The Zyan mess
(old news - 01:47PM Tuesday Dec 19 2000)
Zyan operated for some time as an ISP for ISPs, although they were also happy to take orders direct. Zyan offered attractive terms to DSL resellers that allowed the reseller or smaller ISP to concentrate on sales, marketing and customer interaction while Zyan handled the aggregation of orders and economies of scale... that was the idea anyway. Zyan filed for Chapter 11 a short while ago, which protects them against the claims of creditors.. they have refused to release the lines sold by the ISPs which otherwise could be moved via an "ISP switch" to a larger more stable ISP. Zyan have also distributed bills to their partners that are supposedly incorrect: double-counted or contain disconnect fees or missed appointment fees that were due to their error. In some cases the are also double or triple charging for backhaul fees. The first bankruptcy hearing for Zyan went in front of the Judge on 15th December in LA. Creditors report that Zyan is $34million dollars in the hole. A chunk of this money is owed to Covad and NorthPoint, the rest would be unpaid finders fees, equipment, rent and so on. They have 18,000 working lines held hostage (mostly customers of ISPs now being billed by them). As long as these lines remain operating the debt to Covad and NorthPoint will continue to mount. This debt is quite astonishing: almost $2000 a line, many of which represent $50-$100 dollar a month revenue before expenses and a sliver of profit. Zyan are attempting to trade their way out of bankruptcy and have submitted a BK11 budget that comes to 1.3million a month (400k for employees, 600k to pay Covad/NorthPoint/Netrail, and 280k admin), leaving little or nothing left to reduce the $35m debt. The Zyan workforce, cut 70%, would also be unable to deliver the quality the customers and ISPs signed up for. Covad petitioned the judge that since Zyan were clearly insolvement, they should make them (Covad) a secure creditor, and wind up the whole show. Initial reaction of the court to this idea was not favorable. Zyan has around 120 resellers/ISPs caught in this trap. It would seem that to get some kind of resolution for them and their customers they need to get in touch with each other and pool legal resources. If you are a Zyan partner and wish to get in touch with others discussing this problem, we recommend you join the private ISP Chat board.
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 | Anon |  Zyan is pure evil
I actually try to go the sneaky way and just dial random employee extentions I got one guy who said he was on his cell and told me to go away.
These people didn't tell me anything about my problems and after many messages and a fax they still did not get back to me. I called up Northpoint and they are helping me with my problems. I hope this ISP is doomed and Northpoint move me over to a different provider. | |
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Kangaroo
join:2000-08-11
Peoria, AZ
clubs: | Re: Zyan is pure evil Unfortunately you (your contract really) are/is an asset of a company in Chapter 11 proceedings and they will not/cannot release you. If you are month-to-month, flee. | |
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RARPSL
join:1999-12-08
Suffern, NY
edited
| Re: Zyan is pure evil said by Kangaroo:
Unfortunately you (your contract really) are/is an asset of a company in Chapter 11 proceedings and they will not/cannot release you. If you are month-to-month, flee.
I am in the same position vis-a-vis Flashcom/NP. I spoke to my lawyer and asked him what my options are and he told me that since my contract has a clause allowing me to terminate early, that I am entitled to get the line swung any time I want so long as I am willing to BUY-OUT the remaining term as a lump sum payment. An offer of this type TRUMPS the Chapter 11 proceedings and a refusal by the ISP is an AUTOMATIC release of the line for me to switch. In either case they MUST maintain the Email Accounts until my original contract term date even though the line is not connected to them anymore (especially if I do a Buy-Out). How long does your contract have to run? You might consider this option if you are willing to pay the cost. NP/Covad can NOT refuse to swing you once you make the offer. A check enclosed in the letter will lock it in (just send it Registered/RRR). BTW: An unopened rejected letter of this type is LEGAL Delivery so the ISP can not get out by not accepting the letter.
[text was edited by author 2000-12-19 18:10:31] | |
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Zyanite
join:2000-12-05
Santa Clarita, CA
| Yes, my handle clearly shows me as biased, but let me point out to you the vast number of ISPs that are in the same (or worse) situation than Zyan. It seems like every few days another DSL provider is reaching the WTF moment (for lack of a better term) when they realize that the dream, or the vision, or the business plan -- whatever you want to call it -- isn't working, and given current market conditions, isn't going to start working any time soon.
No one at Zyan is Evil. In the same way, no one at Flashcom/PSN/Sunfast/Whatever.com is evil either. Every business owner in this space started a DSL company because A) there's a demand for broadband B) they thought they could do it, and make some money doing it too.
The employees who remain at Zyan are working their buns off, each carrying the workload of 3-5 employees and trying their best to meet the needs of all of their customers. But they're also trying to simply survive in a time which, as this report points out plainly, is increasingly difficult.
