Vonage Holdings Corp. (NYSE:VG) got nudged toward its eventual oblivion today when a federal jury ordered the struggling internet phone company to pay $58 million plus monthly royalties to Verizon Communications Inc. (NYSE:VZ) for infringing on three patents.
Verizon also asked for a court order banning Vonage from using the disputed technology, according to Bloomberg News. Such a ruling would effectively drive Vonage out of business because it would leave it only able to handle calls among its customers.
Vonage's stock nosedived on the news. Trading has been halted as investors prepare to watch the company go down the drain.
This case is far from over. Vonage will probably appeal the decision, delaying the axe from falling for a while. But fall it will. As Vonage's obnoxious commercials grew in intensity, so did the competition from much bigger companies including Verizon.
The unlucky investors still holding Vonage's stock may get at least some of their money back if the firm is bought out by a telecommunications company or a private equity player. But don't hold your breath waiting for that to happen.
Still, internet phone service is here to stay even if Vonage may not be.
My wife and I signed up for Comcast Corp. (NASDAQ:CMCSA)'s digital voice earlier this month and so far haven't seen any difference in service quality. Comcast's triple play of services is saving us about $70 a month. There's no way that I would even contemplate going with Vonage.
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Reader Comments (Page 1 of 1)
3-08-2007 @ 5:40PM
tscal3358 said...
The real question for you now is what will happen to your phone service costs at the end of the 12 month Comcast Tripleplay promotion? My brother has done the same thing and I wonder at what cost after the 12 months are up if you continue with Comcast. I have not been able to get any commments from Comcast addressing that possibility. Will the hammer fall (as depicted in Qwest's TV ads)or will Comcast try to keep customers by offering a reasonable price? I wonder.....
3-08-2007 @ 5:40PM
jonathan berr said...
A fair question.
Either Comcast or Verizon or another company is going to have another deal to replace it.
3-08-2007 @ 6:01PM
Mmaeir said...
Whoa! does that mean that all VoIP companies are affected?? If you follow my blog at http://www.flatplanetphone.com/wordpress you will see how we are trying to democratize the telecom world. From the comments we are getting, we are in the right direction. what will this mean?
At the Flat Planet Phone Co. we will enable anyone to start his own phone company for only $199! that is our way to fight Verizon, at&t and all the others who are trying to stifle innovation!
3-08-2007 @ 6:01PM
P A Watson said...
I have been a Vonage user for years. I have never, not even once, had issue with them. The service has been great. You tell me where else you can get what Vonage offers for $29.00? By the way, over the years the price has never gone up. Saying good-by to Vonage opens up the industry to all those others that are charging $40.00 and up (and that's a sign-up promotion.) If Vonage goes, I guess it's back to the old time telephone for me.
3-08-2007 @ 6:38PM
christine filiberto said...
WOW what interesting news since I just wrote a 3 page letter to Vonage which I am sending to every consumer protection agency I can find as well as my congressman. Vonage has the worst customer service I have ever experienced. They have been drafting charges out of my bank account and dragging me through their gridlock of robotic teleprompter reading employees since Nov. 2006. I made the unfortunate mistake of signing up my husbands medical practice phone lines to Vonage. They advertise "Keep your same number" they advertise "satisfaction Guarentee" which all are a pack of lies in my case. I have been charged nearly $500.00 since November and never even had the service connected! They claim our DSL line was preventing the transfer to Vonage. A complete lie. Try to get the same customer service rep...impossible....How about how you have to go through their robotic answers and questions only to be put on hold for long periods of time? I finally wised up and am going to my bank to dispute all their charges from my bank account to try and stop this insanity. This company deserves to go out of business. They are pathetic. Yesterday they told me if I am not happy to call another number and have my service disconnected. I said WHAT SERVICE??? Then I was told there would be a $190.00 disconnect fee as well as a device deactivation fee which they could not tell me how much that was going to be. WOW...talk about a rip off company!!!!!!!!!
3-08-2007 @ 7:27PM
DJ said...
IVE HAD VONAGE FOR A FEW MONTHS NOW. I HAVE NO PROBLEM WITH THEM, I NEEDED TO CALL TO CHANGE MY BILLING INFO TO A DIFFERENT CARD ONCE AND GOT STRAIGHT THROUGH TO A PERSON TO HELP ME WITH THAT. ITS IRONIC THAT MY VONAGE IS HOOKED UP THROUGH MY VERIZON FIOS INTERNET. I LIKE THE SERVICE THE CALL QUALITY IS GOOD. I PAY LESS THAN $30 A MONTH FOR THE SERVICE. I WOULD BE SADDENDED TO SEE IT GO I HOPE SOMETHING CAN BE WORKED OUT.
3-08-2007 @ 9:22PM
lauren said...
I've been with vonage for several months I've never had to wait on hold more than five minutes. that not true what that women said. vonage has it moments but what phone service dosent but for the price i cant complain
3-09-2007 @ 9:34PM
Ron said...
Try Lingo.com/ It's a fantastic VOIP, the customer/tech support is great. I've had it for over 2 years, and never a billing problem or a complaint. Telephone number to speak with someone is located on Contact Us, on the web site. I highly recommend it. I pay less than $23.00 per month, can call all of USA, Canada, plus 21 Western European countries (also PR and that area) as a local call. Also, they are not spending all their money on advertising like Vonage, thus having assets to run a good operation. Based in Canada, but headquarters is Primus Communications, McClain, VA.
3-09-2007 @ 10:33AM
hankster608 said...
Changed from VERIZON a year ago and selected Vonage. Am saving over 100 dollars a month. VERIZON gave me a rough time and COMCAST wouldnt give me a good deal on phone service/compared to Vonage. The big companies are trying to be-little the honest smaller companies like Vonage who are honestly trying to give the working class/lower and middle class people a break in costs. compare/// WALMART trying to give the litttle people a break in costs over bigger companies and getting be-litttled for their efforts. The consumers have to rise-up and stop patronizing these big companies who are draining the pocket-books of the little people and getting rich doing it; and trying to break the backs of the companies who are coming-up trying to revitolize the economy. Thanks for listening,,, ARMY RETIRED SPECIAL FORCES
3-09-2007 @ 8:31PM
GoodtoGo said...
COMCAST Corportation?????... I have had them for years and they can't even keep my cable TV service working... I keep getting calls and mailings for me to switch to Comcast Internet.. and Comcast phone..???? WHY.... they are so lucky that they are a monopoly In this area... a call to them takes at least an hours to get to talk to a live person... they are so lucky that they are an monopoly In this area... If I treated customers this poorly, I would have none... on a scale of 1 to 10 I rate my experience with Comcast as a -9 (minus nine)... yes I'm reaserching the dishes and option to cease doing business with Comcast (SCAMcast) Cable. ASAP!... think twice before dealing with these people... customer service don't exist!
3-09-2007 @ 12:24PM
CoolOne said...
I have all of you guys beat. The best kept secret is http://www.viatalk.com where I have been for the last two years with no problems. I kept my original phone number and have more features than ANY other VOIP service out there, all for $199 PER YEAR ($16.58 per month)including unlimited long distance.
Go there yourself and check it out.