When companies discontinue operations it's one thing, but when a company ceases operations without warning its customers something is fishy. When SunRocket did just this, red flags appeared in my head. Companies don't just close their doors one days for no reason, but it appears that SunRocket did just this:

"At the company's Tysons Corner headquarters, the phones went unanswered, the doors were locked and a cardboard sign with "Out of Business" scribbled on it hung inside the glass front door."

Obviously consumers who used the company's services were out of luck for the day, but it didn't stop there. In fact, many of these consumers paid for their services well in advance.

Although this seems like an isolated event, it casts further doubt on the entire VoIP industry. As a result, the primary VoIP provider in America, Vonage (NYSE: VG) is likely to lose some (more?) credibility. That being said, for many consumers the benefits VoIP offers over traditional phonelines are powerful enough to let them "roll the dice" once again. Some followers of this space who I spoke to are going as far as to say this could help Vonage because they will gain some of SunRocket's business, but I'm not sure about that and the impact wouldn't be significant because SunRocket's total customer base was about 10% of Vonage's current customer base.

However, if 8x8 (NASDAQ: EGHT) could pick up SunRocket's accounts, the stock would most certainly fly because of its small size - $82 million - and 8.7 short ratio.
The SunRocket news is a rather scary example of how consumers can suffer from purchasing products from an extraordinarily speculative company.
Going forward, I continue to believe the money in VoIP is going to be made betting on the infrastructure providing companies such as Ciena (NASDAQ: CIEN) and Level 3 (NASDAQ: LVLT). As it is painfully obvious from the chart on the right, investors who have been buying the VoIP providers have been struggling lately whereas those buying into the build-out providers have prospered. Anyone who has been reading my writing knows that I am a bull on both of these companies - for my take on LVLT click here and for CIEN click here.