Verizon targets Fixed VoIP Services

Jeff Pulver gives us his thoughts on Verizon’s continued patent assault on VoIP providers.

This case against Cox is significant because rather than seeking the same win it got from Vonage from other similarly situated companies, Verizon is now seeking to expand the breadth of its winning patent portfolio to fixed VoIP. To the extent that Verizon wins here, this could have broad implications for other fixed services using DOCSIS (as Cox and the rest of the cable industry generally use), presumably other fixed VoIP that doesn’t use DOCSIS, and depending on which if any patents are upheld – to VoIP billing systems, routing systems, network management, and other technologies. So while this is the first major suit against a fixed VoIP services, my quick read of the patents suggests that only in a few cases (like the 930 patent) are the patents limited to fixed functionality. Among analysts, there is still speculation as to why Verizon chose to go after Cox cable instead of a cable company like Comcast who presumably uses the same technology, shares a greater competition footprint, and has a larger number of customers.

Jeff’s post contains links to the suit and each disputed patent.

This activity continues to stifle adoption and investment in VoIP services in the US – with the net effect that only the legacy fixed line carriers (with their patent arsenals) are able to effectively able to offer these services. That being said – they have little or no profit motive in innovating voice communications – after all their revenue is generated from fixed PSTN service.

One of the key differences as TeleGeography points out is that in Europe, incumbent service providers have had to compete against VoIP providers and now themselves account for 26% of VoIP subscribers, while in the US incumbents have remained largely on the sidelines in terms of VoIP.

This is – in my opinion – another attempt to shield a business model using legislation. Verizon is not trying to protect their VoIP offering (business model) by enforcing these patents… they are protecting their existing fixed line business model.

Instead of embracing innovation and using their patents to develop superior offerings – and winning in the marketplace – they are using their patents as blunt instruments to blunt the effect of innovation.

The bad news is that Verizon can not – long term – win this battle. All they will do is force the innovation to locales outside the influence of the US patent system. Verizon is doing VoIP providers in Europe and Asia a huge favor and the US consumer a huge disservice.

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