The Wall Street Journal has noticed that Vonage (NYSE: VG) is fighting a PR campaign against Verizon (NYSE: VZ). The voice-over-IP company is trying to claim that Verizon's lawsuit over Vonage's use of its patented techology is really an attempt to shut the smaller company down.
From The Wall Street Journal: "In a series of full-page ads in several major newspapers in recent days, Vonage said it benefits consumers by providing competition to higher-priced phone service from Verizon. 'Now, Verizon has chosen to attack Vonage in the courts,' one section of the ad read. 'Why? Could it be all about the money?'"
Well, of course it is about money. VoIP products from Vonage and the major cable companies are taking millions of landline customers from Verizon and AT&T (NYSE: T) each quarter. Just one company, Comcast (NASDAQ: CMCSA) added 571,000 new voice customers last quarter. Those customers come from the phone companies. And, the Comcast service is now available to 35 million homes.
The large phone companies find themselves behind the curve. It will be another two years before their fiber-to-the-home networks are large enough to effectively compete with cable companies for bundled voice, TV, and broadband products. And there is no guarantee that they will be able to switch cable customers over.
It is all about the "Benjamins." Wall Street should not be surprised if Verizon eventually files patent suits against the cable companies as well. If the telecom firm owns the intellectual property, why should it let competitors use the technology against it.?
Douglas A. McIntyre is a partner at 24/7 Wall St.



Reader Comments (Page 1 of 1)
4-29-2007 @ 3:36PM
MikeinNH said...
I guess it's just easier for a company to pay their high priced attorneys to file patent infringments on companies who beat them at their own game than it is to actually spend the money and develop a better product. Just look at Microsoft for example. Over 90% of computers run the platform, we as computer users by their computers even though there are other choices, but others such as Lynix and other OS system creators sued and why? Because they couldn't come up with a better product than Microsoft so to level the playing field a bit, they sued Microsoft for being a monopoly and welding too much control and for stealing their patents and ideas. To these companies, either come up with a better product to beat your competitors or sit back and shut up. Simple as that.
4-28-2007 @ 10:04PM
lauren said...
HOnestly, I have FIOS internet and phone service. It far surpasses Time Warner (cable available in my area) and VoIP is just horrible. It is like talking on a cell phone in your own house. I stopped calling someone because I was tired of hearing myself speaking to her in the earpiece. So while it might be higher technology, the past has proven that LESS sometimes is more. VoIP sucks.
If their fiber optic phone service is better than cables VoIP, I am sure the TV service will be just as good, if not better than it is now with cable. Time Warner should have kept their noses in the television business and stayed out of phone services. THey have some nerve charging what they do for the BASIC package.
Those companies might have sued Microsoft for causing a monopoly but honestly, we as computer users are at the mercy of microsoft since they are the only ones who are reputable enough to purchase...look what happens. Vista happens. It is almost as bad as Millenium. The only good thing about Millenium is that it came off the market almost as fast as it was on. BIG companies like Microsoft are taking advantage of our vulnerability and now making us PAY to test their products at a BETA level. The system was not ready to come out and is horrible. So instead of buying a computer with the goold ole XP on it, we have to take our money and spend more to make the system functionable. Forget all the past money we have spent because those programs arent compatible with Vista.
4-29-2007 @ 7:16AM
art said...
I do not use VOIP (yet). I do use internet extensively. I beg to differ with lauren and MikeinHN. I have been using Microsoft for years and have been consistently disappointed with its products and support.
What is more troubling is MicroSoft has purchased, predatory priced or altered APCs/file formates (internal software application procedure calls) to insure any potential competetor is at a serious disadvantage.
The fact is, there are better products for much less cost than Microsoft and Microsoft is very concerned and they should be.
I now use a Mac OS-X which is based on FreeBSD UNIX, an open source unix system. I also use FreeBSD directly on former MS-Windows based systems. When coupled with KDE windows manager, and OpenOffice.org, these are indeed better, faster and more reliable operating systems and applications programs than Microsoft. The are standards based, fully meet ISO specifications for document interchange and are as easy or easier to use than microsoft. And the best part is they are free except for the time it takes to download the software and install it, which is not markedly different than microsoft. The support is far better and again since these opensource projects are used world wide, many people contribute to their development and support. A question on one of these products is answered, frequently within minutes to a query. When we were running NT, I my programmers would wait on the phone for a microsoft rep who was not knowledgable for hours only to be told the problem was not microsoft's. And we paid a dear price for this lack of service.
I estimate by going to FreeBSD Unix/KDE and OpenOffice, we have saved several hundred thousand dollars in dataprocessing costs per year.
Remember, once upon a time, people bought IBM computers because "Nobody ever got fired for buying IBM," despite the far superior options on the market at the time. Substitute Microsoft for IBM and you have the same quote. It boils down to marketing.