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Despite marketing their service as having no contracts or long term commitments, Vonage charges customers a fee for cancellation within the two years of service, changed from one year February 1st, 2007. This fee is noted in the provider's Terms of Service when a customer signs up or attempts to access their Web Account. The fee is $39.99 per physical voice line which is disconnected. This fee does not apply to dedicated fax lines, virtual telephone numbers, or the computer-based "SoftPhone" lines. A "Rebate Recovery" fee is also assessed if the account is canceled after the 30 day money back guarantee, but before 180 days of service. This fee is the "instant rebate" which is offered on the web site when signing up and is different for each device. This fee, if applied, protects the company from having bogus accounts signed up and canceled shortly thereafter for free or discounted routers that can then be sold for profit. It is the policy of Vonage to bill anyone who is discontinuing service-for any reason-even if you are unhappy with the quality of their phone service, you will still be billed $39.99.{{Fact|date=May 2007}}
Despite marketing their service as having no contracts or long term commitments, Vonage charges customers a fee for cancellation within the two years of service, changed from one year February 1st, 2007. This fee is noted in the provider's Terms of Service when a customer signs up or attempts to access their Web Account. The fee is $39.99 per physical voice line which is disconnected. This fee does not apply to dedicated fax lines, virtual telephone numbers, or the computer-based "SoftPhone" lines. A "Rebate Recovery" fee is also assessed if the account is canceled after the 30 day money back guarantee, but before 180 days of service. This fee is the "instant rebate" which is offered on the web site when signing up and is different for each device. This fee, if applied, protects the company from having bogus accounts signed up and canceled shortly thereafter for free or discounted routers that can then be sold for profit. It is the policy of Vonage to bill anyone who is discontinuing service-for any reason-even if you are unhappy with the quality of their phone service, you will still be billed $39.99.{{Fact|date=May 2007}}


As of March 2007, FCC employees say that Local Number Portability rules do not apply to VoIP service providers such as Vonage. Vonage claims that subscriber numbers may be transferred to other companies, however, their cumbersome procedures seem designed to routinely delay or deny number transfers. Vonage says that LNP transfers are handled by Focal Communications. However, Focal was acquired<ref>[http://www.broadwing.com/focalacquisition.html Corvis Corporation Completes Focal Acquisition] Broadwing Press Release, September 2, 2004</ref> by [https://www.broadwing.net/common/focal.jsp Broadwing Communications] which itself was acquired<ref>[http://www.level3.com/newsroom/pressreleases/2007/20070103.html Level3 Completes Acquisition of Broadwing] Level3 press release Jan 3, 2007.</ref> by [http://www.level3.com/ Level3 Communications], with unknown impact{{Fact|date=March 2007}} on LNP transfers. Customers must cancel their service and give up their local telephone numbers to leave Vonage, according to section 2.11 of the latest [http://www.vonage.com/features_terms_service.php?lid=footer_terms Vonage Terms of Service]. Many customers are extremely unhappy about the loss of their telephone numbers.
As of March 2007, FCC employees say that Local Number Portability rules do not apply to VoIP service providers such as Vonage. Vonage claims that subscriber numbers may be transferred to other companies, however, their cumbersome procedures seem designed to routinely delay or deny number transfers. Vonage says that LNP transfers are handled by Focal Communications. However, Focal was acquired<ref>[http://www.broadwing.com/focalacquisition.html Corvis Corporation Completes Focal Acquisition] Broadwing Press Release, September 2, 2004</ref> by [https://www.broadwing.net/common/focal.jsp Broadwing Communications] which itself was acquired<ref>[http://www.level3.com/newsroom/pressreleases/2007/20070103.html Level3 Completes Acquisition of Broadwing] Level3 press release Jan 3, 2007.</ref> by [http://www.level3.com/ Level3 Communications]. Customers must cancel their service and give up their local telephone numbers to leave Vonage, according to section 2.11 of the latest [http://www.vonage.com/features_terms_service.php?lid=footer_terms Vonage Terms of Service]. Many customers are extremely unhappy about the loss of their telephone numbers.

Vonage does not play a direct role in the port-out process, but customers can bring their number with them to another carrier of their choice. Same as when they ported the number into Vonage, customers must contact the carrier they want to bring the number to and authorize the transfer to take place. The carrier then communicates with a Service Bureau, which then acts as the intermediary to verify information about the account (name, address, features on the line, etc.), and if it matches, the Bureau reassigns the possession of the number to the new carrier. Since this is done at the customer's discretion, Vonage does not assist in the port out process, but they cannot restrict the number from being transferred. If the number is declined for transfer, this is done by the Service Bureau, usually because of a name or address mismatch.


