Vonage

From Wikipedia, the free encyclopedia

Vonage Holdings Corp.
Type	Public (NYSE: VG)
Founded	January 2001 in Seattle, WA
Headquarters	Holmdel, NJ, USA
Key people	Jeffrey A. Citron; Chairman, Chief Strategy Officer and Co-Founder Michael Snyder; CEO John S.Rego; CFO
Industry	Communications services
Products	Voice over IP
Revenue	$269.196 million USD(2005)
Net income	$261.939 million USD(2005)
Employees	1,416 (2005)
Website	www.vonage.com

Vonage (NYSE: VG) (pronounced [vˈɑnɪdʒ]) is a publicly-held commercial voice over IP (VoIP) network and SIP company that provides telephone service via a broadband connection (the company's name is a play on their motto "Voice-Over-Net-AGE").

Vonage promotes itself as "Vonage the Broadband Phone Company®"^[1] in the U.S. and as "Leading the Internet Phone Revolution." Vonage currently holds the most subscribers, and is currently operating on 2.2 million subscriber lines^[2] having completed well over 5 billion calls.^{[citation needed]} Vonage has led the Voice over Broadband (VoBB), or Broadband Phone industry through its aggressive consumer marketing in the United States, Canada, UK and other countries globally.

In order to use the service, customers must purchase or use a branded "VoIP router" or a phone adapter that connects to their main router or broadband modem. In addition, an upload speed of 30–90 kbit/s as well as a reliable/QoS optimized connection is necessary to make calls without substantial lag or jitter.

Vonage was originally based in Edison, New Jersey but is now located in Holmdel, New Jersey, in a building previously occupied by Prudential.^[3] Vonage offers services to subscribers throughout the United States. The company expanded into Canada in April 2004 and into the United Kingdom in January 2005.

Contents 1 Initial Public Offering 2 Telephone number availability 3 Emergency call issue 4 Verizon lawsuit 5 Commercials 6 Service Cancellation 7 Fax, alarm and TiVo/DSS compatibility 8 See also 9 References 10 External links

[edit] Initial Public Offering

Vonage went public on May 24, 2006 at a price of $17 per share. The closing price on 25 March 2007 was $3.00.^[4]

Prior to the IPO, Vonage solicited its customers^[5] via automated phone call announcements and emails with an offer to buy shares of the IPO. The price fell $2.15, or 12.7 percent, to close at $14.85 on the New York Stock Exchange: the worst trading day for any IPO in 2006 up to that point. The IPO raised $531 million for the company. Vonage's post-IPO handling of individual pre-IPO investors resulted in a class-action lawsuit^[6](pending March 2007), earning the Vonage IPO a Business 2.0 Magazine award as 14th of 101 Dumbest Moments in Business for 2006.^[7]

[edit] Telephone number availability

Subscribers are permitted to choose any number in the country of the service they subscribe to for their primary line. Whether it be Vonage US, Canada or UK, subscribers may choose from any area code regardless of their actual residence. Subscribers also have the option of obtaining additional "virtual numbers" for a monthly fee. For example, a subscriber in Florida may choose a number with Manhattan area code 646, allowing callers from New York to be billed only for a local call. In addition, Vonage also offers 'virtual numbers' in Mexico, Canada and throughout Europe for any and all customers to choose from. This is especially beneficial to businesses with an international client base. While Vonage supports porting a telephone number in the US via the FCC's Local Number Portability (LNP), Vonage does not offer phone numbers in every area code in the United States.

Although only residents of the US, Canada, and the UK may subscribe to Vonage (paying with a credit card from their respective nation), the routers with phone ports can be plugged into the internet anywhere in the world. For instance, a student studying abroad in Brazil plugs the router and phone into a cable internet service in the apartment or into an internet café that accepts notebook computers (LAN plug-ins), and the service works with the original local phone number and pricing. The student thus receives calls from and makes calls to the home country for no extra fee. International pricing is often so low that it can be cheaper than calling direct in the same country. For example, the Vonage price to Rio de Janeiro is USD$0.06/min (2005), but calling from a cell phone or pay phone in Brazil costs about USD$0.20/min. Vonage also offers a USB phone adapter that connects a telephone to the USB port of a computer that has internet service, giving it a dial tone and a normal interface to the worldwide telephone network.

[edit] Emergency call issue

A problem with any VoIP provider is that, since the physical location of a caller may not correspond to his or her listed phone number, traditional emergency telephone number service, such as 9-1-1 and e911 in North America, is not available. Vonage emergency phone service requires subscribers to register their address with the company and is not operative in case of an Internet connection disruption or power failure (unless a UPS is used to power the Vonage telephone adapter, telephone base unit, and modem). Customers are responsible for maintaining their 911 location information at all times.

In the event that a customer dials 911 prior to the 911 verification becoming complete, the call will usually be routed to a national 911 call center where a customer must supply basic information (name, location, nature of the emergency, etc.), after which the call will be transferred to a local public service answering point, like a local Police Department.

[edit] Verizon lawsuit

This article documents a current event. Information may change rapidly as the event progresses.

On June 19, 2006, Vonage acknowledged that Verizon filed a lawsuit charging that Vonage infringed on seven of its patents related to its VoIP service; the patents describe technology for completing phone calls between VoIP users and people using phones on the traditional public switched network, authenticating VoIP callers, validating VoIP callers' accounts, fraud protection, providing enhanced features, using Wi-Fi handsets with VoIP services and monitoring VoIP caller usage. Verizon is using this technology in its own VoIP service called VoiceWing.

