Q: How does a VPN cut long-distance phone charges?
A: Virtual Private Networks can potentially save telecom costs in a number of areas. In many cases VPN management is outsourced and there is reduced need for equipment such as modems, routers and access lines. Charges may be decreased because employees dial out to a local Internet Service Provider instead of making a long-distance call.
Return on Investment (ROI) can occur fairly quickly depending on size of the organization. To support 25 to 50 users, for example, a company would need equipment such as a VPN gateway or stand-alone dedicated device. They might also have to VPN-enable routers or firewalls. These types of upgrades can cost just a few thousand dollars, which is what some companies spend on long-distance in a month or two.
Q: I called my local carrier and requested a service disconnect on a T-1 line. They told me there is a penalty for disconnection and it is under contract. This was news to me and I asked for a copy of the contract. They told me it is under a verbal contract. Is this real or a scam?
A: Verbal contracts are prevalent, particularly among local carriers. There is no paper contract, just a verbal commitment to keep the service for a particular number of months at a set monthly price. If the service is terminated before the term duration is satisfied, then a penalty may apply.
Ask the provider for details of the contract in writing with the name of the person authorizing it and ask for a copy of the tariff. In many cases the verbal contract is legitimate. In any case, the penalty should not be more than the amount of money paid had you kept the service. If you discover the penalty costs more than keeping the service for the duration of the term, then consider keeping it even if unused to reduce the financial loss.
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