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Vonage VoIP Forum Digest - June 22, 2006


Vonage VoIP Forum Digest

June 22, 2006

By Daniel Connor

Welcome to today's edition of the Vonage Voip Forum Digest. 

Busy day today with lots of news, so let's get started.

In the news, we'll catch up with Vonage's stock price, a new decision from the Federal Communications Commission and how that might affect your Vonage bill, what Vonage says about their current financial performance and future, as well as a surprising development about Vonage's online advertising that I didn't really expect.  We'll also go over a newly posted Vonage Forum thread about the Vonage VTech phone, and another about bandwidth availability issues and how they may or may not be affected by Vonage service.



In The News

Vonage Stock Rises More Than Five Percent

On Wednesday on the New York Stock Exchange, Vonage stock closed at $8.85 a share, down just seven cents from  Tuesday's closing price of $8.92 a share, but up a much larger amount of 24 cents from the day's low price of $8.61 a share  Total trading volume for Vonage Wednesday was 2,579,300 shares. 

Once again, our Vonage Stock Forum can be reached from this link.

Vonage Will Need To Contribute Revenue Into Universal Service Fund, and Vonage Comments

Yesterday  U.S. Federal Communications Commission approved a new plan for funding phone service subsidies.

The FCC ordered Internet telephone services like Vonage to contribute part of their revenue into the Universal Service Fund, which subsidizes phone service to rural and low-income areas as well as communications services and Internet access for schools, hospitals and libraries.

Under the plan which was unanimously adopted by the FCC commissioners, VoIP providers such as Vonage would have to pay about 7 percent of their revenue into the fund under the current contribution factor.

The rule actually requires Vonage and other Voip providers  to contribute 10.5 percent of their long-distance revenue to the Universal Service Fund if the calls pass through traditional phone networks. The 7 percent figure is that Vonage and others would be assessed Universal Service fees on as much as 64.9 percent of their revenue. So, in other words, the contribution would be based on 10.5 percent of 64.9 percent of revenue- which is around 7 percent. 

The contribution for all carriers is scheduled to drop to 10.5 percent on July 1.

The new rule requires Voip companies, like Vonage Holdings, to pay Universal Service fees on as much as 64.9 percent of their revenue. Internet-phone providers can reduce the rate if they determine through "traffic studies" that less than 64.9 percent of their revenue is based on interstate calls.

The contribution factor is usually adjusted each quarter, based on payments received from providers.

There was no immediate information from Vonage about how much customer bills will go up, or how Vonage might apply this tax to monthly calling plans, if at all. But after the decision was announced, Vonage made a statement.

Vonage Comments on USF Contribution Requirement

After the U.S. FCC decided unanimously to assess Vonage fees that it would have to pay into the Universal Service Fund, which subsidizes phone service to rural and low-income areas as well as communications services and Internet access for schools, hospitals and libraries, Vonage issued a statement largely supporting the decision.

"The new USF tax will result in a net slightly higher customer bill. Vonage is assessing which method of contribution will be most beneficial for its customers," the company said.

"Vonage fully supports its obligations to government programs. Last month the Treasury advised us to cease collecting (Federal Excise Tax), to the benefit of customers, and now we must begin to collect USF tax, balancing the scales," said Vonage CEO Mike Snyder. "Now that Voip customers will be contributing directly to the fund, we hope as a result of this interim rule, VoIP companies will now be able to utilize universal service funds enabling Vonage and the industry as a whole to bring new technologies like ours to rural America."

It is likely that monthly Vonage phone bills will rise, but only slightly, say several experts whose comments I have been reading.

Vonage Spokesperson: We Have A Healthy Business

Business Week just published an online article in which it appears that one analyst that tracks the company is concerned enough that Vonage is not yet profitable that he called the company "toast."

But Vonage told Business Week that they disagree.

Vonage spokeswoman Brooke Schulz told Business Week that "you need to look at customer churn, acquisition costs, and operating losses together to build the business model. My conclusion is we have a healthy business here…We're not toast,” she said. The real question is whether the company can acquire its customers in an efficient manner and thereby narrow its losses, she says.

Vonage was able to comment publicly because they are now over the "quiet period" that U.S. securities laws require of companies that have announced and done an Initial Public Offering.

Vonage Now Second Largest Internet Advertiser (Down From First)

For the first month in longer than I can remember, Vonage was not the Internet's leading advertiser in May.

The research firm Nielsen NetRatings compiles these numbers by tracking most online advertising, comparing the numbers of ads it sees from individual advertisers with the published online rates charged by the sites where the advertising appears, and then comparing the numbers of times ads appear on these sites with their survey results for overall numbers of visits to each of these thousands of sites in a given month.

Now for the results. Vonage finished second in May with an estimated $36,104,800 in Internet ad expenses and a projected 16,482,274,000 impressions. The term impressions refers to the total number of times the ad is served and how many people see it (but don't necessarily click on it. If you are interested, the leading Internet advertiser was GUS Plc with $47,480,900 in estimated Internet ad expenses, and 24,016,517,000 impressions. GUS plc operates several mostly European retail ecommerce sites, but also the Experian credit bureau and their associated online services as well.

On The Vonage Voip Forum

New Vonage Forum Member IsMaR had questions about switching to the Vonage VTech 8100-2 phone. He decided the best way to get these questions answered would be to open up a new Vonage Forum thread on the subject and name it, switching to VTech, need some help.

"Okay so I had Vonage for bout a year, and I needed a new phone, i have a regular router with phone line out thing... After contemplating what phone to get at the store, i decided just to go with VTech IP 8100-2 this way i could connect the main router thing in the basement where my cable line is, and can get handset upstairs too without needing to bring it down stairs to re-charge and such," he writes.

