Sprint Nextel sues Vonage over VOIP patents

Posts: 58 · Full Forum Member Joined: Jun 28, 2005 Posts: 58

Regarding the "rumor" of the Sprint local telco spinoff:

http://www2.sprint.com/mr/news_dtl.do?id=6840

I see that Sprint has selected Dan Hesse, former CEO of the now-defunct Terabeam. Nice move, my money says the Sprint spinoff
has a snowball's chance in hell.

Posts: 233 · Posted: Wed Oct 05, 2005 5:07 pm Post subject:

Quote:

I wonder if this is one of the patents
Broadband telecommunications system or maybe System and method for allocating bandwidth for a call

To see all of the patents that sprint nextel has you can search the US Patent office http://patft.uspto.gov/netahtml/search-bool.html

Could be. And one could also discuss whether SCO had a legitimate claim on their Linux suits. But in the end it looked like SCO managed to alienate a lot of potential customers. I seriously doubt Sprint will win any friends here either. And if Vonage has enough money that Sprint thinks it is worth their time, then I still think they had better options than betting with a lawyer on that money. Maybe Sprint has some smart lawyer telling them they should aggressively defend anything that potentially looks similar. If true, that lawyer knows how to keep food on his table.

Then there is that other VoIP company mentioned in the suit. Do they have money? Or were they named to make the Vonage suit look legitimate?

I won't say that Sprint absolutely does not have a valid claim because I honestly don't know. I don't even know how they may have deciphered whatever it is that Vonage is doing. I do know that they must be ok with upsetting some potential customers. Of course, in my case it is too late.

Posts: 1715 · Posted: Thu Oct 06, 2005 10:47 am Post subject:

Out of the traditional Bells, is Sprint the only one without VoIP? Verizon & AT&T have theirs...

Posts: 58 · Full Forum Member Joined: Jun 28, 2005 Posts: 58

Sprint has VoIP. They offer it to commercial accounts rather than to consumers. They actually are training their employees with software from my company.

Posts: 233 · Posted: Thu Oct 06, 2005 3:55 pm Post subject:

Now my curiosity is really boiling. So I went to the Sprint web site again. This time I used the search on their web site to search for "Vonage". From what I found it seems the crew at Sprint has had a morbid interest in Vonage for some time.

I found an FCC document, WC Docket No. 03-211, where I found this quote:

Quote:

The record in the instant proceeding demonstrates that Vonage’s VoIP offering is functionally equivalent from the end user’s perspective to other real-time voice services offered to the public by traditional common carriers. The Commission should accordingly find that Vonage’s DigitalVoice offering is a telecommunications service, subject to USF, access charge, and public safety and security requirements. The Commission should also reject Vonage’s request that it preempt state regulation of VoIP services.

This document was from November 24, 2003. And there was another from October, 2003. Here are some links:
On Sprint web site
On Sprint web site

And then I found a word document at this link that really says it all. I quote it below, but it makes me think they are saying "we aren't ready so we want everyone else to slow down.:

Quote:

Sprint Regulatory Position on VOIP

AT&T and Vonage have each brought VoIP issues before the FCC suggesting that regulation of voice calls should be driven by the technology used to deliver the service, and all telecom services delivered via IP should be exempt from access charges. Sprint disagrees with this position. Sprint believes that real-time voice services, which are offered to the public for a fee and use standard telephone numbers, should be considered to be telecommunications services, and that the appropriate degree of regulation should not depend on the particular technology used to deliver the service. As such, these services should be subject to Universal Service Fund contributions, access charges (if the calls originate or terminate on the public switched network) and 911 and CALEA obligations.

As broader policy matters, Sprint believes that intercarrier compensation, which varies today depending on the type of carrier, type of call (local vs. long distance) and jurisdiction of the call (intrastate vs. interstate) needs to be rationalized so that a uniform system applies to all types of traffic, and the current method of funding federal Universal Service needs to be overhauled as well. Both of these issues take on increased importance in light of the potential impact of VoIP. We will continue to pursue improvements in these policy areas in the states and at the FCC, and have urged the FCC to act quickly on the AT&T petition to begin to provide some clarification on the VoIP issue.

While Sprint feels strongly that inter-carrier compensation needs to be restructured, the rules as they are structured today clearly provide competitive advantages to companies using VoIP. To remain competitive, Sprint is currently using VoIP on a limited basis but will explore expanding the use of VoIP if the current rules remain in place.

The last sentence sums it up. It seems to me that they are admitting "we are behind and we wish the government to help us, but we will try to catch up."

And the list goes on. Rather than me quote it all, you can go search on their site. Why do they make this public on their own web site? The information I find makes it look like they are trying to find every legal way to slow VoIP if it includes regulations, taxes, law suits, etc. I still think they are worried they missed the new boat and their old boat still has the CenTel (their local service) anchor dragging bottom.

Posts: 58 · Full Forum Member Joined: Jun 28, 2005 Posts: 58

Sprint isn't behind in the technology, just behind in marketing it properly. They are a strong Cisco and Nortel technology house. Vonage is kicking their butt all over the country because Sprint customers are fed up with their rotten service and are moving to Vonage in huge numbers. Sprint went after the commercial market, when the big numbers were in the consumers. Big mistake. Most big companies went VoIP on their own, using their already huge bandwidth.

