protection and number portability, as well as intellectual property-related costs enabling our services.

Both fees will increase from $1.49 per month to $1.99 per month beginning with your first billing cycle on or after April 23, 2010. This change will allow Vonage to maintain our commitment to safety, innovation and customer service.

If you have any questions, please visit Vonage Customer Support.

This immediately raised my hackles.  We’re charging you more, and this is a big favor!  I looked up their FAQ page about fees and taxes, and it didn’t say any more than the email did, so I decided to call bullshit and send them a one-sentence inquiry through their web form:

In reference to the 33% increase in regulatory fee, please explain what “Intellectual property-related costs enabling our services” means.

A day later, I received a reply (edited here for space):

I understand that you need clarification regarding the fee increase. Please allow me to explain.

Dwasifar, on April 23, 2010, the Emergency 911 service fee is changing to the Emergency 911 and Information Service Fee. This fee is currently $1.49 and will increase to $1.99. The fee provides funding for Vonage to offer.

- Nationwide Emergency 911 Service in compliance with FCC regulations
- Vonage 911 dialing
- NEW Unlimited 411 Dialing – saving you $1.49 per 411 call

Also on April 23, 2010, the Regulatory and Compliance fee is changing to the Regulatory, Compliance and Intellectual Property Fee. This fee is currently $1.49 and will increase to $1.99. The fee provides funding for our regulatory-related and legal compliance expenses including:

- Customer privacy protection
- Anti-fraud protection
- Number portability
- Intellectual property-related costs enabling our services

Beginning with your first billing statement after April 23, 2010, these changes are being made so we can continue to provide you with the service that you value. Both fees will increase from $1.49 to $1.99, for a total increase of $1.00 plus required taxes for a voice, fax line or softphone or $.50 for a toll free or virtual number.

…

We are making these changes to keep competitive while delivering important services and maintain our commitment to safety, innovation and customer service.

They also offered me a $6.00 credit, which I did not refuse (though it later became irrelevant, as you’ll see).  But notice that nowhere in there is the question actually answered.  All they did was email me the text of their FAQ page.  What is “intellectual property-related costs enabling our services?”  Why, it’s “intellectual property-related costs enabling our services,” of course, you silly man!

So I tried again:

Thank you for the credit, which I very much appreciate.  But it does not answer the actual question I asked.  (What you sent was essentially the same wording as the website Taxes & Fees FAQ, and the email I received announcing the changes, both of which I had already read.)

What does “Intellectual property-related costs enabling our services” actually mean?  It appears that the fee is being raised 33% to cover this new item.  But it is vague; I don’t understand it.  What is an “intellectual property-related cost,” and how does a cost “enable” a service?

The next day, I got another reply, this one a little more informative, but still not very satisfying:

Dear Dwasifar,

It is my pleasure to explain about the Regulatory, Compliance and Intellectual Property Fee.

The Regulatory & Compliance fee is replaced with the Regulatory, Compliance and Intellectual Property Fee. This fee cover our regulatory-related and legal compliance expenses, including those related to customer privacy protection, anti-fraud protection and number portability, as well as intellectual property-related costs enabling our services. The major legal mechanisms for protecting intellectual property rights are copyrights, patents, and trademarks. For example: Vonage Mobile and other pending patents and pending innovative services.

Vonage must make these changes so that we can continue to maintain our commitment to safety, privacy, innovation and customer service while delivering a competitive price. We want to be sure you have gotten the most out of your Vonage service and have had an opportunity to experience the suite of features that make Vonage such a great value.

We are currently evaluating our prices and at this time the increase in the price is still a great rate compared to our competitors.

Thanks for contacting us.

So this, finally, is an actual answer.  It’s to pay their lawyers, probably over the huge judgments Verizon, Sprint, and AT&T won against them in recent years for patent infringement.  But it’s not surprising that it took so much effort to get it, because I can sure understand why they don’t want to be upfront about it.  To see why I think so, here’s my reply to them (which is where I cross the line into Too Much Attention Paid to a Trivial Issue):

So if I understand correctly, you’re making your customers pay your lawyers for your legal work instead of paying for it yourself?

The reason this has become an issue for me is that, with this change, the combined taxes and fees on my account come to nearly half of the base package charge – $12.02 on a $24.99 plan.  I realize this is not wholly your doing, as some charges are taxes beyond your control, but with these increases your share of that total grows from 27% to 33%, so you are at least one third responsible.  I don’t want or need free 411; in six years with you I have never used directory assistance once.  And I get no direct benefit from paying your lawyers for you.  Pay them yourself, and if you need to make more money then raise your prices honestly instead of sneaking fees onto the bill.

