8x8 2005 Annual Report Download - page 38

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answering point, or PSAP, along with call back number and location, where the PSAP is able to receive that
information. E911 must be included in the basic service offering; it cannot be an optional or extra feature. The
PSAP delivery obligation, along with call back number and location information must be provided regardless of
whether the service is "fixed" or "nomadic." User registration of location is permissible initially, although the FCC
is committed to an advanced form of E911 that will determine user location without user intervention, one of the
topics of the further NPRM to be released eventually. The VoIP E911 Order mandates that existing and prospective
customers must be notified of the capabilities and limitations of VoIP service with respect to emergency calling, and
interconnected VoIP providers must obtain and maintain affirmative acknowledgement from each customer that the
customer has read and understood the notice of limitations and distribute warning labels or stickers alerting
consumers and other potential users of the limitations of VoIP 911 service to each new subscriber prior to the
initiation of service. In addition, an interconnected VoIP provider must make it possible for customers to update
their address (i.e., change their registered location) via at least one option that requires no equipment other than that
needed to access the VoIP service. All interconnected VoIP providers must comply with the requirements of the
VoIP E911 Order within one-hundred and twenty days of the publication of the VoIP E911 Order in the Federal
Register, which is expected by late June, with the exception that the customer notification obligations must be
complied with within thirty days of the publication.
We currently offer E911 service as an option to Packet8 subscribers who choose phone numbers in markets where
E911 service is available (our E911 service is only available in a subset of the markets where we provide telephone
numbers). We primarily market the Packet8 service to our residential customers as a secondary line service, not a
primary line service. We do not encourage our residential customers to use Packet8 as their only telephone service,
unless they provision Packet8 E911 service on the telephone line. Even with E911 provisioned, the IP dialtone
service provided by Packet8 is only as reliable as a customer's underlying broadband data service and Internet
service provider (neither service is provided by us), and may not be suitable for use in all emergency situations. For
customers who choose not to or are unable to subscribe to our E911 service, we currently play a recorded message in
response to customers who dial 911 from these lines instructing them to hang up and either dial their local police/fire
department directly from the phone on the Packet8 service, or to dial 911 from a phone connected to the traditional
telephone network.
The VoIP E911 Order will increase our cost of doing business and may adversely affect our ability to deliver the
Packet8 service to new and existing customers in all geographic regions. We cannot guarantee that E911 service
will be available to all of our subscribers. The VoIP E911 Order or follow-on orders or clarifications could have a
material adverse effect on our business, financial condition and operating results.
We may lose customers if we experience system failures that significantly disrupt the availability and quality
of the services that we provide.
The operation of our Packet8 service depends on our ability to avoid and mitigate any interruptions in service or
reduced capacity for customers. Interruptions in service or performance problems, for whatever reason, could
undermine confidence in our services and cause us to lose customers or make it more difficult to attract new ones. In
addition, because our services may be critical to the businesses of our customers, any significant interruption in
service could result in lost profits or other liability to our customers. Although we attempt to disclaim liability in our
service agreements, a court might not enforce a limitation on liability, which could expose us to financial loss. In
addition, we may provide our customers with guaranteed service level commitments. If we are unable to meet these
guaranteed service level commitments as a result of service interruptions, we may be obligated to provide credits,
generally in the form of free service for a short period of time, to our customers, which could negatively affect our
operating results.
Consumer access to our websites directly affects our ability to sign new subscribers and the account management
and reseller reporting services we offer and thus affects our service revenues. We experience occasional system
interruptions that make our websites unavailable or prevent us from efficiently fulfilling orders or providing services
to our customers and resellers, which may reduce our service revenues and the attractiveness of our products and
services. If we are unable to continually add additional software and hardware and upgrade our systems and network
infrastructure in an effective manner, it could cause service interruption and adversely affect our ability to deliver
the Packet8 service.
The failure of any equipment or facility on our network, or those of our partners or customers, could result in the
interruption of customer service until necessary repairs are made or replacement equipment is installed. Network
failures, delays and errors could also result from natural disasters, terrorist acts, power losses, security breaches and