How do I handle a supplier that delivered a faulty product?

Hello,

We are a small FTTH provider and our main business is selling 1000/1000
internet. Our network is GPON based.

We recently made the mistake of buying a large shipment of Zhone 2301
modems (ONU). We did test this device before purchase, but unfortunately we
failed to notice a severe fault with the product. Soon after putting it
into production we got many complaints from customers that the modem would
crash daily.

Turns out that the device can not handle download streams at or near 1000
Mbps. Especially if the download originates with a server that is 10G
connected.

GPON downstream is actually 2.4 Gbps. The modem has to deliver on an
ordinary 1 Gbps ethernet port. This means the packets can arrive faster
than the modem can hand it off on the ethernet side. And when that happens,
it will simply crash.

The vendor then told us to limit download speed to 750 Mbps with a small
buffer of 50 KB. Any faster and the modem can crash amongst other issues.

When I told them I do not think I can sell 1000/1000 Mbps internet if I
limit the modems to 750 Mbps, as that would be false advertising, I was
simply told that the 2301 is a low cost solution, so deal with it. They are
not going to work more on fixing the issue.

The website and the datasheet does not say anything that would warn you
that this product can only handle 750 Mbps:
http://www.zhone.com/products/ZNID-GPON-2301/ZNID-GPON-2301.pdf

So what do I do now? I am thinking Zhone needs to resolve this in a
satisfactory way, which is to either return my money or switch the product
to something, that actually delivers what was promised. We have some of
their 24xx series and that works perfectly well. So we know it is just the
2301 that is bad. Unfortunately we are apparently to small a customer to
them.

As this is an USA supplier, will suing them help me any? Yes I know, don't
ask for legal advice on a mailing list, and I am not - I just want to know
some opinions if that is even worth considering. Or if I will just have to
eat it and drive the whole shipment into the harbor.

Regards,

Baldur

Baldur Norddahl wrote:

Hello,

We are a small FTTH provider and our main business is selling 1000/1000
internet. Our network is GPON based.

We recently made the mistake of buying a large shipment of Zhone 2301
modems (ONU). We did test this device before purchase, but unfortunately we
failed to notice a severe fault with the product. Soon after putting it
into production we got many complaints from customers that the modem would
crash daily.

Turns out that the device can not handle download streams at or near 1000
Mbps. Especially if the download originates with a server that is 10G
connected.

GPON downstream is actually 2.4 Gbps. The modem has to deliver on an
ordinary 1 Gbps ethernet port. This means the packets can arrive faster
than the modem can hand it off on the ethernet side. And when that happens,
it will simply crash.

The vendor then told us to limit download speed to 750 Mbps with a small
buffer of 50 KB. Any faster and the modem can crash amongst other issues.

When I told them I do not think I can sell 1000/1000 Mbps internet if I
limit the modems to 750 Mbps, as that would be false advertising, I was
simply told that the 2301 is a low cost solution, so deal with it. They are
not going to work more on fixing the issue.

The website and the datasheet does not say anything that would warn you
that this product can only handle 750 Mbps:
http://www.zhone.com/products/ZNID-GPON-2301/ZNID-GPON-2301.pdf

So what do I do now? I am thinking Zhone needs to resolve this in a
satisfactory way, which is to either return my money or switch the product
to something, that actually delivers what was promised. We have some of
their 24xx series and that works perfectly well. So we know it is just the
2301 that is bad. Unfortunately we are apparently to small a customer to
them.

As this is an USA supplier, will suing them help me any? Yes I know, don't
ask for legal advice on a mailing list, and I am not - I just want to know
some opinions if that is even worth considering. Or if I will just have to
eat it and drive the whole shipment into the harbor.

If it doesn't deliver to spec, that certainly seems like a warranty claim, followed by a lawsuit (yes - talk to a lawyer).

Also, define "large shipment" and total dollars involved. You might be able to take them to small claims court (much simpler process, but generally for $10,000 or under).

Miles Fidelman

Disclaimer: I am not a lawyer, and I don't play one on TV.

Don't be afraid to march this up the chain at Zhone, if you're dealing with a salescritter. You might be able to get better responses from VPs or CxOs. Keep the lawsuit option in your back pocket if you need it.

Many companies don't want the PR black eye that comes with a customer filing suit against them, so the threat of beating them with a stick can be just as effective actually carrying out that threat. If you have a lawyer on retainer already, maybe have them on the phone with you when you speak to the CxO at Zhone.

If their product is advertised as providing a service that it can't/won't actually provide, whether it's positioned as a low-cost product or not is irrelevant. If their data sheets make no mention of the limitations that have been found, that's more ammunition for the cannon.