== Fax, alarm and TiVo/DSS compatibility ==
== Fax, alarm and TiVo/DSS compatibility ==

Revision as of 06:49, 7 July 2007

Vonage Holdings Corp.
Company typePublic (NYSE: VG)
IndustryCommunications services
FoundedJanuary 2001 in Edison, NJ
HeadquartersHolmdel, NJ, USA
Key people
Jeffrey A. Citron; Chairman, Interim CEO, Chief Strategy Officer and Co-Founder
John S.Rego; CFO
ProductsVoice over IP
RevenueIncrease$607.397 million USD(2006)
Decrease-$338.573 million USD(2006)
Number of employees
1,416 (2005)
Websitewww.vonage.com
Vonage Logo until 2006

Vonage (NYSE: VG) (pronounced [vˈɑnɪdʒ]) is a publicly held commercial voice over IP (VoIP) network and SIP company that provides telephone service via a broadband connection (the company's name is a play on their motto "Voice-Over-Net-AGE").

Vonage promotes itself as "Vonage the Broadband Phone Company®"[1] in the U.S. and as "Leading the Internet Phone Revolution." Vonage currently holds the most subscribers, and is currently operating on 2.2 million subscriber lines[2] having completed well over 5 billion calls.[citation needed] Vonage has led the Voice over Broadband (VoBB), or Broadband Phone industry through its aggressive consumer marketing in the United States, Canada, UK and other countries globally.

In order to use the service, customers must purchase or use a "Vonage" branded "VoIP router" or a phone adapter that connects to their main router or broadband modem. In addition, an upload speed of 30–90 kbit/s as well as a reliable/QoS optimized connection is necessary to make calls without substantial lag or jitter.

Vonage was originally based in Edison, New Jersey but is now located in Holmdel, New Jersey, in a building previously occupied by Prudential.[3] Vonage offers services to subscribers throughout the United States. The company expanded into Canada in April 2004 and into the United Kingdom in January 2005.

On April 12, 2007, Vonage CEO Michael Snyder agreed to step down as Chief Executive Officer and resign from the company's Board of Directors. In his place, Chairman and Chief Strategist Jeffrey A. Citron will serve as Interim CEO[4]. The company also announced plans for 10% (180) layoffs[5].

Initial Public Offering

Vonage went public on May 24, 2006 at a price of $17 per share, and dropped 23.5% to $13 the following day. The closing price on 25 March 2007 was $3.00.[6]

Prior to the IPO, Vonage solicited its customers[7] via automated phone call announcements and emails with an offer to buy shares of the IPO. The price fell $2.15, or 12.7 percent, to close at $14.85 on the New York Stock Exchange: the worst trading day for any IPO in 2006 up to that point. The IPO raised $531 million for the company. Vonage's post-IPO handling of individual pre-IPO investors resulted in a class-action lawsuit[8](pending March 2007), earning the Vonage IPO a Business 2.0 Magazine award as 14th of 101 Dumbest Moments in Business for 2006.[9]

Telephone number availability

Subscribers are permitted to choose any number in the country of the service they subscribe to for their primary line. Whether it be Vonage US, Canada or UK, subscribers may choose from any area code regardless of their actual residence. Subscribers also have the option of obtaining additional "virtual numbers" for a monthly fee. For example, a subscriber in Florida may choose a number with Manhattan area code 646, allowing callers from New York to be billed only for a local call. In addition, Vonage also offers 'virtual numbers' in Mexico, Canada and throughout Europe for any and all customers to choose from. This is especially beneficial to businesses with an international client base. While Vonage supports porting a telephone number in the US via the FCC's Local Number Portability (LNP), Vonage does not offer phone numbers in every area code in the United States.

Although only residents of the US, Canada, and the UK may subscribe to Vonage (paying with a credit card from their respective nation), the routers with phone ports can be plugged into the internet anywhere in the world. For instance, a student studying abroad in Brazil plugs the router and phone into a cable internet service in the apartment or into an internet café that accepts notebook computers (LAN plug-ins), and the service works with the original local phone number and pricing. The student thus receives calls from and makes calls to the home country for no extra fee. International pricing is often so low that it can be cheaper than calling direct in the same country. For example, the Vonage price to Rio de Janeiro is USD$0.06/min (2005), but calling from a cell phone or pay phone in Brazil costs about USD$0.20/min. Vonage also offers a USB phone adapter that connects a telephone to the USB port of a computer that has internet service, giving it a dial tone and a normal interface to the worldwide telephone network.