In a statement, Vonage said "its services have been developed with its own proprietary technology and technology licensed from third parties." The company also said it would "vigorously defend (against) the lawsuit." Vonage said it hadn't been previously notified by Verizon that the company thought it was infringing on its patents.^[8]

On 8 March 2007 a jury found Vonage guilty of infringing three patents held by Verizon, and not guilty of infringing two other patents. The jury ordered Vonage to pay fifty-eight million dollars, and a royalty rate of 5.5% of every sale to a Vonage customer, back to Verizon. Vonage said it would appeal the jury verdict.

The three infringed patents cover: (1) Internet to phone-system connection technology, (2) phone features such as voice-mail and call-waiting, and (3) wireless to Internet phone calls.

The patents in question:

US patent 6430275	US patent 6137869	US patent 6104711	US patent 6282574
US patent 6298062	US patent 6128304	US patent 6359880

On April 3, 2007, Vonage and VOIP, Inc. reached an agreement to allow Vonage to use VOIP, Inc's sector of Internet to continue uninterrupted service, and addresses two of three Verizon patent infringements. The appeal ruling concerning an injunction prohibiting Vonage from using Verizon technology is still pending.

On April 6, 2007, a judge issued an injunction that would bar Vonage from signing up new customers, but did not grant the 120-day stay Vonage requested.^[9]. This injunction is delayed until April 12, to allow Vonage time to submit an appeal.

Later in the day on April 6, 2007, a federal appeals court granted Vonage a temporary stay of the earlier lower court order. ^[10]

[edit] Commercials

Vonage is well known for the distinctive music in its commercials. The song title is "Woo Hoo" — by the band The 5.6.7.8's.

[edit] Service Cancellation

Vonage requires customers to cancel service by calling a toll free number, as service cancellation is not available on-line. Customer descriptions of the cancellation process frequently involve hold times of approximately ten minutes, depending on call volume. Difficulties faced by customers when attempting to cancel Vonage have been detailed in blogs^[11][12][13] as well as a May 2006 Wall Street Journal article^[14] which related one customer's experience with a Vonage representative who refused to cancel an account unless a repair attempt was allowed by the customer.

Despite marketing their service as having no contracts or long term commitments, Vonage charges customers a fee for cancellation within the two years of service, changed from one year February 1st, 2007. This fee is noted in the provider's Terms of Service when a customer signs up or attempts to access their Web Account. The fee is $39.99 per physical voice line which is disconnected. This fee does not apply to dedicated fax lines, virtual telephone numbers, or the computer-based "SoftPhone" lines. A "Rebate Recovery" fee is also assessed if the account is canceled after the 30 day money back guarantee, but before 180 days of service. This fee is the "instant rebate" which is offered on the web site when signing up and is different for each device. This fee, if applied, protects the company from having bogus accounts signed up and canceled shortly thereafter for free or discounted routers that can then be sold for profit.

As of March 2007, FCC employees say that Local Number Portability rules do not apply to VoIP service providers such as Vonage. Vonage claims that subscriber numbers may be transferred to other companies, however, their cumbersome procedures seem designed to routinely delay or deny number transfers. Vonage says that LNP transfers are handled by Focal Communications. However, Focal was acquired^[15] by Broadwing Communications which itself was acquired^[16] by Level3 Communications, with unknown impact^{[citation needed]} on LNP transfers. Customers must cancel their service and give up their local telephone numbers to leave Vonage, according to section 2.11 of the latest Vonage Terms of Service. Many customers are extremely unhappy about the loss of their telephone numbers.

Vonage does not play a direct role in the port-out process, but customers can bring their number with them to another carrier of their choice. Same as when they ported the number into Vonage, customers must contact the carrier they want to bring the number to and authorize the transfer to take place. The carrier then communicates with a Service Bureau, which then acts as the intermediary to verify information about the account (name, address, features on the line, etc.), and if it matches, the Bureau reassigns the possession of the number to the new carrier. Since this is done at the customer's discretion, Vonage does not assist in the port out process, but they cannot restrict the number from being transferred. If the number is declined for transfer, this is done by the Service Bureau, usually because of a name or address mismatch.

[edit] Fax, alarm and TiVo/DSS compatibility

There have been widespread reports of difficulty in operating Fax machines on Vonage lines, either dedicated Fax lines, or regular Vonage lines.^[17] Difficulties have also been reported with residential alarm systems and TiVo.

When using a fax machine, it is suggested that users connect their fax directly into the VoIP adapter, regardless of the provider. This ensures the least amount of variables in a specific network setup. In addition, users should ensure that an "Error Correction Mode" or "ECM Mode" is disabled on their fax machines as this compounds problems and distortion regarding the compression, decompression, and transmission of data communications through a VoIP provider.

It is suggested to contact your local home alarm system operator to determine whether or not your existing home alarm solution is compatible with any VoIP provider.

TiVo's Series 1 units contain only telephone ports to connect to a wall jack. Series 2 and Series 3 hardware contains an ethernet jack, and optionally supports USB-based WiFi adapters, which typically do work properly with VoIP providers. At one point, the initial connection made by the TiVo unit required the use of a regular telephone landline prior to use with a broadband connection, but this limitation was removed in 2005 with TiVo version 7.2^[18].

[edit] See also

• VoIP
• List of commercial voice over IP network providers
• Telephone

[edit] References

[edit] External links

• Official Site
• Official Canadian Site
• Official UK Site
• Vonage 9-1-1 dialing
• Vonage Forum — An Independent Support Site
• Commentary on the Vonage (VG) IPO
• Sky News Technofile Interview Kerry Ritz (Vonage) & Colin Duffy (Voipfone)