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The End for Vonage?
TheRealSCA writes "The latest in Verizon vs. Vonage is in. The judge has basically stopped Vonage from accepting new customers. From the article: 'A judge issued an injunction Friday that effectively bars Internet phone carrier Vonage from signing up new customers as punishment for infringing on patents held by Verizon. Vonage's lawyers said the compromise injunction posted by U.S District Judge Hilton is almost as devastating as an injunction that would have affected Vonage's 2.2 million existing customers. "It's the difference of cutting off oxygen as opposed to the bullet in the head," Vonage lawyer Roger Warin said.'"
Our "intellectual property" system at work for you, ensuring innovation and -- as a nice side effect -- severely restricting competition in the marketplace. Hip Hip Hooray
My turnips listen for the soft cry of your love
Now that Verizon has more-or-less successfully defended their BROAD patents on VoIP stuff, I wonder how long it will be before AT&T/Cingular starts suing ALL of the other phone companies for violating THEIR patents.
I imagine that AT&T owns MANY of the patents on much of the phone technology currently in use. Or at least, owns patents that are "close enough" to successfully sue everybody for infringement.
It's all so crazy. The telecom industry in the US is fucked.
PWNAGE
Whooo-hooo, wooo hoo-hoo!
Whooo-hooo, wooo hoo-hoo!
Whoo-hoo-hoo, oooh-oooh...oops.
Well at least I can watch TV this weekend without having to watch any more of those annoying Vonage commercials...
Coldmoon over Dark water...
Patent infringement is NEARLY always about one big guy versus another big guy -- or a big guy versus a little guy. How often do patents actually help individuals rather than mega-conglomerates? Even if you have a small business with various patents, can you afford to protect them in court?
Vonage lived by the sword -- they themeselves believed in patents. While I feel this judgment is counter-market, it doesn't cause as much damage as patents do in general. The idea that someone can monopolize the thoughts, motions or creations of another individual is ridiculous, especially in the multitude of patents we all know are ridiculous.
So be it. Whenever anyone who uses patents loses a patent war, they get what they deserve. I feel no pain for Vonage, nor anyone who decides to base their businesses on forcing other businesses not to compete in a certain way.
Rest in pieces, Vonage. Maybe Verizon will be next.
So you think this wouldn't have happened if Vonage hadn't pursued patents?
Let me add a dose of reality to your delusion. They simply would have been sued out of business sooner.
...you just made my choice a little easier. I'm a happy Vonage customer, and I'm also in the market for a new cellular provider. I can now scratch Verizon off the short list.
I bet they'll do almost anything to keep a customer since they can't add anymore.
In the US, at least. There's a world-wide market for this kind of thing however. US patent law isn't and can't be enforced everywhere (thank God!).
Seven puppies were harmed during the making of this post.
That's the problem. Vonage, like most young companies, is only solvent as long as they start taking in new customers. You slam the brakes on new signups, the whole house of cards can collapse.
I give Vonage six weeks. Hell, if they can't get this injunction lifted, and the don't find a way to work around it and sign up new customers, they may have six hours. We'll see how Wall Street responds to this news.
So where does this leave you if you're handing off your calls over a PRI using a Cisco router (with h323/MGCP) >
Keep in mind that the Markman hearing (to decide what the claim actually covers) adoption of verizon's construction of all the claims means that all of the patents read so broad that things like BIND and SIP infringe -- Add to that court irregularities: no patent case expertise and instead of days, there was only a 30 minute per side argument per side for 48 claims over 7 patents -- and there's a pretty strong case for appeal.
IANAL.
More than a few years ago, the big AT&T was forced to split up to remove a monopoly they had. Well, lets see, now SBC, Bellsouth, Cingular, DishNetwork and probably more I don't know of all fly under that AT&T banner. All reports of Qwest suck, and I have my own hatred for Vonage but it was a choice some found to be good. Where is all my choice going and why isn't someone in the government stopping this? The telecoms are raping the people AGAIN, and although not a monopoly yet, its getting to the point of being one if not something worse. Now that VoIP is being challenged, that could effectively eliminate even more plays like Charter and Comcast.
Some money will get passed around and this will get settled. Corporations don't just fold up shop so a bunch of Perl chimps can feel more righteous about their silly notions of "innovation".
What I'm listening to now on Pandora...