Emergency call issue

A problem with any VoIP provider is that, since the physical location of a caller may not correspond to his or her listed phone number, traditional emergency telephone number service, such as 9-1-1 and e911 in North America, is not available. Vonage emergency phone service requires subscribers to register their address with the company and is not operative in case of an Internet connection disruption or power failure (unless a UPS is used to power the Vonage telephone adapter, telephone base unit, and modem). Customers are responsible for maintaining their 911 location information at all times.

In the event that a customer dials 911 prior to the 911 verification becoming complete, the call will usually be routed to a national 911 call center where a customer must supply basic information (name, location, nature of the emergency, etc.), after which the call will be transferred to a local public service answering point, like a local Police Department.

Verizon lawsuit

On June 19 2006, Vonage acknowledged that Verizon filed a lawsuit charging that Vonage infringed on seven of its patents related to its VoIP service; the patents describe technology for completing phone calls between VoIP users and people using phones on the traditional public switched network, authenticating VoIP callers, validating VoIP callers' accounts, fraud protection, providing enhanced features, using Wi-Fi handsets with VoIP services and monitoring VoIP caller usage. Verizon is using this technology in its own VoIP service called VoiceWing.

In a statement, Vonage said "its services have been developed with its own proprietary technology and technology licensed from third parties." The company also said it would "vigorously defend (against) the lawsuit." Vonage said it hadn't been previously notified by Verizon that the company thought it was infringing on its patents.[10]

On 8 March 2007 a jury found Vonage guilty of infringing three patents held by Verizon, and not guilty of infringing two other patents. The jury ordered Vonage to pay fifty-eight million dollars, and a royalty rate of 5.5% of every sale to a Vonage customer, back to Verizon. Vonage said it would appeal the jury verdict.

The three infringed patents cover: (1) Internet to phone-system connection technology, (2) phone features such as voice-mail and call-waiting, and (3) wireless to Internet phone calls.

The patents in question: US 6430275 , US 6137869 , US 6104711 , US 6282574 , US 6298062 , US 6128304 , US 6359880 .

On April 3, 2007, Vonage and VOIP, Inc. reached an agreement to allow Vonage to use VOIP, Inc's sector of Internet to continue uninterrupted service, and addresses two of three Verizon patent infringements. The appeal ruling concerning an injunction prohibiting Vonage from using Verizon technology is still pending.

On April 6, a judge issued an injunction that would bar Vonage from signing up new customers, but did not grant the 120-day stay Vonage requested.[11]. This injunction was delayed until April 12, to allow Vonage time to submit an appeal. Later on April 6, a federal appeals court granted Vonage a temporary stay of the earlier lower court order[12].

On April 24, The U.S. Court of Appeals for the Federal Circuit in Washington D.C. issued Vonage a permanent stay of a previous court's injunction that would have barred it from signing up new customers.

Commercials

Vonage is well known for the distinctive music in its commercials. The song title is "Woo Hoo" — by the band The 5.6.7.8's.

Service Cancellation

Vonage requires customers to cancel service by calling a toll free number, as service cancellation is not available on-line. Customer descriptions of the cancellation process frequently involve hold times of approximately ten minutes, depending on call volume. Difficulties faced by customers when attempting to cancel Vonage have been detailed in blogs[13][14][15] as well as a May 2006 Wall Street Journal article[16] which related one customer's experience with a Vonage representative who refused to cancel an account unless a repair attempt was allowed by the customer. The Better Business Bureau has delisted Vonage as a member of its organization for one or more unanswered customer complaints. In the last 12 month reporting period, the bureau has closed 3199 complaints. The balance of complaints centered around service, billing and refund issues.[citation needed]

Despite marketing their service as having no contracts or long term commitments, Vonage charges customers a fee for cancellation within the two years of service, changed from one year February 1st, 2007. This fee is noted in the provider's Terms of Service when a customer signs up or attempts to access their Web Account. The fee is $39.99 per physical voice line which is disconnected. This fee does not apply to dedicated fax lines, virtual telephone numbers, or the computer-based "SoftPhone" lines. A "Rebate Recovery" fee is also assessed if the account is canceled after the 30 day money back guarantee, but before 180 days of service. This fee is the "instant rebate" which is offered on the web site when signing up and is different for each device. This fee, if applied, protects the company from having bogus accounts signed up and canceled shortly thereafter for free or discounted routers that can then be sold for profit. It is the policy of Vonage to bill anyone who is discontinuing service-for any reason-even if you are unhappy with the quality of their phone service, you will still be billed $39.99.[citation needed]

