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  1. #1

    How enforceable are carrier contracts? (bandwidth)

    This may sound like a strange question, but I would love to know if others have experience here.

    Take the following example. I have a 3 year contract with XO for bandwidth. I am 18 months into the contract. I am paying an awful price for bandwidth, and the service is terrible. So I want to cancel. Now, most carriers have a cancellation policy that says you owe them all the remaining months of payment. So in my case, I pay $1390/month - with 18 months lefts, thats a termination fee of $25,000.

    My sales rep, who is a jerk, says XO will sue me. Will they? And if they did, would a court enforce that termination fee?

    The reason why its unfair, or in legal terms... no consideration, is XO would be collecting 18 months of payment for service they never have to provide, so they end up making more money.

    Has anyone cancelled their carrier contract? If so, what happened?

    I find it odd that cable TV, satellite, and cell phone company's have a fixed price termination ($200 or something), NOT the all remaining payments thing. Almost as if they know they cant collect it legally.

  2. #2
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    I think they would sue you tbh, it's $25,000 they're missing out on.



    How do you know your getting a terrible pricing on bandwidth? If your sales rep is a jerk, then ask to get a different one?

  3. #3
    Because for $1390/month all I'm getting is 20Mbps, and I am in a lit XO building! Trust me, I'm getting ripped off.

  4. #4
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    Quote Originally Posted by crestecdigi View Post
    Because for $1390/month all I'm getting is 20Mbps, and I am in a lit XO building! Trust me, I'm getting ripped off.
    Seriously? Your paying $69 per/Mbps. That's terrible, absolutely terrible. I was expecting you had 100~150Mbps. I would really push management to get you either better pricing, or say your going to leave right now.

  5. #5
    Like I said, my rep is a JERK. He stands by XO's policy, that we can only discount the add-on bandwidth, so I'm always going to be stuck with that first 20Mbps at that awful price. But its not price, the service is terrible to, outages, plus tons of "planned" outages that count against my SLA.

    I'm sure someone has had a similar scenarios, and walked, I'm just curious what the ramifications were.

  6. #6
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    As of late, only the government has the power to break contracts.

    If you signed a contract, a court will enforce and hold up that contract. Sometimes contracts have language that allows the contract to be broken if the other party doesn't hold up their end of the deal. The only thing I could think of, is that you could argue that XO isn't holding up their end due to lousy support.. but that's probably a long shot. Bankruptcy also works.
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  7. #7
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    Quote Originally Posted by crestecdigi View Post
    Like I said, my rep is a JERK. He stands by XO's policy, that we can only discount the add-on bandwidth, so I'm always going to be stuck with that first 20Mbps at that awful price. But its not price, the service is terrible to, outages, plus tons of "planned" outages that count against my SLA.

    I'm sure someone has had a similar scenarios, and walked, I'm just curious what the ramifications were.
    I would ask to speak to management and lay it down piece by piece. Explain to them the downtime, how they aren't upholding their SLA and so on and so forth.

  8. #8
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    Working within the framework of their SLA won't resolve your bigger issue. Unfortunately, I doubt XO gives in at all and instead will select to pusue ligation if you terminate the contract. At $69/Mbps, you're absolutely getting ripped!!
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  9. #9
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    You agreed on that price, it seems like you have regrets. If you didn't want to pay $69/Mbit, you shouldn't have signed the contact.

    As for if you can break it, no. They will fight you.

    However, I got out of a Xo contract once by calling their NOC every day and complaining about something, it wasn't cost effective for them to keep me as a client so they let me go.
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  10. #10
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    Well it's a long shot, but talk with a lawyer to see if you can sue them for failure to perform. If the downtime is costing you money you may be entitled to relief (although your contract likely has language limiting relief to what you have paid for the service).

    If that doesn't work, check the contract again to see what forms of payment they will not accept. If it's not explictly stated that they will not accept cash then start paying your bill with pennies.

    Hopefully you can deliver said pennies in person, I imagine it would be expensive to have 800+ pounds of pennies delievered

  11. #11
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    Play your hand you mentioned performance, rather you say the "service is terrible" can you elaborate, we do not use XO but rather the bigger guy but none the less our contract has a performance clause.

    Share the service issue if it relates to bandwidth, uptime, or deliverability you might have a case in our opinion. Let us all to see what can be done based on that.
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  12. #12
    As for XO service, in 2008 we had 8 hours of outage. They charge us a $37 USF even though the contract says USF is only applied local and long distance services, i.e. NOT IP, a few months they billed us for more then what we used under 95th percentile, sales rep said we would get fiber, instead we got a 200 foot run of Cat5.

    Trust me, I think we have a fair case for cause of termination, but XO is big and they have a legal dept and will probably sue anyway.

    But this thread has given me an idea... Get XO to get rid of me! I know alot of web providers who have alot of abuse routinely get the axe, I know one in particular who had Level3 and Level3 just dropped them one day.

    I think what I might do is call XO and just start being a pain. For starters, I'll say that I am dropping BGP multi-home and will have XO IPs and request something big, like a /19. I can prove the /19 from current usage. Technically they have to fulfill my request. If they do, I will then start generating tons of abuse complaints on those IPs. The plan is XO will just through in the towel and can me!

