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Vonage Vonage’s $10-Million 911 Plan
Vonage will spend cash to work with Verizon
Vonage’s $10-Million 911 Plan
Vonage will spend cash to work with Verizon and other operators to offer emergency services.
May 4, 2005
Vonage will spend $10 million to start providing 911-style services for its customers, partly by using Verizon’s infrastructure to connect callers with emergency dispatchers, the Voip provider announced Wednesday.
The investment is Vonage’s first substantial attempt to close the company’s emergency calling gap. The cash is a relatively low price to address a shortcoming that has become a publicity nightmare for the company, which has spent tens of millions of dollars to market Voip service.
Vonage calls the investment a major undertaking, describing the plan as “the first domino to fall” in a plan to offer emergency services nationwide. Vonage and Verizon will implement the system over the next six months.
For now, the Verizon contract includes emergency service access in Verizon’s footprint. A Vonage call will be routed over the Verizon network to connect to the Public Safety Answering Point, or PSAP. The 911 operator is then able to access a database of the caller’s personal information due to a unique key encoded in the call.
The $10 million includes plans with three other regional bell operating companies, or RBOCs, but covers only the service and operational costs. Vonage has been criticized for not figuring out ways to work with the network owners to collaborate on emergency services.
Because Vonage, along with the majority of startup Voip providers, doesn’t own the network over which it runs services, companies like Verizon want to charge when companies piggyback onto their networks.
But $10 million is a relatively easy figure for the company to swallow. Vonage CEO Jeffrey Citron has said that the company spends between $150 to $200 in marketing costs per customer. With over 600,000 customers, that’s up to $120 million in branding to secure its subscribers.
Now that Verizon has decided on an appropriate price point to loan Voip companies network use, the other carriers might follow suit. Vonage says the company is in talks with SBC over a similar plan.
Vonage’s Emergency Call
If Vonage can secure nationwide emergency service coverage, the company could cover its own Achilles’ heel.
The company was recently sued by the State of Texas after a teenager was unable to reach 911 through the Vonage service in an emergency situation. A Vonage spokesperson said the Verizon contract is unrelated to the Texas suit.
Texas Attorney General Greg Abbott stated that Vonage should be clearer about the fact that its 911 access can be unreliable. Vonage’s web site clearly states that the service does not support traditional 911 or E-911 access to emergency services.
Voip providers are offering price points as low as $25 per month in an attempt to undercut standard telephone service. Meanwhile, traditional phone companies are all cautiously moving into Voip and have more cash to help create quality services, including access to emergency services.
The traditional telecoms will battle the Voip upstarts for parts of the $82-billion global industry, according to Insight Research.
As the Voip industry grows, clear regulation determining how Voip providers will work with the entrenched network owners becomes increasingly important. The Federal Communications Commission probably won’t rule until next year on whether Voip providers are information services or telecommunications services.
http://www.redherring.com/Article.aspx?a=11984&hed=Vonage%E2%80%99s+%2410-Million+911+Plan
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LuisPR posted "Vonage’s $10-Million 911 Plan
Vonage will spend cash to work with Verizon" on 05/04/2005 |
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