magicJack's CEO Responds

For those of you who may've missed Dan Borislow's comment in response to my post on magicJack's Terms of Service (TOS) agreement, I'd like to highlight it here, as well as provide a couple of follow-on thoughts...

Here was Dan's response:

"I can appreciate this post. Why you ask? Because The Parent company, which I am the majority shareholder of, also has to subscribe to terms of Service with verizon, AT&T and many other companies we interconnect with. So if we have a few pages of TOS, what I subscribe to is thousands of pages of a TOS, but it is never shown to me, but filed as a tariff in most cases. I am sure that most readers did not know, when they buy there home service from Ma Bell, that they also subscribe to thousands of pages of a TOS in the form of a Tariff. So whatever I have made available to show my subscribers, is light years better than what they commit to with tariffs to there home service, wireless, etc. which they do not know about. that is the real sneaky way out of it, not what we show you with magicJack. There is various ways we try and protect you including making it an option to elect getting you a free service mentioned above. That comes with being in the business for over 20 years and knowing what the FCC rules and State rules are all about. There is so much legal mumbo Jumbo in providing 911, because that is the way it is designed to be with all the regulatuions in place and lawsuit happy people. We do not dream this stuff up, regulators or lawyers do it first then we have to respond with what appears or is an unusual TOS. Then to top it off, we have to protect ourselves from the millions of lawyers we have in the US, the great majority ethical, but many who are not. So the best way to protect you and I is to say we are the boogey man-although we are quite the opposite, and spell out the worst it can be, but of course, be mindful that we want as many customers as we can get, treat you right and protect your privacy. Customer care is priority one for us. The service is very straight forward, works great, is very inexpensive, easiest to use, has a hell of a following and there is nothing funky going on. It is unfortunate that we have so many legal issues in the US, adding great costs and agg for all of us and we have to have a TOS that looks like this. The alternative, is Ma Bell, that costs 50 times more and there TOS is thousands of pages long in the form of a Tariff, and little does anybody know, that you have given up everything but your first born to these companies. Again, the other thing we must do, is protect the base and us from these ever hungry, lawsuit happy sharks out there. I wish life were easier, and I try my best to make it that way for all my customers, and am proud of the fact that we have built something nobody is close to copying that provides such great savings and benefits to so many people."

Dan, first off, thanks for taking the time to respond to my comments, and thanks to Beth for her coordination.

I agree with you on about 98% of what you're saying. Absolutely, most customers who subscribe to any service never read the relevant terms, just as few if any customers ever read the end user license agreement (EULA) accompanying just about any piece of software. Thanks to the transparency of the Internet, tariffs are much easier to track down these days, but as you note, they're still full of mumbo-jumbo which taxes the patience of pretty much everyone.

Here's my first point of contention--I agree that the TOS you show your subscribers is light years better than what a traditional telephony provider offers, from a brevity standpoint. Absolutely. But, the verbiage you use as part of the sign-up process is confusing. Obtuse. Borderline deceptive, particularly to those who aren't used to reading TOS agreements. I mean, I'm a geek, and I know a little bit about privacy, so I tend to look at TOS agreements when they're presented. This one, I found to be particularly annoying. If you're not a geek, or not privacy-aware, you're probably going to ignore the TOS completely. Fine. But Dan, since you obviously need to have a TOS in the first place, make it accurate, make it useful, make it clear. You'd be doing a great service to magicJack by cleaning up your already brief TOS, and you'd be in much better stead with privacy advocates who truly are concerned about what magicJack does with consumer data.

Second, I agree that 911 service requirements are a mess for VOIP providers. But, clarifying the language you use could make this a lot less messy for magicJack. A few sentences in the TOS defining what information the FCC requires consumers to provide to their VOIP provider would both clarify why magicJack's asking for the information, as well as take a target off magicJack's back. This shouldn't be difficult, assuming you can get a good marcom professional and a good lawyer in the room at the same time.

Third, you have made life easier for the vast majority of your subscribers. In admittedly limited testing over the past few days, I've made a handful of calls--all of which were easy to place, most of which were nearly toll-quality (with occasional audio clipping which eventually disappeared), and all of which were absolutely free. A couple more simple steps would make life even easier.

So, here's some constructive criticism to remove (or at least mitigate) those final percentage points of concern...

First and foremost, during the sign-up process, your TOS page comes up after the page where consumers enter all their personal information. That's wrong. Move the TOS page before the personal information page, and you'll relieve a lot of pain, both surrounding the perception of magicJack and around consumers' concerns. You own the software company; further, the software is dynamically downloaded to the computer upon initial connection of the magicJack device, so changing this in the code tomorrow means it's fixed in new consumers' hands tomorrow. I can't imagine that recompiling the code to flip-flop two screens would be all that difficult. If magicJack has nothing to hide (and I'd like to believe you don't), you should do this, pronto.

Second, clean up the references (e.g., Section 19 referring to something in Section 5 that doesn't exist). The updated TOS is a web page, so cleaning up the entire document should take little more than a business person, a marcom person, and an attorney. Seriously, you could do this over lunch. Posting it to the website URL would take another minute for your webmaster. Easy fix, tangible results.

Dan, your passion as an entrepreneur comes through in your response. And, the fact that you've created a device and a service that for the most part just works is hugely admirable.  It's awesome.  Fixing these items would go a long way to further removing concern about magicJack and its intentions.

As you state, there's "nothing funky going on", and that you want to protect customers' privacy. I urge you to back those statements up by correcting and/or clarifying your Terms of Service statement to that effect.