I don't know where you work, or what industry you're in, but I know that no one at Zyan hopes your company fails. And I wouldn't hold out too much hope that Northpoint moves you to another ISP. They're all in as much trouble as Zyan, and Northpoint... well, they're not too far behind as well.
For myself, I hope Zyan survives, or at least finds a solution that allows their customers to not lose their DSL. I also hope that somehow some sense and reasonability emerges from this chaos-ridden market. I also hope that Wall Street eases up on the screws a little, and realizes how badly they're mangling this industry.
Boy, wouldn't that be a great Christmas present! | |
| | | | Anon | Re: Zyan is pure evil For the most part I agree with your synopsis of the DSL environment, particularly the issue stating that Zyan is not evil. But many of their business practices are HIGHLY QUESTIONABLE. I was one of the top producing sales people at Zyan, (so perhaps I suffer from your bias also). I saw some red-flag warning signs which gave me enough time to bail out months before the Black Monday layoff. There is no question the industry is in an economic downturn. However, I disagree with Zyan's maltreatment of their CUSTOMERS and EMPLOYEES (both existing and former)!
1) CUSTOMERS: Many customers I signed up were based on the RESELLER relationships I built in the 2 years I was with Zyan, I am proud to say many resellers became friends and as friends we shared in the expectation of providing profitable broadband services to their customers. So what went wrong, you ask? There were many contributing factors so here are just a few:
(a) Billing – Zyan attempted to graduate from the elementary Quickbooks over-the-counter shrink-wrap to the elaborate Great Plains Accounting Software (not only a huge capital investment, but also an implementation debacle). The accounting software took 3 months to implement and in the mean time many resellers did not receive bills, then when they did one quarter later they were dumped with a huge lump sum full of errors, including; non-repaired disconnection fees, discounts not applied, etc. All in all, Zyan has never recovered from this initial Accounting Department disaster and it’s been uphill (wrong!) ever since. These repetitive incorrect monthly bills created tension with many resellers – and Zyan arrogantly still maintained no errors or wrongdoing. I know firsthand that several resellers were getting billed for gear despite “Free” equipment clauses per their contract over several months. Yet, Management/Accounting chose to ignore my complaints! Even, though I come from the school that says you should always pay your bill, this philosophy is difficult if your bill is continuously wrong. If resellers don’t pay their bills, Zyan cannot pay Covad/Npoint, thus the vicious cycle.
(b) Technical Support (English as a second language) – If you have 18,000 or so customers one would believe that Management would ramp up that department to support the demand, did this happen? Uh- uh! Resellers were given a hotline, yet their hold times were longer than the general public’s. As I sat in a meeting with a Reseller I cringed when we called Zyan’s Tech Support only to wait 1 hour (the length of the whole meeting) on hold. Again, I complained to management only to be told that I was probably exaggerating? The audacity and arrogance should become apparent to you now. Which is to say that reseller fired Zyan (me) as a vendor (big shocker?)
2) EMPLOYEES – the lifeblood of any company. I’ve been silent about this issue for quite some time, but let me say that certain Zyan managers looked me and other employees in the eye and blatantly lied to us. We were told that we could no longer provision Covad circuits because we had a backlog of orders. The truth was because Covad actually cut Zyan off. We were told we would be reimbursed for travel expenses. Yet, many former Zyanites now have to file post bankruptcy petitions to recover any owed monies.
Why would Zyan treat their customers and employees this way? I have no idea, don’t get me wrong I’m not bitter, instead I am rather grateful to Zyan for giving me the opportunity to earn a six-figure income and to gain experience in the tech/telecom space, but when I started to question the company’s motives and integrity I knew it was time to leave for a far greener pasture. I just feel bad for my many friends, former co-workers and customers that were put behind the Zyan 8-ball.
Also, as a former Wall Street employee, I’ve learned many lessons --- Wall St. has no mercy. Wall St. is not mangling this industry as you put it. Poor execution is hurting this space. Every industry is cyclical. Analysts base their projections on leading indicators, earnings estimates, and profitability. If Zyan can’t provide a quality service at a profit, then Zyan deserves to go bankrupt. Now I’ve heard that certain executives are selling their homes and Chapter 11 will be replaced by Chapter 7 (total liquidation). Good Luck and Sorry for being the Grinch, but reality sometimes hurts…
Bud Fox
PS. Gekko says short sell COVD, it can only go to ZERO! | |
| | | | Anon | I’ve waited a very long time to post anything here, probably too long. Here is the bottom line with Zyan. The management is Evil. Flat out. They lie, they renege on their contracts, they “try” to use scare tactics and they are just slimy people to deal with. Zyan consistently makes errors in billing into the 10’s of thousands of dollars and then try’s to collect it using “scare” tactics. God forbid you try and doubt them. They bill me for lines that do not exist, no exaggeration, the honestly are not existing customers. They billed me cancellation charges for customers who didn’t fulfill 1 years worth of service even though the reason they didn’t fulfill the 1 year contract is because they were rejected and were not eligible for DSL. What??? Now I have to pay a cancellation fee for every customer who attempts to get DSL. Believe me, I am not perfect, if this happened one time I would understand. Twice I still understand, but Zyan billed me over $4,000.00 worth of these bogus charges. They billed me for hardware twice.
