Vonage Claims Price 'Blocking' Of VoIP

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Vonage Claims Price 'Blocking' Of VoIP

August 22, 2005

By Paul Kapustka

Vonage Holdings, the poster child in the debate about how open Internet services need to be, claimed Monday that an unnamed service provider was forcing its broadband customers to pay a premium to use Vonage’s Voice over IP services.

While it wasn’t a case of outright “blocking” of VoIP like the company has previously experienced, Vonage CEO Jeffrey Citron used the example of the extra-fee-for-VoIP incident as part of his argument in favor of a “broadband bill of rights,” that would put into law the type of service a user of broadband services could expect.

“Those who say there’s not a network neutrality problem need to take their head out of the sand,” said Citron, speaking on a panel at the Progress & Freedom Foundation’s Aspen Summit conference here. While the FCC was able to bring judgement against a firm that previously tried to block Vonage services, Citron said that right now “there is no law that prohibits [blocking], so you can’t adjucate against it.”

While Citron hedged on naming the offending service provider, Brooke Schulz, Vonage’s vice president of communications, said the incidents have been occuring with customers who get broadband from a cable TV company. The provider, Schulz said, detects that its customers are using Vonage, and then moves its customers to a higher-cost broadband service (one with a static IP address), claiming it needs to do so to be compliant with federal law-enforcement regulations. According to Schulz, Vonage’s services do not require such technical enhancements.

The question of whether or not Congress or the FCC needs to write laws or regulations specifically deciding the parameters of network neutrality was at the center of Monday’s panel discussion, which also included executives from Verizon, SBC and the cable industry. While Citron was clearly in favor of some law providing a basic level of service rights, the large-company providers all advised caution against setting such regulations in hard law, only to have them quickly obsoleted by technology’s advancements.

“I think we’re all in agreement on the [neutrality] principles,” said Forrest Miller, group president at SBC. “But should we cut them into stone? I’m not sure.” Miller said that laws about net neutrality arguments -- which call for free access to any legal information or applications on the Internet, among other ideas -- could be used to force SBC and other facility-based providers to become the bankrollers for infrastructure that competitors could use for free.

“How can I justify a $4 billion investment in [Project] Lightspeed if it’s a commons?” Miller asked. “If Jeff [Citron] wants a better part of the pipe, he’s welcome to pay for it.”

Kyle McSlarrow, president and CEO of the National Cable & Telecommunciations Association, said customers wouldn’t stand for content-blocking actions, and as such could help the market regulate itself. “I’m just very leery of anything that gets into the space where the rules of the road could be used as leverage by competitors,” he said.

Peter Davidson, Verizon’s senior vice president for government relations, said “Verizon supports the [neutrality] principles,” but said the company was opposed to “anticipatory regulations” and would instead prefer actions or regulations that would address problems after they happened, like in the Madison River case. “With Madison River, the system seemed to work pretty quickly,” Davidson said.

But Citron noted that recent FCC decisions to deregulate DSL gives regulators fewer options to move against potential offenders. Without laws in place, Citron asked, “who would be able to step in before massive damage is done?”