  13. Is XO breaking the SLA they agreed upon when you signed the contract?

    If they are, then you may have some grounds to cancel the contract, otherwise you'll be stuck footing the bill for the 18 months you dont want service.

  14. #14
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    Or they might just take you to court for abusing their service. I would be careful what you do in that respect, the best thing to do would be to talk to a lawyer about it.

    However, I would also like to point out, if they are not following their own code of conduct or carrying out work that was promised or they are billing you incorrectly, you might be able to terminate under that and say that they broke the contract. But like I said, get the contract, sit down with a lawyer and discuss everything that has happened, they might find a way to get the contract annulled or cancelled.

    But for $25,000, they are definitely going to come after you.

  15. #15
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    Definitely talk to lawyer about it. They WILL chase the money.

    I was in the exact same situation 18 months ago with one of Australia's largest ISPs. They were charging me $2800 per month for 20Mbps unlimited + rackspace and they reckoned I was going over my contention ratio so they were limiting me to 1.25Mbps, which effectively made me lose all of my customers and i couldn't afford to keep paying the $2800 per month.

    So i cancelled, with about 18 months left which equated to around $55k. At the time I couldn't afford a lawyer.

    Luckily for me I have a very smart family member who helped me out + even luckier for me, when I cancelled one of the ISP's employees told a customer of mine he thought I was going broke. And although that lost my customer, it was breach of confidentiality on their part which made the contract of none effect and put them in a serious situation with the communications ombudsman.

    We ended up settling at $5k. But I was very very lucky!

    So yes unless you have some serious evidence that you can use to base the cancellation on, be very very careful.

    I was young and inexperienced then - taught me a lot!

  16. #16
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    *

    Quote Originally Posted by envisage View Post
    Definitely talk to lawyer about it. They WILL chase the money.

    I was in the exact same situation 18 months ago with one of Australia's largest ISPs. They were charging me $2800 per month for 20Mbps unlimited + rackspace and they reckoned I was going over my contention ratio so they were limiting me to 1.25Mbps, which effectively made me lose all of my customers and i couldn't afford to keep paying the $2800 per month.

    So i cancelled, with about 18 months left which equated to around $55k. At the time I couldn't afford a lawyer.

    Luckily for me I have a very smart family member who helped me out + even luckier for me, when I cancelled one of the ISP's employees told a customer of mine he thought I was going broke. And although that lost my customer, it was breach of confidentiality on their part which made the contract of none effect and put them in a serious situation with the communications ombudsman.

    We ended up settling at $5k. But I was very very lucky!

    So yes unless you have some serious evidence that you can use to base the cancellation on, be very very careful.

    I was young and inexperienced then - taught me a lot!
    :wow:


    I feel bad for you, that $5,000 could of been spent elsewhere

  17. #17
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    Tell me about it i lost ~$50kAU out of that venture....

    But thats what happens when your young and think you know everything... I was only 19 when I signed the contract...

    If had known what I know now, I could have made that venture huge with that kind of capital. Considering now, we have a thriving business which I started with no capital.

  18. #18
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    Quote Originally Posted by envisage View Post
    Tell me about it i lost ~$50kAU out of that venture....

    But thats what happens when your young and think you know everything... I was only 19 when I signed the contract...

    If had known what I know now, I could have made that venture huge with that kind of capital. Considering now, we have a thriving business which I started with no capital.
    I get 20Mbps home internet for $99 a month, I think.

  19. #19
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    This is Australia, not US.

    And this was fiber with SLA's etc but yes definitely a rip job. Now for $1000 per month we get racks with 100Mbps uplink, $1.00 per GB bandwidth which is pretty good for here.

  20. #20
    XO SLA is a two-fold issue. Its worded in a way that mathematically is absurd.

    Also, the promises they made were verbal, so even though they said Fiber, thats not what was in the contract. The contract just says 20Mbps.

    As for the SLA wording....

    The SLA is 65ms average across the network for a given month.

    So they can have 40ms for almost the entire month, then for a 6 hour period have 300ms. That still averages to less then 65ms, so the 6 hours of 300ms is within their SLA.

    Same for thing for packet loss, the SLA is less then 1% averaged over the month. Again, they can have 0% packet loss for almost the entire month, then for 6 hours have 15% packet loss, still averages to less the 1% - but we can all agree 15% packet loss for 6 hours is almost like your down.

    And outage SLA is from when you call and open a ticket, sometimes they are down 20 minutes, but that is not enough time to be alerted, call in, and open a ticket. So that 20 minute outage never gets counted. If its planned maintenance, and they email before hand, it doesn't count as an SLA outage. This is how its worded in the contract. I had 7 planned outages adding up to 3 hours of downtime - definitely abuse on their part - but within their contract.

  21. #21
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    It definitely sounds like abuse, but like you said, if it's within their contract, there isn't much you can do since you agreed to that. The advice of talking to a lawyer stands, they may find something in the contract that would allow you to get out.

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