It like talking to someone and knowing that every other word that comes out of their mouth is a lie.
I worked with Zyan for a very long time. I dealt with some techs who were completely clueless. I blame this on Zyan management. They hired unqualified techs and didn’t properly train them leaving me having to explain in many cases how to remedy basic problems. The Zyan employee were not bad. I am sad because I met many very cool Zyan people, people who were both cool and tried to get things right. Funny they are gone yet the management people are still their. It should be against the law for what many of these so-called managers are doing and it may be….I’m looking into that now. And no I am not one of those disgruntled ISP’s who didn’t pay their bill. I paid Zyan money in the past. I can and will pay more bills in the future BUT ONLY IF ZYAN STEPS UP TO THE PLATE AND STOPS LIEING ABOUT EVERYTHING! Look…..I know how business is, you get into a money crunch and the bottom line is you need money. But treating customers like shit isn’t the answer. Why can’t Zyan’s management just grow up and face the music instead of playing these petty games? I have a real business to run and I will do it with or without Zyan, but if Zyan wants my money I demand honesty and integrity, both of which Zyan management has not displayed.
I’m sure some Zyan advocate will read this and rip me apart as I have seen on many other postings and that’s fine, I don’t really care. I’m not writing this to be spiteful. I am writing this because I am into this up to my ears and have the right to express the truth. | |
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Kangaroo
join:2000-08-11
Peoria, AZ
clubs:
| I work for a 35 year-old technology leech. Your company and its treatment of its customers is/was inexcusable. You, and your company deserve your fate. No one forced your hand. Along with many others I've seen come and go. Hide behing the people at Zyan? That's weak. They can get jobs. The only ones left are vested or silly. Your company is done, give up.
Try to defend the management of such a bleeder. In the vernacular: Your SH*T IS WEAK.
ZYAN, DEC, DIGITAL RESEARCH, KAYPRO, and many other dumbasses. | |
| CharlesSchwab
join:2000-12-01
Kansas City, MO
|  Sue Me
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KrK
Heavy Artillery For The Little Guy
Premium
join:2000-01-17
Tulsa, OK
 ·Cox HSI
 ·AT&T Southwest
| Re: Sue Me Doesn't work.
Or it didn't work in my case, anyhow. I once had a credit card go missing, and having no idea where it went, I reported it as missing/stolen.
The credit card company quickly issued me a new credit card with a new account #. When I started contacting some places I had had set up to do automatic deductions I was stunned to find out the credit card company had already "switched" them over to the new account #.... Which at the time was handy for me, saved me the work... but they did this without asking me or telling me, which really surprised me.
Basically, I don't think changing the account number will necessarily stymie the charges.
Now CLOSING the account, that's a whole different story... | |
| | Anon | Northpoint Prevails
If you use Northpoint and have a problem with Zyan you can move over with no charge to a different ISP. I'm thinking about Internetconnect. | |
| | | Anon | Re: Northpoint Prevails You might want to check the company death watch list before switching to InternetConnect... | |
| SMALLBLUE
join:2000-10-18
Redondo Beach, CA
|  Advice for a small company
I do not want to risk the fortunes of my company on Zyan, now that they are in bankruptcy. My whole business (which is doing great) would grind to a halt without the DSL service. Does anyone else have first hand knowledge of the difficulties in getting out of the contract and switching ? (My contract is with Zyan, directly). In my mind, even before going into bankruptcy, they never delivered on the service level terms of their contract. | |
| | ethaves
join:2000-05-19
Milwaukee, WI
| Re: Advice for a small company We face circumstances similar to that which you described. One might argue that Zyan made an implied contract when it communicated that tech support was available 24/7. When the company layed off a majority of its workforce and dramatically cut the hours for tech support, its breached that contract. There may be other instances of this--such as with service level promises made.
We believe that Zyan has also breached a specific term of the contract by failing to deliver 99.9% uptime. Documentation in any legal dispute is critical and so is patience.
