Sunrocket - Verizon vs Vonage

Last week when I read the press reports on the Verizon vs Vonage patent case, I was perplexed by lack of detail of the patents involved in the case. During the Blackberry case there seem to be plenty of detail analysis available. Clint Ricker had the same thought and spent the time to research the matter. Here is the link to his findings and analysis. This case seems to have many of the attributes of the Blackberry case which in my mind should never have gotten as far as it did and just illustrates how broken our patent system is. Unfortunately Congress has other pressing issues to deal with it and I am afraid this issue will not be dealt with anytime soon. Left with this system, companies will continue to use questionable patents in defensive moves against competitors.

You could argue that Vonage is not really a competitor of Verizon's. With only 2.2 million subscribers, they dwarf Verizon's customer base. Verizon's real competitor is Comcast and the other cable companies. With their VOIP phone service Comcast is poaching customers from Verizon. Given the reliability ads Verizon is showing in the Washington, DC area, they are concerned with defection rate. Vonage has been since 2002, yet this lawsuit was only brought in the last year. Verizon chose to attack the middle player in the field which does not have the deep pockets of a Comcast to fight this kind of litigation. The result shows.

The problem for consumers is that the ruling affects us. With VOIP services from Vonage, Sunrocket and others, we have been able to save considerable amounts of money and have started to break the strangle hold local phone companies have had.  The technology is maturing and from my own experience with Sunrocket, I can vouch that the service has gotten better and better. Although the call quality still does not equal the Plain Old Telephone System (POTS), it works as well as a cell phone service. Should the ruling stand, it could have a detrimental impact on the nascent industry and in the end kill competitiveness for local dial tone service.

The major patent in question describes how a call and its associated billing information get passed from a VOIP (or in a broader sense a packet based system) network to the POTS network. The irony is that all of the traditional phone companies are moving their POTS networks towards some form of VOIP or packet switched system making this patent obsolete. As I have said before, judges and lawmakers are not technologists. This works to the advantage of large technology companies like Verizon who put their business agenda first. Unfortunately as a stockholder I agree, but as a technologist and consumer I disagree. We need a balance and there does not seem to be an easy fix.  I hope that as the Vonage case works its way through the court system some balance is found, otherwise I fear we will end up with the local phone monopoly VOIP gave us a glimmer to get away from. Maybe Comcast and other cable companies should donate to a Vonage lawsuit fund...

One last note, as Verizon is deploying FIOS they are urging people to switch their local service from copper to FIOS. At first I thought that this meant VOIP but I was told by Verizon marketing folks that it is not. They could not tell me what technology they were using but I am assuming it is some sort of packet based system tied into their POTS network.