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Vonage Struggles Stir up Interest in Cable Phone Services

May 14, 2007 - While options in home phone service providers have expanded for consumers, there are new concerns about the future of one major technology, VoIP. Vonage, the leading independent provider of VoIP, or Voice-over Internet Protocol, is in a tight legal battle with another service provider, Verizon Communications. Claiming that Vonage has committed patent infringement, Verizon won a recent lawsuit with the VoIP provider.

After a U.S. Court of Appeals turned down Vonage's request for a new trial against Verizon, many customers are left waiting to find out the fate of one of the most popular VoIP service providers.

Although still in the appeal process, the case could have negative consequences for Vonage's market. Vonage has been ordered to pay up to $58 million in damages to Verizon, along with a 5.5% royalty fee for all sales moving forward.

The Vonage patent case has the potential to dramatically affect the VoIP market in the near future. Consumers who looking for phone service may need to pay considerable attention to the longevity outlook of VoIP providers when making their selection to ensure reliability and avoid potential service disruptions.

Meanwhile, customers are turning to similar alternative phone services that are not implicated in the patent infringement suit, including cable phone service providers such as Time Warner and Comcast Digital Voice.

Comcast, the largest cable provider in the U.S., recently announced that it has added 571,000 new digital voice subscribers in the first quarter of 2007 and now has 2.4 million subscribers to its digital phone service. In comparison, Vonage has announced that it has added just 166,000 new subscribers - down 50% from last year at this time.

Unlike Vonage, which uses public Internet lines to connect calls, Comcast and other Cable Internet phone service providers rely on secure networks - offering clients high-quality reception. As the Verizon and Vonage struggle continues, consumers will be keeping a close eye on offerings from top cable phone service providers.

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