Vonage Loses Appeal; Verizon Owed $120 Million

Billosaur writes "Things do not look good for Vonage. Yesterday, they lost their request for reconsideration of their settlement with Verizon. This means Vonage owes Verizon $120 million to end the patent lawsuit filed against them. The costs associated with defending the case have cut into Vonage's bottom line, and despite attempts to cut costs by laying off 10% of their workforce, they may be unable to make a payment against their debt come December. According to the settlement, Vonage will pay $117.5 million to Verizon and another $2.5 million dollars to charity. Vonage's shares have dropped 87% since their IPO, now hovering around $1.50 per share."

Everyone?

[Anonymous Coward]

It didn't hurt Verizon.

I am sure they would disagree that it needs to end.

And they have a much louder voice than you.

When are patent portfolios restraint of trade?

[postbigbang]

Judge Greene's breakup of AT&T into the RBOCs mean we now have less RBOCs, and if they have patents, they can stifle any competition they want. Is this a new way around the Sherman Anti-Trust Act???

All that's left are a handful of tiny regionals, and Verizon, AT&T, and QWest. MCI is dead and gone... and buying up patents (or even 'cleanly' filing them) means that these companies can effectively shutout the competition.

Not good.

competition

[TI-8477]

The reason all of th big telco's are going after vonage iss because its business model is far better than their's. Simply put, they're afraid of competition.

Re:When are patent portfolios restraint of trade?

[Anonymous Coward]

Exactly right. The RBOCs have no intention of giving up their monopolies simply because VOIP was developed. Vonage isn't the one who lost - technology lost. The consumer lost. You lost.

Kick a Verizon representative when you get a chance.

Re:Vonage Stockholders?

[Belial6]

I have heard this argument many times. The problem with it is that the local phone company is not the same company as the ISP with the same name. Take Verizon for example. Verizon ISP and Verizon Telephone are not the same company. Verizon ISP, which is the company that sold the DSL connection, is in no way hurt by Vonage, so no, Vonage is not competing with Verizon ISP.

Now, if we are going to say that Verizon ISP is not profitable on it's own, and requires the high margin POTS lines to subsidize it, then we have a classic anti-trust case where a monopoly is using it's monopoly position to control a different industry.

Re:Always

[postbigbang]

I understand patent protection, and understand misuse.

I also understand monopolies, and the Sherman Anti-trust Act, The 1996 TCA Act, and other legislation.

What I'm alluding to is that if a sufficient number of patent protections amounts to monopolization of an industry-- once a former public trust-- then there's some thing wrong here.

Vonage is a victim, just as many technology companies are victims, of the patent process. Vonage had a chance,but doesn't now. Yesterday on /. was the story of how AT&T might filter video content. The trend is onerous. Muni-WiFi is dead. As PCs become mobiles/cell phones, the telco monopolies dictate business, not technological advances. It's onerous.

Re:Question

[SeaFox]

How is losing jobs to outsourcing worse than losing jobs to patent law suits?

In one scenario, somebody else gets your job, in the other nobody gets your job.

Re:I've Got Their Number

[Doc Ruby]

No, actually it's a SIP provider I'm paying to host some other DIDs that I did either port or just buy (as portable) to put on it. They're running some Avaya equipment, and some Asterisk servers. But it could be my own Asterisk server, if I wanted. That's how LNP is supposed to work: all you're supposed to need is a phone number on a phone, and put in a request to port it to another carrier.

So what? Who cares? What the hell is the difference? Verizon had no problem porting some numbers to my preferred provider, nor did some other telcos, like Sprint, from whom I first got the number. Vonage had a problem.

So what does your buzzword complaint have to do with anything? This is a question merely of whether Vonage will let me port a number, the way other telcos do, the way LNP is supposed to work. If anything, you should throw your buzzwords at Vonage, instead of acting like you're some kind of bigshot. All it does is make you look like you don't understand LNP.

Re:I've Got Their Number

[lzed]

My point is that you would be porting the number from the donor switch to another provider's class 5 switch not to your personal SIP server. Weather you are connected to your carrier via SIP, H323 or ISDN is irrelevant. This issue is between your current carrier and the previous carrier who has the number ported in. In that respect not all carriers are created equal. I could start up a phone company tomorrow and get a block of numbers from an ILEC to sell telephone service. My agreement with the ILEC may be setup that I will not ask them to port these numbers out and retain the large block contiguous. This makes life easier for the ILEC and cheaper for me to rent them. That is a large difference from a carrier who is a CLEC/ILEC participating in LNP and 911 routing directly. Now if this number was ported into a carrier, as you stated in a follow up, it should certainly be able to be ported back out. However, this depends on if a provider has the agreements setup with the people who are actually porting in the number, which may or may not be the same people who are selling you the end customer service, and the new carrier is within the bounds of LNP requirements including existing in the same rate center and so on. The core point I was trying to make is that you cannot port a number to an Asterisk box or any other PBX for that matter. However, you can port it to a carrier who provides you a SIP subscriber termination or SIP trunk or H323 trunk or ISDN trunk which may go to an Asterisk box or personal PBX. Also bringing up mobile phones is irrelevant as those blocks are handled by mobile number portability and do not apply here.