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Sparks Still Flying Over SunRocket

Kim Hart

More than a week after SunRocket went belly up, I'm still receiving phone calls and e-mails from angry customers who were left in the lurch.

SunRocket, the Vienna-based Internet-phone service provider that was was once a darling of the local venture capital community (it received $80 million in private investment over the past two years), laid off the majority of its employees shortly before shutting its doors for good last Monday. Customers weren't notified the company went out of business until several days later. Most of them found out when their phone service was suddenly shut off.

The company handling SunRocket's liquidation announced last week that 8x8, the second-largest stand-alone Internet-phone company now that SunRocket is history, is one of the preferred options for former customers. It later announced that another company called TeleBlend is offering services to former SunRocket customers.

But a former employee warned me today that TeleBlend didn't exist prior to SunRocket's demise, and it is basically a shell company with little customer support. The former employee is urging customers to use caution when choosing a new provider.

A lot of people are also asking me what happened to all that money that was invested in SunRocket. The investors aren't talking, and former executives are no where to be found. But several former employees told me they suspected the money went toward the salaries of highly paid executives brought in over the past year from companies like AOL and Qualcomm. Lisa Hook, SunRocket's CEO, came from AOL.

It's hard to know what really went down at SunRocket, and it's sparked a discussion about the viability of Internet-phone companies. Vonage's legal battle with Verizon doesn't help. What do you think? Will these independent companies be able to survive?

By Kim Hart  |  July 25, 2007; 7:09 AM ET  | Category:  Kim Hart
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I'm a SunRocket refugee (and a Vonage customer before that), and I have thought long and hard about this same question over the past week and a half. I dropped Qwest (baby bell) service in Denver for Vonage back in 2003 when I was setting up a home office and needed a phone service that would save money for long distance calling. In 2005 I moved to Cincinnati, where Vonage didn't offer service at the time. Initially my family signed up for Cincinnati Bell, but after Vonage it was very hard to stomach the very high POTS prices. A friend here told us about SunRocket, and we switched. All seemed fine until last Monday, and now after researching one VOIP company after another AND researching the bundle deals offered by Time Warner (our local cable company) and Cincinnati Bell's latest offerings, we've decided to go back to Cincinnati Bell. I'm very surprised that CB now seems like the best deal, but they've really gotten their act together since we moved here. Their bundle deal will be cheaper than our current Time Warner cable & high speed internet package plus the monthly charge we'd have to pay for a new VOIP service, and that's even after the initial promotional period ends. But what surprises me even more is how sour I now am on VOIP service generally. Vonage's stock is in the tank, and all of its competitors are tiny, so there's just no reliable alternative. The size of a company wouldn't have been an issue for me prior to SunRocket, but now it is. I really don't think it's a sustainable business model anymore. I think Motley Fool has the best argument about the business model here:

Posted by: Reid Hester | July 25, 2007 9:13 AM

There is one player out there that is not a tiny start up or shell company like teleblend(front for the same people that drove SR into the ground? It was a little too convenient that SR crashed and this teleblend is all set to pick up the pieces): Lingo. Lingo is backed by Canadian Telecom multinational Primus with $BILLIONS in assets and business.

I jumped ship from Lingo to SR 18 ago because Primus does it's Credit card billing through a subsidiary in Ireland. Although I had the service for over a year and the charges were less than $25/month (unlimited calls to EU included) my credit union would not allow additional charges thru Ireland due to a relatively large amount of CC fraud initiated (allegedly) through Ireland.

Personally, having done without home phone service for 5 days before I had any substantial information on what had happened w/SR my wife and I found we really didn't miss the home phone enough to pay the $25 plus/month or prepay far into the future for discounts that you may lose after the next VOIP failure (still only have Credit union credit cards and they still would not allow charges from Ireland or I would go with Lingo).

We've taken advantage of the tmobile hotspot@home and so far we love it and it's only $20 more a month and I can't see any new fees or taxes that would normally be brought up by a new service.

Posted by: kc | July 25, 2007 10:24 AM

At my business, I gave up running our own pbx and switched to 8X8s Packet8 IP phones about 2 years ago. This has been a terrific move for us. And now I have added the Packet8 service at my home, which has not gone so well due to the constant IP outages we suffer from Comcast.

In my view, if you have a good IP provider, move to an IP phone service like Packet8. Otherwise, stick with your telco.

Posted by: Richard Newberry | July 25, 2007 11:06 AM

To see what I think go here.

Posted by: Ed | July 25, 2007 11:57 AM

for the last 4 days I put in many hours of research, I found a great company called VIATALK, They offer a plan $199 a year for unlimited calling, just like sunrocket and they will give you in addition to the plan they offer you, up to 6 months free service , only if you were a sunrocket customer.

for example , if you sign up for their service for $199 a year and had been a customer of sunrocket and you had 4 months left on your sunrocket plan.. they will give you 4 months free

here is the link.. copy and paste this link in your browser

Posted by: Mark | July 25, 2007 12:04 PM

Mark, you work for VIATALK, we get it. One posting is enough. Thanks.

