Fighting for Higher Phone Bills


Lower phone bills? We're all for it. Well, almost all of us are for it. The folks at Verizon aren't too keen on it (neither are the folks at Qwest or AT&T for that matter). But the telecom world is changing, and lawsuits won't hold it back. Although they could result in much higher bills for you.

Struggling to come up with some way to stem the voice-over-the-Internet tide, Verizon has been suing Vonage for allegedly infringing on its patents, and Verizon won an initial judgement in March focusing on three extremely broad patents involving voice mail and how calls can be transferred over a public packet switched network (in other words, over the Internet to the plain old telephone lines). One point about the case, which is now under appeal until June, is that Verizon's patents appear to be too broad, potentially undermining the whole transition to voice over IP (VoIP) that is underway. 

Another point is that if Verizon prevails in the Vonage case, Verizon could initiate threats against other VoIP providers. It might mean that other firms would pay inflated licensing fees just to stave off litigation. And it would mean…you guessed it…higher phone bills for you and me. Witness the fact that Verizon's own VoIP service is substantially more expense than Vonage, even though Verizon owes many of the physical phone lines. (All Vonage owns are a lot of computer servers.)

As a side note, it's interesting to point out that the issue of "Net neutrality"–in other words leaving the basic Internet protocol technology and access to it the way it is–wasn't an issue until companies like AT&T and Qwest floated the idea that they might start charging Web sites for better access to the Internet. In other words, they would blockade the lines on which Internet traffic travels and thus wipe out small, online businesses while delivering a major blow to Google's business plans. (Not only would Google have to pay for access, but Google also has a VoIP play of its own called Google Talk.)

All of this is a way of trying to squeeze revenue out of what is a dying telecom business model. The days of charging for minutes or long distance calls is already over. The old teleco's just don't realize it yet.

For more on the changing telecom business, see my article on past mergers in U.S. News & World Report.


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About jquain

Technology reporter, writer, and television correspondent, JQ has been covering the computer, communications, and consumer electronics industries for more than 25 years.A contributor to The New York Times, Popular Mechanics, PC Magazine, U.S. News & World Report and many other publications, JQ appears on CBS News television program Up to the Minute and on Fox Business.
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