Living in the Third World of Telecom

Rich Tehrani, has written a terrific commentary on the folly of a Verizon (old-line re-integration of the Baby Bells) suit against Vonage (innovative VoIP alternative).


If you haven’t heard, a court decided Vonage needs to pay Verizon $58 million in past damages for patent infringement in the following areas:

* Technology used to bridge Internet calls to the traditional phone systems
* Features such as call-waiting and voice-mail
* Wireless Internet phone calls

[T]he question worth posing however is how is the consumer benefiting from this lawsuit?

My concern is with the government and the various agencies who are supposed to be protecting me, my family and friends from monopolistic practices such as this.

When I learn about large companies using the legal and regulatory systems, to flush their competitors down the toilet I have to stop and remember what country I am living in.

I am a US citizen. I was born in the US and I am proud of it. I want consumers to have the best of everything. Lower prices, better quality – the best of everything.

VoIP has afforded consumers many benefits. FCC Chairman Michael Powell realized this and used Vonage as a poster child for competition that was pro consumer.

Unfortunately the massive amount of telco consolidation leaves a few large service providers with war chests full of cash and patents they will use to wipe out any and all competition in the market.

The system is so broken it is tough to imagine it can be called a system. How could the FCC feel good about this sort of decision? How could it ever be argued that a huge patent portfolio wielded like nuclear weapons can benefit consumers?

Merger after merger gets approved and no one puts an end to it.

If you had to design a communications infrastructure, the U.S. model is upside down and ass-backwards. Even the Iraqis resisted our cell-phone system.

1. I checked yesterday to see if DSL was available in my neck of the woods. It isn’t, and we have a single choice, Comcast cable, which provides internet connectivity for $57.00 a month. I feel lucky about this, there are still many pockets in surrounding towns which have nothing more than dial-up internet access. Several of these towns have agreed to look into providing municipal fiber networks.

2. In Germany last summer, I was able to buy an unlocked Nokia cell phone and choose from a half-dozen providers of cell phone service. Each of these had a confusing array of plans to be sure, many of them weren’t directly comparable, but even during the course of a three-week stay I switched providers once, and lowered my per-minute charges back to the states, and within Europe by almost 90%. So there is indeed some competition. The hardware isn’t “locked” to a single provider. Imagine if you bought a Ford Explorer, and you were only able to drive it on Ford’s roads, and if you wanted to tranfer passengers to Chevy’s roads, you’d have to pay a premium. Europe has a single mobile standard, GSM. We have three competing technical standards, which are not directly interoperable.

Read the full commentary here.

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