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Gotcha! SunRocket Leaves Angry Customers in its Wake

Posted by: Olga Kharif on July 20, 2007

I am posting a blog by my colleage Rachael King, who is guest blogging today. here’s her post:

When it comes to the battle between scrappy upstarts and entrenched telecom providers, I’m all for backing the Davids. But the experience of a friend of mine has me – and her – thinking twice about that.

Earlier this week, a friend of mine, Gail Norris, received the unpleasant news that her Web calling provider, SunRocket, was going out of business. Norris is a former colleague who is now a PR consultant in Gaithersburg, MD and used SunRocket for her home office phone service. But she didn’t find out about SunRocket’s demise from the company. Instead the tidings came from a friend who had read about it in the news. It wasn’t until this afternoon that she finally received an e-mail message from Sherwood Partners, the company hired to help with SunRocket’s liquidation: “After significant effort by the company to avoid this result, SunRocket is in the process of closing its operations and therefore will no longer be able to provide you with the phone service that you have been accustomed to.”

The letter offered no apologies but rather “an opportunity” to sign up for replacement service with 8x8, Inc. or United Communications Corp. In October, Norris pre-paid $199 to renew her service for a year and she’s pretty sure she won’t get any sort of refund for the 3 months left on her service. The letter certainly didn’t mention any refunds. It ends, in fact, on an odd note: “It has been our pleasure to service you at SunRocket!” The company seems to be suffering from some strange form of denial that 200,000 or so customers are now scrambling for replacement service and that most have lost money since most of the plans were pre-paid.

SunRocket’s slogan, ironically enough, was “the no-gotcha phone company.” Until now, Norris says she got great service from SunRocket. She says the service offered some innovative features, like the ability to have incoming calls ring both her office phone and cell phone at the same time, so she could easily pick up calls if she was out of the office. While she can get a similar call-forwarding feature with her new provider Comcast, she must manually forward her calls each time she’s out of the office.

Norris, who once worked at COMPTEL, a trade association for non incumbent communications providers, signed up with SunRocket because she believes in supporting smaller providers. Yet, this experience has made her think twice. Norris juggles a busy work schedule with 16-month-old twins and switching providers was one hassle she says she didn’t need this week. “After working in the industry to advocate competition, it was in my nature to go with the small guys but I’m not sure I will ever want to do that again.”

It’s all made me wonder, when is it a good time to go with a smaller, and possibly riskier, provider of telecom or tech services? When would you take such a risk?

Reader Comments

Alan A.

July 20, 2007 10:54 PM

Gotcha #2 -- $12.95 is really $21.96 . . . .

Teleblend, the "preferred provider" competitor to 8x8's Packet8, named by the Sherwood Partners, promises a seamless continuation of SunRocket's services at the rate of $12.95 per month for the balance of the customer's breached contract with SunRocket. However, surprise! I ended up being charged an extra $4.99 for the formerly free second "Signature" number as well as $4.02 in unexplained "Taxes" for my first month of continued service with billing by Teleblend.

The report of what was charged to my credit card reads as follows: "Unlimited Plan (Transfer Special) $12.95
Extra phone numbers $4.99
Taxes $4.02

Total $21.96"

It's not the amount that offends me, it's the continued appearance of behind the scenes dishonesty and the assumption that customer goodwill is worthless. It's not surprising that the TOS prohibits class action lawsuits, in fact, any lawsuits.


July 20, 2007 11:36 PM

Like Norris, I, too, have received the Sherwood Partners email on behalf of Sunrocket. Thanks for that, guys-- and enjoy the prepayment dollars I sent you back in January. This is the second time I have backed a telecom "David"-- the first one was Covad. After being dissed twice, I'm thinking of just throwing my lot in with the Goliaths when it comes to copper wires. AT&T, anyone?


July 21, 2007 10:52 AM

I don't know who told you that you cannot file class action but a TOS would not stand up against a company that continued to accept yearly billing when it full well knew (more than likely) within 6 months they were on their way out. I am sure the EXECS from Sunrocket are enjoying your money down in Belize or Mexico or some other exotic place. They didn't even kiss you before they bent you over. GET AN 800 sue Em lawyer and go for it most are pro bono unless they win. Glad I only paid month to month.
In defense though they had the best package going main number and signature number include, and $3.99 for additional sig number. and Their customer service was very good when I had problems. I told them that they needed to do like AOL did in beginning saturate a market with free disks, Sunrocket should have been paying some of these illegals $6.00 an hour to hand out advertising flyers all over the US, every trade show, state, county town fair, convention, computer show, baseball game, etc etc, that is where they failed. Of course my other thought was maybe it was one of those plans to build something and then wait for the big guy to come buy me out for 10's of millions more than I started with......HMMM intersting food for thought!!


July 21, 2007 11:31 AM

I went with Packet8 from and am really happy. I get my cell phone and high-speed Internet from them already so why not. But I'm still really pissed of at SR!



July 21, 2007 2:40 PM

All Sunrocket Suckers need to file a complaint with the FTC. They can move on getting a refund started.


August 10, 2007 7:48 PM

I guess your friend likes to support the Goliath, who is already working hard to bring the Davids to their knees. I was a dedicated sunrocket customer for two years and loved the service. Sure, I learned in the last minute about the desaster that had struck,surely enough I lost four month...but what do you expect, actually $199.00 even for 8 month was a good deal. Running to Comcast or Verizon,? I signed up with Teleblend, unfortunately they truly lost me with no v-mail and no international calls after two weeks. I then went to Vonage direct, and these guys are great. of course, they are battling right now with verizon, but i'll support the davids until my last breath, and so should you and your friend.

sam alexis

August 22, 2007 11:47 PM

I switched to Lingo for their 79.95/mo, unlimited business plan last week. Along with one month free subscription, I received a free additional voice line, 24/7 online account management, free adapter of worth $50 and Office Assistant plus usual basic and advanced calling features with this premium plan. If you are a former SunRocket, I suggest you must choose Lingo as your next VoIP provider. You will surely get your money’s worth.

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Bloomberg Businessweek writers Peter Burrows, Cliff Edwards, Olga Kharif, Aaron Ricadela, and Douglas MacMillan, dig behind the headlines to analyze what’s really happening throughout the world of technology. Tech Beat covers everything from tech bellwethers like Apple, Google, and Intel and emerging new leaders such as Facebook to new technologies, trends, and controversies.



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