You may also want to consider the benefits and consequences of other courses of action, such as allowing your account to become delinquent and forcing them to disconnect your service. It is likely that Zyan will not be purchased nor find its way out of its financial mess, so you may want to wait for the company to go under. | |
| | 
SomeHope
@anonymizer.com
| From what I know Zyan's standard consumer contract is VOID and not enforceable in California courts due to the simple fact that they cannot produce an original contract. Remember we all faxed in our contracts to them, so they do NOT have an original contract to present in court. Think about it California is the most consumer friendly state in the Union, no Judge will take a photocopied signature seriously, who knows what terms a company could have put on that signature. I haven't paid a bill in over 5 months and when their collections department called me (the manager), I brought this fact up and told him to please take me to court so I could win. Well, they haven't, nor have they sent me to any collection agency. The key here is that you are terminating your agreement based on the fact that is simply not legal. Therefore, you must cease using their DSL service when you stop paying. They can check this fact, so as long as there is no traffic on your router you will be find. Resist the temptation to use the service and you will be fine. As far as another DSL ISP, Earthlink is doing quite well and they include 20 hours of dial up for back up . . . all for $39.95 a month. Good luck to you all and Happy Holidays. Zyan deserves to be boiled in their own pudding! | |
| | | ethaves
join:2000-05-19
Milwaukee, WI
| Re: Advice for a small company said by SomeHope:
From what I know Zyan's standard consumer contract is VOID and not enforceable in California courts due to the simple fact that they cannot produce an original contract. Remember we all faxed in our contracts to them, so they do NOT have an original contract to present in court. Think about it California is the most consumer friendly state in the Union, no Judge will take a photocopied signature seriously, who knows what terms a company could have put on that signature.
What makes you believe that this is accurate? Might you be able to direct me to the statute in California law that indicates this? I have searched Findlaw.com and other resources and have not seen mention of this. I know others would also find this of value. | |
| | | | | | dbarc
join:2000-01-22
Fort Wayne, IN
| said by SomeHope:
From what I know Zyan's standard consumer contract is VOID and not enforceable in California courts due to the simple fact that they cannot produce an original contract. Remember we all faxed in our contracts to them, so they do NOT have an original contract to present in court. Think about it California is the most consumer friendly state in the Union, no Judge will take a photocopied signature seriously, who knows what terms a company could have put on that signature.
I can understand the frustration, but feel your post may not be totally accurate. For one, the Zyan is now in bankruptcy. That's a FEDERAL court, not state. The validity of any contract will not be determined by California state laws. Though IANAL, I'm not aware of a signature on a fax not being accepted if the signature is a legitimate signature and have seen many many many of then accepted as being binding. I think the best bet is that they simply haven't provide the service for which the contract applies. But to get out of it now, IMHO, it'll take the blessing of the bankruptcy judge ( or an appointed trustee or referee) if you don't want to pay cancellation fees that may be included within the original contract. | |
| | 
Air WAV
join:2000-09-16
Saint Louis, MO
| It was only a matter of time. I posted here in September of the "Evils" of Zyan when they breached our contract for DSL. They blatantly contacted our enduser telling them that we were out of business. That very same day they sent us an invoice for the next month of service (October) and in no way stated that they were shutting our services down.
I am sorry that so many more companies are now getting the "SunFAST DSL" treatment. But I am more so sorry for the enduser that is left without service and has no place to turn because Zyan will not release their circuit.
We are currently working with the legal authorities in California (where SunFAST DSL and Zyan are based) to press criminal charges. It is a crime that they have committed, besides unfair business practices.
Good luck guys, I hope that Zyan has to pay one way or the other.
Victoria Proffer
SunFAST DSL
thegeek@SunGeek.com
--
Who was it that said "the geek shall inherit the Earth?" | |
| 
silverton
join:2000-08-10
Palo Alto, CA
| On the contrary I have no interest in Zyan whatsoever, I am not a reseller. I have, however, set up a few small business clients with them and the service was nothing short of excellent -- particularly when the set me up in areas where PacBell said DSL was impossible.
I found out about this problem when they canceled another install which was scheduled for this week. The troubles outlined on this message board are news to me; maybe I was one of the random, fortunate few.
Obviously, my case is atypical for this forum. All I know is that I have some confused -- but otherwise never displeased -- customers to contend with. Any ideas on how to neatly transition to another provider? Can we go directly to parent Covad? | |
| | Anon | ISP switch work around I think the hardest part about obtaining a DSL line is obtaining facilities from the local phone company.
If you already have a working line then chances are additional facilites are available.
If I had a buissness that depended on my DSL connection and I were with a company in a situation like Zyan I would simply order a new DSL line from another ISP. Once it was up and running I would pay off the remaining contract term or terminate the account.
This is a rather harsh work around if they dont want to authorize the ISP switch but depending on your needs it may be worth it. | |
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. I hope the management or what's left of it burns in hell for their incompetence.