As of March 2007, FCC employees say that Local Number Portability rules do not apply to VoIP service providers such as Vonage. Vonage claims that subscriber numbers may be transferred to other companies, however, their cumbersome procedures seem designed to routinely delay or deny number transfers. Vonage says that LNP transfers are handled by Focal Communications. However, Focal was acquired[17] by Broadwing Communications which itself was acquired[18] by Level3 Communications. Customers must cancel their service and give up their local telephone numbers to leave Vonage, according to section 2.11 of the latest Vonage Terms of Service. Many customers are extremely unhappy about the loss of their telephone numbers.

Fax, alarm and TiVo/DSS compatibility

There have been widespread reports of difficulty in operating Fax machines on Vonage lines, either dedicated Fax lines, or regular Vonage lines.[19] Difficulties have also been reported with residential alarm systems and TiVo.

When using a fax machine, it is suggested that users connect their fax directly into the VoIP adapter, regardless of the provider. This ensures the least amount of variables in a specific network setup. In addition, users should ensure that an "Error Correction Mode" or "ECM Mode" is disabled on their fax machines as this compounds problems and distortion regarding the compression, decompression, and transmission of data communications through a VoIP provider. Also the "Baud Rate" should be lowered to no more than "9600". When faxing the fax should be set to "Standard" instead of "Photo or Fine."

It is suggested to contact your local home alarm system operator to determine whether or not your existing home alarm solution is compatible with any VoIP provider.

TiVo's Series 1 units contain only telephone ports to connect to a wall jack. Series 2 and Series 3 hardware contains an ethernet jack, and optionally supports USB-based WiFi adapters, which typically do work properly with VoIP providers. At one point, the initial connection made by the TiVo unit required the use of a regular telephone landline prior to use with a broadband connection, but this limitation was removed in 2005 with TiVo version 7.2[20].

Vonage's Early History as Min-X.com

Vonage had its genesis in a company called Min-X.com ("The Minute Exchange"). (If you type in http://www.min-x.com, it will redirect to vonage.com) Jeff Pulver, noted VoIP evangelist and owner of the successful VON conferences, incubated Min-X.com at his offices in Melville, NY on Long Island between December of 1999 and December of 2000. Based on his experience at the bond trading giant, Cantor Fitzgerald, Pulver knew that any commoditized product is easily traded in a market. The year was 1999 and Enron was at the zenith of its global trading business. (Enron at this point even had a bandwidth trading exchange.) Pulver knew that the global IP telephony market had reached a tipping point in 1999. There were a significant number of regional IP telephony companies spread across the globe with large amounts of gateway capacity that could be efficiently brokered for profit. Unlike Enron's bandwidth trading market, Pulver's market would be a market where IP Telephony minutes and capacity could be traded in both a spot and futures contracts. By summer of 2000, Min-X.com had about six employees who were either technologists or former bond or stock traders. There was a business plan and initial "trading platform" prototypes built on Cisco, Clarent and Vocaltec IP Telephony equipment. Unfortunately, Min-X did not have full time management leadership and despite the many pitches to VCs, the initial funding necessary to bootstrap the firm was just not there. It wasn't clear that Min-X would get farther than just an idea.

  • pulver, jeff (2005-08-05). "Jeff Pulver Blog". Jeff Pulver Blog.

About this same time, Jeffrey Citron (the other Jeff) was coming off a year long vacation having been bought out of his position as CEO and majority shareholder at Datek Online. Jeffrey was set for life and was annually listed on Forbes's "40 wealthiest under 40" roster with a publicly known net worth of $750 million. Despite having been barred from stock trading by the SEC for life, he was ready for a new challenge to propel him into the billionaire range of the famous Forbes list.

Daniel Berninger, noted VoIP pundit and analyst with Tier 1 Research, was working for Pulver in 2000, and was helping Pulver bootstrap various new businesses including MinX, Arieta and Free World Dialup. [By the way, Arieta.com's business plan focused on VoIP ATA186's from Komodo phone that would allow global calling ... Sound familiar?] Dan's wife, an executive recruiter with a deep book, knew of Citron's availability and placed the call to Jeffrey. Citron's first inperson meeting with Pulver on the topic of Min-X happened in August of 2000. Citron was chauffeured to the meeting in Melville in his own helicopter. Pulver gave the pitch, while Citron, confident and exceedingly sure of himself, was piqued by the idea of starting a new and (more importantly) unregulated marketplace. This could be the ticket to the billionaire zone. (Enron had minted several billionaires by creating dozens of new and unregulated marketplaces.) By October 2000, a deal was struck and Citron invested roughly $10 million of the $12 million seed and took the title CEO of MinX.com. The convergence of so many important factors created a fantastic exuberance throughout the nascent company.