Posted by: Birdman | July 25, 2007 12:41 PM

I filed a complaint with FTC on their website about SunRocket. I supspect foul play by the sr management of SunRoket. The company kept offering one year and two year contracts until the day it went bankrupt.

Isnt there any federal law to deal with this situation?

Think about a scenarion where someone advertise a "great deal", take money from public and spend all money for their benefit and declare bankruptcy?

I will never switch to the companies SunRoket recommends. TeleBlend poped from nowhere on the same day.. is that weired?

Posted by: rk | July 25, 2007 1:19 PM

After significant effort by the Company to avoid this result, SunRocket had to close their operations. There have been some

TeleBlend is the joint broadband phone service offering of Unified Communications Corp. and USA Telephone, a Competitive Local Exchange Carrier (CLEC) that has been providing reliable local and long distance phone service since 1999.

The Packet8 Internet phone service incorporates patent protected technology from 8x8 Inc., a publicly traded company in business for more than 20 years.

Posted by: Martin Pichinson | July 25, 2007 2:54 PM

Mark/Martin, let me know how much do you guys getting paid when you post this message every time in the discussions like this? May be, I should also start doing the same thing to recover my money that I paid to Sunrocket. :)

Posted by: King | July 25, 2007 3:35 PM

I've had a strange turn of events.

After SR went under we went with mobile phones in our house, now Wednesday morning my SR phone rings and I'm getting calls again.

Didn't sign up with any of their recommended companies and haven't heard anything from SR.

Posted by: Ronald Conner | July 25, 2007 3:49 PM

My Sun "racket" phone # is now being forwarded to my cell phone. I want to cancel. What to do, what to do?? I went out bought Vonage and had to change my number too. Gosh. I want a refund from SunRocket. They owe me for half a year. Has anyone put together a class action yet?

Posted by: Marianne | July 25, 2007 5:54 PM

I think that you will be interested in The SunRocket Blog.

Posted by: L | July 25, 2007 6:10 PM

I was a former SR member. I switched to Voicestick and they gave me the 12 months free on my new plan.

Posted by: T McGinnis | July 25, 2007 8:13 PM

I have 3 lines (two is still working with Sunrocket) and the other is a land line with AT&T.
I'm sure all of you remember when you dialed 1-800-786-0132 and heard Sunrocket's recorded message: "We are no longer taking customer service or sales calls. Goodbye." (You'll still get that message if you call from a NON-SUNROCKET phone no.)
This past Sat. 7/21 I discovered that if you call that same no. from a SUNROCKET phone no. - mine is still on) you'll hear "Thank you for calling Teleblend, we're now offering, blah, blah." I was absolutely FURIOUS!!!

Global Crossing owns my 2 numbers AT&T told me after checking, but Teleblend is controlling them. I called AT&T and requested they be ported back to AT&T as I've had those numbers for over 20 years. I'VE CALLED TELEBLEND & GLOBAL CROSSING BOTH, BUT NEITHER WILL GIVE ME A STRAIGHT ANSWER!!!!!

Posted by: Susan Mason | July 26, 2007 1:45 AM

It happends to be , I dont work for any company.. I got screwed just like eveyone else. and sunrocket has my $199,

I am very upset that they got away with this.

Posted by: Mark | July 26, 2007 11:30 AM

It happends to be , I dont work for any company.. I got screwed just like eveyone else. and sunrocket has my $199,

I am very upset that they got away with this.

Posted by: Mark | July 26, 2007 11:30 AM

It seems that credit card companies are prepared for the onslaught of customers demanding their money back. I called mine today and told them that I was disputing the last SR charge made in May, and they calculated the reimbursement for ten months and credited it to my account.

No, that does not make up for the fact that I lost my phone number that I had ported to SR, but at least I didn't lose any additional money.

Posted by: Marianne | July 26, 2007 2:05 PM

If you had sunrocket annual plan, dispute your charge with your credit card company and ask for a prorated refund.

I filed a dispute online with my credit card company and mentioned that the company had gone out of business.

Next day I saw a provisional refund on my account! Hope it stays :)

Posted by: Jacob | July 26, 2007 4:34 PM

Received an email yesterday (July 26) from SR saying service may be discontinued at any time and all services will be discontinued no later than August 5. I am glad to read some of the other comments about the alternative solutions here, especially the ones relating to the companies recommended by SR. My wife and I had thought to go with the 8x8/Packet8 but will check more closely now given the apparent association between SR and TeleBlend. I think we may just go with dropping home phone altogether. Each family member has a cell phone and most of the people we frequently talk with are on the same plan (so no major concerns about running out of minutes).

Another disappointed SR customer (7 months remaining on the contract),


Posted by: Jim | July 27, 2007 9:50 AM

Wow this SunRocket fiasco has been all over the internet. I am a ViaTalk sub before I switched to SR at the beginning of this year and quality was better and it seems a good decision until 2 weeks ago when a friend told me his SR has been getting intermittent service and next thing I knew SR was all over the forums and closed down. My SR keeps on working until about 5 days ago when it just died.