I think that Verizon is going to become a lot more interested in negociating with Vonage after this ruling. Why? Because if Vonage goes bankrupt, Verizon is likely to get squat in bankruptcy court. They don't have a lot of physical assets. They have a customer base - a loyal one. How many Vonage customers, having already switched from an RBOC, are going to switch BACK voluntarily?
Verizon viewed this as a way to get a piece of a growing market without having to invest anything. tey were going to use the patent to force Vonage to charge a "Verizon Tax" on their customers, which would make the service less attractive to users and maybe send somefolks back to the RBOC's - not to mention the fat licensing fees. But the judge may have killed the goose that lays the golden eggs.
"As God is my witness, I thought turkeys could fly." A. Carlson
disclaimer: I used to work for a company that provided VoIP equipment...
There's a whole shitload of VoIP providers out there. Most of them employ people with the technical ability of a rotted stump and will mis-route your 911 calls. It's a business plan that attracts venture capital but nobody who actually runs one of these places has more than a dozen brain cells. They want ATAs drop shipped to customers so they don't have to hold stock, they can't read an Ethereal (Wireshark, whatever) dump, etc. Vonage was the best of a bad lot, IMO.
Unless you do a lot of international calling, just keep your cell phone or pay for a land line. If you need international, Skype really is pretty good.
(to the tune of, woo woo, wo woo woo, from the vonage commercial)
woo woo, we got sued!!!
woo woo, we got sued!!!
woo woo, we got sued!!!
woo woo, woo woo,
woo woo, we got sued!!!
Bye Bye!
"It's the difference of cutting off oxygen as opposed to the bullet in the head," Vonage lawyer Roger Warin
cutting off the oxygen supply has long been a term used by management to describe a method of dealing with competition.
gun to the head references are more often used by unions (buzz hargrove comes to mind)
This could be not only the end of Vonage, but also the end of Asterisk, Skype and VoIP in general. I am not a Vonage customer and do not plan to be, as I prefer using Asterisk and small termination providers, which is much cheaper than Vonage. However, I think anyone interested in the success of VoIP should help Vonage win this fight, either by contributing money to their defense or protesting the decision to the Government. Letting Verizon get away with it would set us back 20 years or so until the patents expire.
I also wonder what will happen with all the hardware currently in stores that is set up to connect to Vonage. This may be a nightmare for stores and their unaware customers. I think they judge did not consider all the unintended consequences of his decision.
FTA: "The judge has basically stopped Vonage from accepting new customers."
But I can still go to their website and sign-up
Let's see, Vonage builds ... nothing and sells little boxes to people to connect to their Internet connection. This then connects to a couple of termination sites that either connect to other Vonage customers (maybe) or just dumps the call out on the standard telephone network.
Yes, individual calls out cost them something, but that infrastructure is built and maintained by the other companies. Generally, by the people too dumb to have switched away to Vonage and their VOIP ilk.
The problem is that Vonage is 100% dependent on the telephone network they are competing with. They are selling a service which requires their competitor to operate. This is generally a bad business model, except it can generate extremely high profits for a short period of time. Vonage can't put Verizon out of business as it would eliminate their ability to operate.
Of course having a leech syphoning off the high-value residential customers does nothing but piss Verizon, AT&T and others off. This has been coming for a long time and it isn't over yet. I would guess some telecom company finds some way to put every one of the leeching VOIP services like Vonage and Lingo out of business soon.
So, let's play this game - we'll even name it something like China. You the player spend oh 5 years researching and creatnig some neato' keen scientificly designed product but you don't Patent it because well you just don't roll that way. So you bring this thing to market and it's really kewl but it's kind of expensive because afterall you have all those years of R&D to pay for and a family to feed. 2 months after having released your neato' keen device to market sales sharply drop. Gee, why is that? Oh wait, someone else is playing the game too. Only they are playing it a little different. Seems they were one of your very first customers only instead of using your product they took it apart, duplicated the pieces, and are now making them too - for 1/4 your asking price. They paid nothing for R&D other than the time spent reversing your product and because they have no R&D tail to pay for they aren't deep in the red like you were when you started. No patent so you have no way to fight them - now what? Two months is actually not a crazy estimate either BTW, hell these days you're likely to hand them the plans to manufacture your precious widget anyway. 5mins after the plans hit their desk they are being duped. Worse they might even run the production line double time - you get the products built during the day, they sell the products they built at night. Whoops, how do you fix that exactly? Think this through....