Then IsMaR adds that he went out and bought the phone, but because no manual came with the phone he is confused on how the phone is supposed to work with his Vonage service. And a Google search led IsMaR to our Vonage Forum.

The thread IsMaR wisely decided to open got two quick responses from two of our most knowledgeable Vonage Forum Members.

The first to respond was none other than Steve48, our current Vonage Forum Member of the Week. In any case, the first thing you'll need to do is register the new IP phone with Vonage. This will enable service with it and disable service with your old adapter.

Then navydavy2001 joins in, suggesting that IsMaR check out three articles on the Vonage site related to the subject. The links are in navydavy2001's post.

New Vonage Forum Member baldrn has opened a thread with the title having to do with a subject that comes up from time to time here. The thread is entitled, Vonage using up bandwidth.

"I surf a lot at home, no major downloads, but sometimes I might download a clip or a song or even an album," writes baldrn, whose real first name is Ty. "Is this affected if someone is on the phone, or is the phone conversation affected?"

Vonage Forum Member blakadher, who has been posting wise and helpful advice frequently since he joined the Vonage Forum six months ago tomorrow, takes the reins on this one.

"Downloading is unlikely to affect the phone or the quality of the conversation," writes blakadher. "The reason is that a high quality Vonage connection uses only 90Kbps. You don't mention what kind of broadband connection you have, but if it's cable the downstream bandwidth is typically going to be at least 4mbps. That 90Kbps that Vonage uses doesn't even put a scratch in your 4mbps (or more) downstream bandwidth. 

Then blakadher adds his insight that rather than downloading, "uploading is usually where you will run into trouble and it will be a case where the people you're talking to can't hear you or you cut out a lot."

Want To Write a Vonage Review?

Here on the Vonage Voip Forum, we have a lively review section. Here, readers and Vonage users post their reviews and opinions about Vonage service and equipment. The link for these reviews is: http://www.vonage-forum.com/reviews.html.

Want to write your own review, and let others know what you think about Vonage service and equipment? Sure. Go to our "Write a Review for Vonage VoIP Forum" page at http://www.vonage-forum.com/reviews-new.html. On this page, you'll see the following spaces where you will want to enter the information that will comprise your review.

In the Product Title box, enter the name of the product you are reviewing, such as the type of router you might want to review.

In The Review box, write your actual review. Try to write at least 100 words. Try to use good grammar and spelling, and please stay away from all-CAPS.

In The Your Name box, type in your full name.

In the Your Email box, type in your email address.

Next, you'll notice a Score pull-down menu. Choose a number from 1 to 10, with 10 being the top rating for the Product you are writing about.

In the Related Link box, type the Web site address for the Product you are writing about. This is not mandatory, though.

If you enter a Related Link, you will want to give that link a title. Type the title in to the Link Title Box.

After you complete your information, click Preview to see how your entry reads, and will look when it is posted. If you like what you see, click Yes.

We've Updated Our Voip Speed Test

So happens that both of our threads we highlighted today received answers partially as a result of responding Vonage Forum Members reviewing the results of the Voip speed test the thread-starters posted.

That is another reason I want to call your attention to our upgraded Voip Speed Test.

Instead of the simple upload/download test, this one has all the reporting that is needed to diagnose ISP issues such as Jitter and Packet Loss.

The advanced report screen has been configured with a "Copy to Clip Board" button so you can easily paste the results in the forums.

I would like to thank the following members for giving valuable input during the beta testing: reebok, Steve48, NateHoy, VonageTPA, Trowski and scerruti.

For those of you that are interested in the details behind the results, the following are the tests parameters:

The test is located in Washington DC.

The data.bin file for the speed test upload/download is 10Mb with 8 seconds max time out.

75,000 bytes is used to calculate the number of supported Voip lines.

Other variables:

Voip lines simulated =1
voip bytes per packet =8
voip simulation seconds =10
voip packets per second =75

If you have any questions about this test, feel free to post them in this thread.

As we close out today's Digest, I'd like to remind you once again about some more options you have to receive the Vonage Voip Forum Digest every day. If you go to this page: http://www.vonage-forum.com/syndication.html, you will see a list of RSS Newsreaders from which with one or two clicks, you'll be able to get your Digest delivered directly to your Newsreader each morning. The Newsreaders we've linked to on that page include such reliable and trusted services as Bloglines, Feedster, My Yahoo!, Newsgator and Feedburner. I am open to add others, just contact me with the info of the Newsreader.

That's what's hot about Vonage today.  We'll be back on Friday morning with our next edition of the Vonage VoIP Forum Digest, including our popular In the Blogs feature!!




 
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1Unlimited calling and other services for all residential plans are based on normal residential, personal, non-commercial use. A combination of factors is used to determine abnormal use, including but not limited to: the number of unique numbers called, calls forwarded, minutes used and other factors. Subject to our Reasonable Use Policy and Terms of Service.

2Shipping and activation fees waived with 1-year agreement. An Early Termination Fee (with periodic pro-rated reductions) applies if service is terminated before the end of the first 12 months. Additional restrictions may apply. See Terms of Service for details.

HIGH SPEED INTERNET REQUIRED. †VALID FOR NEW LINES ONLY. RATES EXCLUDE INTERNET SERVICE, SURCHARGES, FEES AND TAXES. DEVICE MAY BE REFURBISHED. If you subscribe to plans with monthly minutes allotments, all call minutes placed from both from your home and registered ExtensionsTM phones will count toward your monthly minutes allotment. ExtensionsTM calls made from mobiles use airtime and may incur surcharges, depending on your mobile plan. Alarms, TTY and other systems may not be compatible. Vonage 911 service operates differently than traditional 911. See www.vonage.com/911 for details.

** Certain call types excluded.

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