More Woes for More Wire

Since first writing about More Wire, Inc. in March and its ICallSmart program, I have been hit with a firestorm of complaints from ISP owners and operators claiming that the VoIP program is a sham. MWI says otherwise.

by Jim Thompson [May 10, 2002]

Disgruntled ISP operators accuse More Wire, Inc. (MWI) of over-billing, delivering poor quality of service and, in some cases, out-and-out fraud. MWI claims these accusations are false and disputes the allegation wrongdoing. The company says that if an ISP is not making money, it's because they have a poor marketing plan or because their customers are abusing the service.

Upon further examination, I found the story of More Wire, Inc. to have more twists, more turns, more highs and lows than the streets of San Francisco. It's now clear there is more to this company and to this story—it bears a second, closer look.

MWI provides ISPs with the opportunity to offer customers unlimited long distance calling throughout the U.S. and Canada via their VoIP network. They suggest ISPs charge customers about $40 a month for the service.

The company says all an ISP needs to setup the business is a Cisco AS5800 Gateway Server, up to four incoming primary rate interface (PRI) T1s, a dedicated access connection (data T1), a radius server and a location (rack space).

According the MWI, it's a simple plan with potential for big profits. "Billing is based on bandwidth usage with a basic cost of $400 per port. An ISP can reach a 'break even' position, with 300 customers," said Allan Shepard, vice president of More Wire, Inc. who expressed surprise when I asked about the complaints.

Problems, problem, problems ...
I talked with several ISP operators who claim that there is no possible way to ever make a profit with MWI.

"It's the worst thing I have ever experienced in terms of a con game," said former MWI customer Mike Bridge of Continental Telecom in Rapid City, South Dakota. "We are going after them on criminal charges in Montana and we want to pursue a federal case. These guys are crooks and I would tell anyone that. I would tell them that to their face."

Anderson Grogen of MTS Global Communications, LLC, an ISP in Denver, Colorado, said he agreed to allow MWI to terminate traffic on their equipment at the same cost they were billed by WorldCom.

"They left us holding a bill for $171,000 for telephone charges which they now refuse to pay," complained Grogen.

He added that the actual cost was 5.2-cents a minute from WorldCom and about 7-cents a minute from AT&T but MWI later said they agreed to pay only 4-cents a minute. "Why would I charge them less than I am paying," said Grogen. "It just doesn't make any sense."

A former employee, who asked not to be identified, told me, "He [Anderson Grogen] put his entire business on the line for More Wire. I am not surprised at all. They never pay their bills."

MWI counters that they can get a rate of 4-cents a minute "from anyone" and would never agree to a higher charge. They also claimed that there were some problems with the billing from AT&T. "In some cases there was metered rate billing from AT&T in excess of 35-cents a minute," said Shepard. "I think Anderson Grogen told us not the pay it [the bill]."

Exclusive rights
Another complaint involves charges for licensing fees. "We bought a license for the rights to the state of South Dakota [from MWI] for $100,000 and found out that the license had been sold twice before," said Bridge. He added they were charged another $50,000 by MWI for an 800 number that was never installed.

According to Bridge, MWI told him that their costs were "twice as much" as what they billed him and offered to settle the dispute by reimbursing Continental Telecom $14,000. He added that even that amount has, so far, not been paid.

A former employee added, "they [MWI] stole $100,000 from Continental Telecom, refused to pay it back, refused to even attempt to put in an 800 number. It was out-and-out, 100-percent fraud."

"We never, ever gave anyone exclusivity—absolutely, never or ever will," More Wire's Shepard protested. "What we did give them [customers] was non-solicitation so you [the ISP] can have South Dakota and we will not go in there and sell anyone."

In a letter, sent at a later time, he said, "We have never offered regional exclusivity to anyone nor do we sell a telecommunications license."

As for the non-solicitation costs, Shepard claims, Continental Telecom "negotiated and purchased rights to the whole state of South Dakota. A company in North Dakota wanted Sioux Falls and Rapid City and Mike [Bridge] knew this all along." He added that the company in North Dakota agreed to switch their agreement to Minneapolis/St. Paul, which left Continental Telecom with rights to South Dakota.

Shepard added that the 800 number, "has been up and running" for five months. "They never plugged in the circuits. We sent a company out to plug-in the circuits and they turned them away. I have a letter from Mike's major investor saying 'we don't want the toll-free number anymore.'"

Go to page 2: Allegations of Over-Billing >