Citron immediately brought in his trusted banker, Carlos Bhola and offered him the position of President. Bhola was one of Frank Quatrone's disciples from the internet banking group at CSFB and by 2000 Bhola had formed his own boutique investment banking advisory group. Bhola and his team joined the company and quickly got to work building a better business plan and revenue model for Min-X to raise more money.

Bhola's first conclusion was that an independent IP telephony minute trading marketplace was not going to stand on its own. Wholesale minute prices are priced in pennies. Brokerage commissions, as a percentage of the minute price would generate commissions in the fraction of a cent. This meant that billions of minutes would have to be traded monthly to generate a reasonable profit. Assuming that every regional IP telephony company joined the Min-X trading marketplace, the combined total of all the commissions generated on all the traded minutes from all the companies would not generate an attractive investment return. This calculation was true, even as growth in IP telephony was factored in. What was needed in this minute marketplace to spark exponential growth was a massive consumer of capacity who would perpetually buy minutes. "Min-X Enterprise Services," a company focused on selling IP voice services was born. Bhola and team, reran the numbers on the 2 new businesses. By November 2000, it became obvious that the really profitable business was "Min-X Enterprise Services" and not the Min-X marketplace. Efforts of all employees were refocused on building "Min-X Enterprise Services." In a December 2000 meeting in Pulver's green conference room, Citron unveiled a much more attractive name for the new entity; "Vonage." The name borrows Pulver's "VON" acronym for "Voice on the Net" and combines it with the temporal meaning of the word "age," heralding the start of new era for consumer phone service.

In January of 2001, after moving to 10,000 square feet of refurbished office space in the former Revlon building in Edison, NJ, Vonage was incorporated and commenced its ambitious plan.

See also

References

  1. ^ USPTO Latest Status Info
  2. ^ Vonage FAQs
  3. ^ Vonage Announces Plans To Move Headquarters To Holmdel Vonage Press Release publ. Holmdel Journal. Joan Colella, May 12 2005. Also archive.
  4. ^ Vonage CEO resigns, Company Moves to Cut Costs. computerworld.com, April 12, 2007.
  5. ^ Vonage Prepares To Cut Workforce 10% Information Week. W. David Gardner. 2007-4-12.
  6. ^ Investor Relations Stock QuoteVonage.com
  7. ^ Initial Public Offerings Investorguide.com Usually only large institutional investors such as banks are able to purchase shares of an IPO.
  8. ^ Investors sue Vonage over IPO CNET.com Marguerite Reardon, June 4, 2006.
  9. ^ 101 Dumbest Moments in Business #14. Vonage CNN.com. Adam Horowitz, David Jacobson, Tom McNichol, and Owen Thomas, March 7, 2007.
  10. ^ Verizon sues Vonage for VoIP patent infringement CNET News.com. Marguerite Reardon Published on ZDNet News: June 19, 2006, 11:07 AM PT
  11. ^ Vonage Dissed at Injunction Junction Light Reading. Raymond McConville. April 6,2007. Retrieved April 6, 2007.
  12. ^ Vonage Temporarily Allowed To Sign New Customers All Headline News, Nidhi Sharma. April 6, 2007 9:36 p.m. EST. Retrieved April 7, 2007
  13. ^ Cancelling Vonage Difficulties Tom Keating Blog, September 26, 2006.
  14. ^ Cancelling Vonage John Edwards July 14, 2006
  15. ^ How to Cancel Your Vonage Service Joshua Prowse, July 20, 2006
  16. ^ Vonage Faces User Complaints As IPO Looms Wall Street Journal, Shawn Young and Li Yuan, May 18 2006.
  17. ^ Corvis Corporation Completes Focal Acquisition Broadwing Press Release, September 2, 2004
  18. ^ Level3 Completes Acquisition of Broadwing Level3 press release Jan 3, 2007.
  19. ^ Vonage user forum, Faxes, Alarms and Tivo
  20. ^ TiVo Support: Can I Use My Network Connection for Initial Guided Setup?
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