Before anyone comes back with something like "So if I buy an entry level car, but I expect it to perform like a high-end sports car, does that mean I can sue the entry-level car maker for false advertising when it doesn't perform like a high-end sports car?" No, it doesn't. There are reasonable expectations. Expecting an entry-level car to perform like a high-end sports car isn't reasonable. Expecting a GPON modem to be able to forward wire-speed gigabit Ethernet in this day and age is perfectly reasonable.

jms

Actually, this situation is as if you bought a low-end car that claims
it can go 60MPH just like a high-end sports car which also claims to go
60MPH. But when the low-end car fails to achieve 60MPH and in fact
blows up when you try to reach that speed, you do have grounds to cry
false advertising.

According to the spec-sheet pointed to by the OP:

  "GPON Rx
  - Downstream data rate 2.488Gbps"

So the fact that the device fails to survive much less achieve the
claimed rate is, I would expect, false advertisement... especially when
the manufacturer acknowledges the discrepancy and refuses to take
measures to remedy the situation.

At this point, the OP may be at risk to his customers as well so it
would be really in his best interest to pursue this as far as possible
which may include legal action.

If we're going to pick analogies, let's pick a good one. This is a car
advertised to go 60 mph. But it turns out the car only goes 60 mph down
hill... On a 1 degree incline it tops out at 45.

And yeah, that's a lemon. If the vendor has not supplied a technically
appropriate solution within a reasonable amount of time, they're in breach
of the implied contract of fitness for purpose. Unless of course you
-signed- a contract which says otherwise or their shrink-wrap contract has
effect (only Virginia or Maryland). You may be entitled to more than a
refund, such as any business losses from the failure of the product to
perform as advertised, including lost customer good will and employee man
hours.

Baldur, I advise you to consult a lawyer. This is where a -letter- from
your lawyer to their lawyer (no lawsuit just yet) will yield action. It'll
make it clear to the folks on the business end that the technical end has
let them (and you) down more seriously than the normal bug complaints. That
letter won't cost you more than a couple hundred bucks.

Regards,
Bill Herrin

At no point does that spec say a single thing about speed. The closest
part I could find was "Upstream data rate 1.244Gbps", but I think it's
pretty clear that that is the link speed, not the actual data rate. It's
worth wringing them out over the issue, maybe you can shame them into
taking the units back, but I don't think you will have much luck pinning
them down legally on some nebulous belief that it would run at wire rate
gigabit.
Nick

Any router/modem that *crashes* when the input rate exceeds the
output rate is broken. A router/modem shouldn't crash regardless
of the data input rate. It might drop packets but not crash.

Maybe the bit-bucket got full?

Then the new packets should be dropped, but this seems like a
potential vulnerability. What it seems like to me is that the
bit-bucket is not size limited, and proceeds to overwrite other
memory, quickly killing the OS.

Hi Nick,

That's the beauty of the implied warranty of fitness for particular
purpose. The seller doesn't have to give any specs at all. He just has to
lead you to believe that the product is suitable for some purpose, such as
providing gige to customers. Sometimes, even the fact that the seller was
aware of the buyer's intended use and failed to warn him is enough. If it
then proves unsuitable for that purpose for any reason, the seller is on
the hook.

IANAL and I think Baldur should consult one before taking any action, but
unless Baldur's use obviously and significantly differed from Zhone's
advertised intended use Baldur probably has a case.

http://www.law.cornell.edu/ucc/2/2-315

Regards,
Bill Herrin

Hi,

Zhone reversed their stance on this and put everything on finding a fix.
Now we have a working firmware that moves data at line speed with no need
to put limits on downloads. Everyone are happy now. The 2301 with new
firmware is performing as expected and seems like a good product for our
needs.

Baldur

Good to see they came around. I take it they did not elaborate on their sudden change of heart?

jms

No, but I would say that they were afraid they might not be able to fix the
problem and somebody in the sales organization misstepped. Our reseller
went the extra mile for us and managed to escalate the issue all the way to
the CTO level.

Apparently it was not an easy problem to fix. The problem would be with the
chipset. Our reseller found a competing product that used the same chipset,
and they had the same problem. Only the competing product would be stable
at 950 Mbps instead of the 750 Mbps we had on the Zhone product. We agreed
with Zhone that if they could tune it to 950 Mbps, we could live with that
as "good enough". But in the end they actually managed to fix it
completely, so now the Zhone product is line speed and the competing
product is not.

Learning from this, I would recommend everyone considering a GPON product
based on a new chipset, to test how it performs when downloading at line
speed, especially if the source is a 10 Gbps enabled server. There is
apparently a bad chipset out there, that requires careful tuning for it to
perform to spec. Even if you are not selling gigabit, there are microbursts
that could cause trouble.

Our speedtests now looks like this:
http://www.speedtest.net/my-result/3962524900 - this is good as in reality
the speedtest is what people are buying...

Regards,

Baldur