The patent system right now SUX, I'll grant that. However it doesn't suck because the idea is completely bad it sucks because the patent office grants overly broad patents and because we have a judicial branch running amuck making decisions on technology they barely understand. Dumping the patent system while nice in fantasy land isn't going to necessarily mean that it will make things better. China, and other countries, are copying products with little to no R&D like mad and undercutting the real companies making these products. The result is that some of the companies are losing their ass due to R&D costs - what you propose, nuking the patent system, would allow this with no penalty. You sure that's what you want?
Oh and yes people invented things before patents. Then they VERY closely held onto that information for fear that others would benefit from it if it was shared with anyone other than maybe an apprentice. They didn't simply tell every Tom, Dick, and Harry, who wandered by how to do the thing that allowed them to make a living I promise you. There also wasn't this huge global information system that would allow the information to spread like wildfire.
Build it, Drive it, Improve it! Hybridz.org
I'm surprised no one has posted this question yet: how will this legal battle affect other, smaller VoIP providers? I get my VoIP service from my regional ISP, and I'm very happy with it. They deliver a completely unlocked SIP service to me, and my Asterisk server uses it for outside calls. Will the Vonage patent-wielding kill my local VoIP provider too?
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Vonage has until 4/12/07 before the new injunction takes effect. (The new injunction barring new customers which replaced the old injunction that would have shut Vonage down today if it had been implemented.)
I beg to differ:
While the first aluminum cans were noticeably easier to open than steel ones, a separate opener was still required. This was an inconvenience, especially when there was plenty of beer but no church key at the family picnic. It was in such a situation that Ermal Fraze of Dayton, Ohio, found himself in 1959, when he resorted to using a car bumper to open a can. The operation evidently yielded more foam than refreshment, and Fraze is reported to have said that there must be a better way. On a subsequent night, unable to sleep after drinking too much coffee, he went to his basement workshop to tinker with the idea of attaching an opening lever to a can. He was hoping the activity would make him drowsy, but instead "I was up all night and it came to me--just like that. It was all there. I knew how to do it so it would be commercially feasible." Fraze could make such a judgment because he was the owner of the Dayton Reliable Tool and Manufacturing Company, and he had considerable experience with metal forming and scoring, the mastery of which would be essential to developing the pop-top can, for which he obtained the first patent in 1963. "I personally did not invent the easy-open can end," he later asserted. "People have been working on that since 1800. What I did was develop a method of attaching a tab on the can top."
Eventually a ring, which functioned as a lever, was riveted to a pre-scored tear strip. A pull at the ring broke the can's seal and then lifted the attached strip of metal out of the can top along the scored outline. The hole that was left extended a good distance from the edge of the can to (or beyond) the center, and so as the can was tipped for pouring or drinking, air could enter the top of the hole and allow the easy, gurgle-free exit of the contents. The early pop-top or pop-tab worked reasonably well, not only eliminating the need for a church key but also replacing with one smooth motion the action of punching two separate triangular holes. Still, scoring a tear strip in a can top so that it will be easy enough to remove yet strong enough to hold against the internal pressure requires some rather tricky engineering. Some early pull tabs were blown off prematurely by the high pressure of the carbonation rushing out after a consumer's initial cracking of the tear strip, so Fraze and other inventors came up with schemes to benignly direct the first whoosh of escaping gas away from the tab itself. Throughout the mid-1960s numerous patents were awarded for improvements in pull-tab devices. Then a new problem arose: environmental pollution.
By the mid-1970s those tabs that pulled completely off the can top were coming under increasing attack from environmentalists, and with good reason. 1 recall stopping at traffic lights in those days and trying to count up all the pull tabs (by then looking like little curledup tongues on key rings) among the cigarette butts beside the road. I could never finish counting before the light changed. Picnic sites and beaches were disastrously prone to the sharp litter, which was especially difficult to clean up because the small tabs passed easily through the tines of rakes. Animals, fish, and children were swallowing the tabs, and bathers were cutting their feet on them. Some conscientious people would drop the tab into the can after opening it; and some of them required operations when they swallowed the tab with their drink. In short, there was growing concern over the failure of the pull tab to function as well as desired in that regard, and this led to another rash of patent applications for easy-open cans without removable tabs. Form Follows Failure
If you get Gizmo Project and Grand Central, and configure the latter to use the former, you can get unlimited inbound calls for free.