Also, you should review that claim about having great rates compared to competitors.  This rate increase has made me look at them, and they’re eating your lunch.

That last part is true, by the way.  There are other VOIP companies providing essentially the same service for a lot less, and even the taxes and government fees seem to be lower with them.  I wonder how that’s possible?

Here’s what came back:

Dear Dwasifar,

I am glad that you took time to write back to us.

I understand you are concerned about the Regulatory, Compliance and Intellectual Property Fee.

Dwasifar, we regularly monitor how our customers use our service to find valuable services and offer those services at the best price in the marketplace. We found that the vast majority of our customers use 411 services at a cost of $1.49 per call. By extending our Emergency 911 service to also add the convenience of unlimited 411 services at a cost of $.50, we are adding value and lowering costs for many of our customers.

For others, we anticipated the unlimited 411 services would add flexibility and convenience and encourage the use of the service more freely. There has been no change to our Emergency 911 fee with this change. The fee covers the cost of making nationwide emergency services available for all of our customers. FCC regulations require us to provide nationwide emergency services for all of our customers.

The new Emergency 911 and Information Service fee is not optional. Like other bundled services, we are combining required and convenient services into a single service to make it available at the lowest possible cost. As mentioned earlier, we are making these changes to keep competitive while delivering important services and maintain our commitment to safety, innovation and customer service.

Thanks for contacting us.

Hm.  Perhaps he pasted in the wrong boilerplate?  How else to explain the abrupt change of topic?  At this point I go right off the deep end and pull out the stops on the Sarcast-o-matic:

That’s pretty hilarious that you would first acknowledge that I am “concerned about the Regulatory, Compliance and Intellectual Property Fee,” then never mention it again and spend the rest of your message talking about the “Emergency 911 and Information Service fee” instead.

At least the 911 and Information fee increase is for an actual service that some customers might want, so I guess it is understandable that you would prefer to talk about that rather than try to justify the new Intellectual Property fee.  I’m guessing the monitoring of how customers use your service probably did not turn up a widespread customer desire to pay for your lawyers.

It will be interesting to see where the fee train eventually takes us.  By the year 2050 I imagine the stated price of things won’t actually cover anything at all.  Everything will cost one cent, so that ads can show the lowest price possible, and the rest of what you really pay for anything will be in fees, probably forty or fifty of them with every transaction.

You could start on that right now, if you wanted to.  Drop your price to $5 a month for the unlimited plan, and charge a voicemail fee, a call waiting fee, a caller ID fee, a simultaneous ring fee, a website access fee, a network access fee, an invoice fee, a bill payment fee… the possibilities are limited only by your imaginations.  And I bet your copy writers can figure out ways to make every one of them sound like you’re doing the customer a big favor by charging them.  Make them all mandatory and you’ll clean up.

If you want the short version of all this blather, here it is: PEOPLE HATE BEING NICKEL-AND-DIMED TO DEATH WITH FEES.  We know they’re just sneaky price increases.  Be honest with your pricing if you don’t want to piss off your customers.  For every emailing jerk with time on his hands like me, there are a hundred who will just drop the service and never tell you why.

It is not necessary to reply.  I’ve said my piece and I doubt you have anything else to tell me.

Now then.  Did I go overboard?  I surely did.  But my frustration with the fee explosion has been growing for a long time, and I’m not the only one.  They hope increasing fees a little at a time is like the frog in the pot; if you keep turning up the heat imperceptibly, the frog will boil without ever realizing it.  But sooner or later, that stops being true.  It stopped being true for me with the previous fee hike, and one more tiny increase – a dollar a month, in this case – tipped it over and made me not only complain, but check out the competition too.  I signed up with one of Vonage’s competitors, where I pay less per month in total than I was paying Vonage for taxes and fees alone.  If they had not raised their fees – or had not insulted my intelligence by cheerily announcing the increase as if it were a benefit while simultaneously trying to obfuscate it with a vague, opaque description – I would probably not have been motivated to look elsewhere.  But they pushed me, and I did, and they lost a customer because of it.  One of their earliest customers, in fact; I’ve been with them for six years.

Am I on the avant garde of a consumer fee revolt?  Or am I just a random crank with too much time on his hands tilting at windmills?  I rather hope it’s the former; I fear it’s the latter.