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Article

Title: A Blow in Court Adds to Threats Facing Vonage

Author: Sharma, Amol; Boles, Corey Article Type: Product Analysis
Source: Wall Street Journal, v249 n81 pA1(2) Publication Date: Apr 7, 2007
  ISSN: 0193-2241
  Illustrations: Graphs, Charts
URL of Publication: http://www.wsj.com

Vonage will have to struggle to stay in business after a federal judge said Friday Vonage must stop signing up new customers unless it avoids infringing on patents held by Verizon Communications. The ruling did not shut down service to customers, but a lawyer for Vonage, Roger Warin, said its almost as hurtful and is more like cutting off oxygen than blowing out the brain with a gun. Vonage appealed immediately and was granted a temporary stay by a federal appeals court. Vonages disruptive technology has also been adopted by larger companies in stronger financial positions, including large phone and cable TV companies. Those competitors are offering discounted triple play bundles (phone, Internet, and TV service). Cable providers now make up 60 percent of 10.6 million U.S. households with Internet phone connections, says market researcher In-Stat. Vonage customers now pay some of the same surcharges as those of Verizon and AT&T, and Vonage was also faulted for not assuring customers of reliable 911 service, even though the company has made significant strides to address that issue. Among topics covered are Vonage's background and the benefits of the ruling to Verizon and other established players that view the Internet as a threat.

Special Features: Graphs, Charts

Companies:
Verizon Communications Inc Vonage Holdings Corp

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