I've been very happy with my Vonage service, and I hope they'll win this one in court eventually. If they don't, I'll reconfigure my Vonage hardware to use another SIP provider (like Gizmo Project): I'll switch back to TPC when heck freezes over.
As a Canadian Vonage user, my interest in this case is going to be how it affects me -- but nobody seems to be talking about what might happen to the Canadian (or UK) subsidiaries should Vonage US go down.
It appears that Vonage Canada (and presumably UK) is a wholly-owned, seperate company, and isn't directly constrained by the patent suit (as Verizon has no Canadian presence or patents). However, it is my understanding that Vonage Canada relies pretty heavily on the Vonage US network for call routing (although it is also my understanding that it has been gaining a bit more independence in the past year).
So what happens if Vonage US goes into receivership? Presumably holdings like Vonage Canada and Vonage UK will go on sale. I suspect Vonage Canada's call quality might suffer if they don't put contingency plans in place now, but that if they can stave off the loss of customers due to the US network folding, it could potentially survive (in which case, the 4 Vonage lines I have in my home, and the Vonage lines family and friends have thanks to my recommendation could keep working). But then again, if Vonage Canada isn't all that profitable (I have no idea if they are or not), they could fold up as well.
For now I'm waiting it out, but if anyone has any better info on what could be expected for the Canadian and UK subsidiaries, I'd certainly be interested in learning more.
Yaz.
1. Verizon wins outright, tells Vonage to stuff it and they go bankrupt. Service ends after a notification period. Bad for Vonage, bad for customers, black-eye for Verizon.
2. The "strangle" continues through the long appeal process. Vonage reaches a point of being non-viable even if they can engineer around the patents. Verizon "buys" them as part of an out-of-court settlement and continues the business (possibly with rate increases or tie-ins with their cell business.
3. Vonage can reengineer around the patents in time to survive, but will struggle due to the judgement costs (infringement) anyway. They eventually are bought out.
I don't think #1 is likely since Verizon wouldn't really gain much. #2 and #3 are more likely. Option 4 being Vonage reengineers quickly and somehow wins the appeal seems a bit remote at this point...
I think I figured out your problem. You were dealing with some company called "Vontage." Try calling "Vonage" and I'm sure you'll have as good an experience as I am continuing to have.
I'm in the hole of the broadband donut.
Of course having a leech syphoning off the high-value residential customers does nothing but piss Verizon, AT&T and others off.
That's funny, as a "high-value residentail customer" I think of Verizon, AT&T and others as government dependent leeches. I'd love to see some real competition in infrastructure and I'm tired of government being the barrier to that. US infrastructure is no longer the world's best, despite great spending by people such as myself.
This will continue into the future as long as government auctions bandwith and telco access to the highest bidders without reciprocal obligations. Liberating bandwith and access or forcing co-operation could fix things. Sucking taxes from monopolies does not.
DMCA, Hollings, Palladium. What might have sounded like paranoia is now common sense.
You are smoking crack.
They've demonstrated that you can do telephony over cheap packet switched networks like the internet for a tiny fraction of the costs of the incumbent telecoms. Not that that was a shocker. Those stupendously greedy assholes at the old school telecom companies have been price gouging so bad they've even intermittently attracted federal regulation. And we know how hard that is to do.
Voip providers don't need the telecoms. As old-line telecom customers switch to Voip, then usage of bridges to the old line telecom network declines to zero. Data is carried according to the (slightly less rigged) internet pricing model. Everyone saves a fuckload of money and the economy grows. End of story.
(P.S. - there's no "maybe" - that's why vonage-to-vonage calls are already free for vonage customers. Vonage users are largely paying - being price gouged, technically - for the use of the telecom bridge, for as long as it lasts. Once that goes, then prices drop even further, to the actual value of carrying a few kilobits a second...)
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I have had Vonage (Canada) for about a year, and up until today it has been pretty darn good. Can't beat the features/price with any other carrier up here.
Now, today of all days, my ATA won't connect... So I have to call support... Oh my. It must be bedlam over there, because after 5 calls, and over 2 hours on my cell phone, I could NOT get through to tech support. I can reach a human every time, but they can never assist me, and queue me up in a never-ending wait....
I guess it's time to make the jump to Packet8 or some other Voip supplier before the whole house of cards comes tumbling down. It may not be Verizon that kills them, but the stampede of their own customers panicing....
Brad