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VoIP Week in Review from TMCnet: Vonage v.s. ShawTMCnet Contributing Editor This was a very interesting week in the VoIP industry. The hottest news brawl, of course had to be the one between Vonage (News - Alert) Canada and ZingoTel, against Canadian cable operator Shaw Communications.
The fiasco began two weeks ago when Vonage Canada asked the Canadian Radio-television and Telecommunications Commission (CRTC) to investigate why cable operator Shaw Communications is currently charging Vonage subscribers a $10 "quality of service enhancement" fee, or hidden VoIP tax. Shaw's actions could cause that Vonage subscribers opt to switch to the operator's own VoIP offering. The switch would eliminate the fee. "Shaw's VoIP tax is an unfair attempt to drive up the price of competing VoIP services to protect its own high-priced service," said Joe Parent, vice president of marketing, Vonage Canada in a statement released this week. "Shaw's actions are also part of a bigger issue of network neutrality and who controls how Canadians use their Internet service. Vonage Canada wants to ensure that the monopoly telephone and cable Internet service providers don't restrict what services, applications or content Canadians can access. Canadians demand and deserve freedom of choice."
In its CRTC submission, Vonage Canada said: "Because Vonage competes directly with the telephone services of the network operators that also provide the high-speed Internet access, the incentives to discriminate against us are clear. This will result in less innovation, less choice and higher prices for Canadian consumers in the long run."
"If the type of action represented by Shaw's (enhancement) service is not seriously investigated and addressed by the Commission, there will be a heightened risk of a duopoly in local voice (phone) services," that will unduly favor the phone and cable companies who provide the Internet access.
"Vonage's news release concerning Shaw's quality of service enhancement is both wrong and misleading," declared Jim Shaw, CEO, Shaw Communications Inc., in response to Vonage's action of seeking help from the Canadian Radio-television and Telecommunications Commission’s (CRTC).
Shaw claims that its digital phone service offering does not directly compete with Vonage's VoIP-based calling service.
According to the Shaw's news release, "Shaw's Digital Phone service is a carrier-grade, primary line, local and long distance residential telephone service that uses a managed IP network. Shaw Digital phone calls travel directly from Shaw's secure private network to the tried-and-true public telephone system. They do not travel over the Internet. The result is a more reliable and higher quality phone service."
Shaw also mentioned that VoIP service providers don't offer the same level of 911 access as Shaw does or as legacy phone service providers offer.
Shaw's president, Peter Bissonnette claimed that Vonage's dispute is a publicity stunt because the company is very close to filing for an IPO.
It seems like Shaw's shady consumer acquisition practices kept getting the company into even more serious trouble. On Thursday, the company was slammed with a $1.2 million lawsuit from U.S.-based VoIP provider ZingoTel. ZingoTel claims that the Canadian cable operator refused to air a ZingoTel television ad because it promoted a competing VoIP-based calling service.
According to an article published in the Calgary Herald, ZingoTel had agreed to pay Corus Entertainment, Shaw's media buyer, a total of $36,000 to air the ad in one of the cable operator's channels. "The ad was later vetoed by Shaw chief executive Jim Shaw, according to ZingoTel's statement of claim. It alleges Corus was informed by e-mail that 'Shaw will not accept any VoIP advertising business on cable.'"
The Herald reported that in the suit ZingoTel is also seeking damages from Corus and that it also filed a complaint with the Canadian Radio-television and Telecommunications Commission (CRTC).
The Minute was shocked to report about this incident in Minnesota. Loren Veltkamp, a homeowner in Chanhassen, Minnesota, lost his house to a fire last month. When Veltkamp noticed that the fire had started, he immediately called 9-1-1 using Vonage. Unfortunately, Vonage put him on hold, causing a delay in the response from emergency workers.
"I called 911 using Vonage broadband and they put us on hold," Veltkamp said when he was interviewed by ABC channel 5 Eyewitness News Minneapolis/St. Paul. "Unbelievable… your house is burning down, and you're put on hold by Vonage."
By the time fire crews arrived, the fire had become a five-alarm blaze. The house was a total loss, but no one was injured.
Vonage claims that nearly 70 percent of its customers now have E911 access, a feature that automatically associates a physical address with the calling party's telephone number.
There you have it folks, another exciting week in the VoIP industry! Stay tuned and read the VoIP Minute Watch for the latest news…
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Johanne Torres is contributing editor for TMCnet and Internet Telephony magazine. To see more articles by Johanne Torres, please visit Johanne Torres' columnist page.
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