Taking Precautions Against a Vonage Collapse

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Finding a backup VoIP provider will take due diligence by consumers, small businesses.

The best advice for Vonage customers this week is not to panic. After all, the judge in Friday's hearing on the injunction resulting from Verizon's successful patent infringement suit didn't say the VoIP pioneer couldn't keep serving its customers, he just said it couldn't acquire any new ones. And an appeals court quickly put even that ruling on temporary hold. Still, it would be foolish not to plan against the possibility that Vonage might have to stop operating completely. That would be like going for a Sunday drive without a spare tire in the trunk.

Residential users have several alternatives in case they lose Vonage service. For one, they could go with VoIP service from cable providers or even their friendly neighborhood telcos. The problem is, notes In-Stat analyst David Lemelin, that many consumers choose services such as Vonage's specifically because they don't want to depend on large companies they're not necessarily fond of for 100 percent of their communications needs. On the other hand, if they sign up with another independent VoIP provider similar to Vonage, they'll have to keep in mind the possibility that the patent issues involved reach so deep into the industry that they could jeopardize virtually every Internet telephony provider.

Whatever type of provider they choose, they will have a number of issues to deal with that they wouldn't have if they stuck with conventional phone service. The issues vary with the type, size and even location of the operator. Cable VoIP providers, for example, at times tend to act like conventional phone companies. They are solid and reliable, but typically don't emphasize or even offer features such as virtual phone numbers. Located in distant cities or even overseas, such numbers allow friends and relatives in London, for example, to call U.S. subscribers for the cost of a local call.

At least the cable companies are trying to sell their IP telephony service. Conventional phone companies, by contrast, often offer their own VoIP services, but may do little to sell them because they compete with traditional wireline voice offerings.

Transferring to another independent VoIP provider will raise further issues besides the possibility of another shutdown. At the very least, users will have to once again ask some basic questions they had hoped they were done with. For one thing, even though VoIP can work anywhere there is a broadband Internet connection, not all providers have E911 service everywhere their potential customers might live, and they're not supposed to offer service where they don't. They may also not have virtual numbers where their users want them, particularly in Europe. Also, their international calling rates on some routes may be little cheaper than conventional overseas dialing. Vonage users will have to check all such factors before selecting a new operator.

Small businesses using Vonage services, such as its $49.99 per month unlimited calling plan with free two-line phone adapter, have even fewer options. Not being in residential areas will typically prevent them from having access to cable VoIP services, for example. That means the lawsuit could turn into an unexpected opportunity for Skype, which has been making big noises about its services for businesses . That should delight Verizon.

Skype Grows up and Looks for Commitment 

Injunction Against Vonage a Minor Skirmish in the Telco-VoIP Wars

Residential VoIP Buyer's Guide 

Residential Comparison Guide 

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