I almost consider Vonage but their lawsuit made me think twice, paying $50 to Verizon was no joke. I decided to try SuiteAdvantage because I don't to pay another $200/year it to me once shame on you, twice shame on me.

Onesuite SuiteAdvantage is pay as you go so I'm not worried to lose money again and besides I checked the web and they've been in the business for about 7 or 8 years now. I hope I did the right choice this time.

Posted by: Josh | July 31, 2007 6:15 AM

I have been a Sunrocket customer for 12 months out of 15 promised months. On 7/22/07 my phone service was turned off. I signed up with Vonage the same day. Up to today Sunrocket has not transfer my phone number. I can only call out but can not receive calls. I am practically in phone hell. Sunrocket is holding my phone number hostage. Is this how you treat a customer?

Posted by: Ben | August 3, 2007 11:32 AM

I have been a Sunrocket customer for 12 months out of 15 promised months. On 7/22/07 my phone service was turned off. I signed up with Vonage the same day. Up to today Sunrocket has not transfer my phone number. I can only call out but can not receive calls. I am practically in phone hell. Sunrocket is holding my phone number hostage. Is this how you treat a customer?

Posted by: Ben | August 3, 2007 11:32 AM

After SunRocket went down, I switched to Lingo's annual $195 calling plan. Their deals are absolutely transparent and I have had no problem with this sudden transition.

Posted by: josef jack | August 5, 2007 10:56 PM

My Sunrocket service is still on. I am going with They have guaranteed to port my number. Vontage said they couldn't.( Not to mention all the fees they charge.) I had to pay about 43.oo for activation, shipping ,and 911 fees reg.fees but, will only pay 19.95 per month total. I will be getting a 30.00 rebate back, and I believe one free month.placed my order Aug 1 equp.on way.

Posted by: Emilie Wise | August 5, 2007 11:53 PM

I switched to Vonage on July 19th and still waiting for my number transfer from Sunrocket. I set the simple forward (from Sunrocket's web site) to my Vonage virtual number. It is still working as of 5 minutes ago. Something at Sunrocket is still running I guess. Learn from the experience from Sunrocket, we should not pay any annual plans no matter how good the deal is. Choose pay as you go on a monthly basis ONLY.

Posted by: Mark | August 6, 2007 1:44 PM

IRONY. It appears that Teleblend, the company that took over SunRocket's network and was recommended as one of two preferred new carriers on the SunRocket site, is having serious problems with incoming calls on a large portion of their network.
Apparently their provider Global Crossing is either having serious problems or cut them off. Problems began 8/6 and are ongoing as of now....

Posted by: Andy | August 7, 2007 1:49 PM

Most people who went to Teleblend did so under the assumption that this would "save their phone number" so they could transfer it to a viable company. However, it is both taking forever for the numbers to transfer, and Teleblend isn't even providing incoming call service to most of their customer base, and have not done so for two days (and counting).

Posted by: Dan | August 7, 2007 2:23 PM

I ported my SR phone number over to Verizon Wireless in three days (two weeks ago).

Also, it's August 7th now, and my SR Gizmo is still registered, and I'm still able to make outgoing local calls (with the same number that is assigned to my cell phone).

That's after receiving numerous e-mails saying service would be shut off no later than August 5th.

Guess I can count the blessings.

Posted by: Lex | August 7, 2007 8:15 PM

Teleblend seems to have fixed the incoming call problem sometime on 8/8. No clear explanation of what happened though.

Posted by: Andy | August 9, 2007 3:33 AM

Well, My Sunrocket finally bit the dust on Aug. 11th. I as I stated, have gone with My number is ported, waiting for equip. I have downloaded a softphone.Will have to do for now. So far have found reps very helpful. Did have to wait an hour the other day to speak to a rep who explained they have been snowed under with refugees from Sunrocket. Oh, by the way , the day my phone number was ported was when I lost my service and a rep from Telebend encouraged me to give them a call to get my service turned back on. ( a message)
These are not odd happenings??????

Posted by: Emilie | August 12, 2007 11:32 PM

Lingo has new plans for ex-SunRocket customers. Their residential plans, come with free advanced calling features, free equipment plus 30 day money back guarantee, are great for calling your family and friends in US and in Western Europe. Their annual calling plan is now available just for $195.

Posted by: Reva Cruz | August 12, 2007 11:45 PM

I too was amazed on hearing about the abrupt shutting down of SunRocket. From then, I went browsing to find the best VoIP provider that can offer seamless transition service from SunRocket. Finally, I noticed the promotional offers of Lingo for SunRocket customers located at I though this could be a better option for ex-SunRocket customers.

If you want to switch to a new phone service, I would suggest you to go with Lingo. They have good plans for SunRocket customers.

Posted by: Ivan Swartz | August 13, 2007 10:15 PM


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Posted by: Aaron Cook dot Comâ„¢ | August 16, 2007 8:11 PM

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