Posts: 71 · Full Forum Member Joined: Mar 09, 2004 Posts: 71

I hope sprint looses, and vonage turns around and sues the pants off them!

Posts: 233 · Posted: Fri Oct 07, 2005 6:16 am Post subject:

Quote:

Sprint isn't behind in the technology, just behind in marketing it properly.

That makes sense. If I think back on a lot of these silly suits and battles a lot of them can be traced back to a marketing misstep. That was where I think AT&T messed up too. They couldn't settle on a market and were having a hard time with their crystal ball. They bought NCR, sold NCR. Got into wireless, got out of wireless. Sold off a lot of manufacturing. Got into cable, got out of cable. And just as they get into VoIP they end up getting bought.

But, Sprint is still messing up. Making approximately 900,000 to 1,000,000 people mad in just one competitor is silly. If they manage to run up the price on the whole VoIP market then 1,000,000 will be a fraction of the people who will be mad if they all know the truth.

Thanks for the insight TommyDale. At least I can sort it in my head better even if I can't rationalize Sprint's law suit. Sprint's next move could tell us a lot. If they are smart they would back off, sell CenTel, and use the profits to move in the right direction.

Posts: 233 · Posted: Mon Oct 10, 2005 8:00 pm Post subject:

Now I am depressed again. Just about everywhere I look it seems everyone believes Sprint is softening up Vonage for a purchase.
Om Malik's Broadband Blog
More on Sprint/Vonage Suit
A Vote for Sprint-Vonage
Maybe this marriage would help somebody on the financial side of things, but ask a lot of the people currently using Sprint local service and see what they think.

Of course it is highly possible that the marriage would work fine. After all, Vonage is using standard equipment (some tweaked like the PAP2), but the secret is their marketing. And after TommyDale's post I am beginning to believe that maybe Sprint's hiccups that I experienced could be isolated to the local service. A lot of companies keep their divisions separated more than they should. Makes for an easy sale.

From a technical standpoint I see a lot of people on this forum talk about tweaking a setting or finding the best combo of equipment. But, for "Average Joe Consumer" Vonage locks the PAP2 and a lot of people can put this thing together in an off-the-shelf solution within 15 to 20 minutes. Just look at Time Warner's commercial with the guy listening to the dial tone make the same sound as his old dial tone. I think Time Warner sees the future now.

Of course, for Vonage to keep customers happy the customer must have a reliable ISP. Vonage has the advantage because they ride on someone else's media. Yes, it can be frustrating when the customer calls and blames Vonage for a broadband outage. But the big broadband companies are already collecting a fee to keep their service up and running so they are going to keep downtime to a minimum no matter who is handling communications. (Hint: Mr. Cable Company will need to drop his price on VoIP eventually.)

At one time I saw AT&T Callvantage as the biggest threat to Vonage other than cable companies selling direct. But, to my surprise, SBC isn't marketing Callvantage heavily.

I see people complain about the lack of anonymous call rejection at Vonage. But, look at the whole package verses price. Vonage has a whole lot more that outweighs anonymous call rejection, especially when considering price. And a couple of entrepreneurs have already provided a Vonage compatible anonymous call rejection solution in a small box that has a lot of flexibility.

So here we have a VoIP company that has forged forward with a unique marketing approach, ease of use, and a little bit of tweak room for those who like tuning up their equipment. This luck reminds me more of the early days of oil wells than the dot com boom.

So will somebody beat Sprint to the punch and make a bid for this "diamond in the rough"? Or will Vonage hang in for the long haul? I guess that depends on the philosophy of Vonage founder Jeff Citron and his investors. But if their investment strategy is on target as their marketing has been, I suspect money will be made. My suggestion to the baby Bells: keep an eye on Sprint. You may want to get your bid in now. The key is timing and if you want to play ball with Sprint. Don't forget Sprint has been brewing this situation for a couple of years. Meanwhile Jeff and company have some serious contemplation facing them.

In the end, if we can keep Sprint from running up the cost of VoIP, we users may become beneficiaries in this transaction. It could turn out that Vonage becomes so attractive the boom not only helps Vonage but feeds the industry as a whole. I had a fuse salesman tell me one time that his competition wasn't the other fuse manufacturers. He said his competition was the manufacturers of circuit breakers.

One last thought. I hope the government doesn't decide to squash the VoIP market to protect the copper market. Because when this tiger gets loose (everyone sees the advantage) the price of copper is going to plummet as we rip down all those unused bundles of cable, even if some are multiplexed.

Posts: 47 · Full Forum Member Joined: Aug 18, 2005 Posts: 47

The moral of the story is to patent your junk.
Vonage didn't patent their technology before they tried to sell it to almost every cable and phone company back in 2000/2001. They just didn't think of it, they were a bunch of kids straight out of DeVry and wherever.

They got ganked. Look at www.vonage.com then go to callvantage, or lingo, or sunrocket. Holy clones, Batman!

If they HAD, there would be only one VoIP company out there. Maybe two due to monopoly laws.