Vonage to pay $58 million in Verizon patent case

Marguerite Reardon
http://news.com.com/Vonage+to+pay+58+million+in+Verizon+patent+case/2100-1036_3-6165747
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Internet phone provider Vonage has been ordered to pay $58 million to Verizon Communications for infringing on three of the company's patents.

Vonage, which provides a service that turns broadband connections into phone lines, was found by a Virginia jury to have infringed patents that cover the technology used to connect these VoIP calls to the regular phone network, as well as some features for implementing call-waiting and voice-mail services.

The monetary damages and the ongoing royalties awarded Verizon could have a significant impact on Vonage, if it doesn't come up with a solution that doesn't infringe the patents. The Internet phone service provider has yet to turn a profit.

But the biggest risk for Vonage is that the company could also be forced to shut down its service. In addition to the damages, Verizon is asking the court for an injunction. On March 23, U.S. Judge Claude Hilton will hear arguments to decide whether Vonage's service should stop offering service until an acceptable licensing agreement can be worked out. Vonage said in a press release that it doesn't expect any interruption in service.

"Even though the damages could have been worse, the royalty fees and ongoing legal battle, will add more expenses," Moran said. "And that could impact the future profitability of the company."

Cities fighting Qwest's bid for statewide video

Kimberly S. Johnson (1.17.07)
http://www.denverpost.com/headlines/ci_5033844

Local municipalities are fighting back against proposed legislation that would give Qwest a statewide cable-franchise agreement to offer video services.

The bill, being sponsored by state Rep. David Balmer, is expected to be introduced next week. Balmer, a Centennial Republican, has said the goal of the legislation is to increase competition. Arvada Mayor Ken Fellman said legislators should oppose the upcoming bill because it takes too much authority away from local cities and towns.

"The legislation is designed around streamlining the process around obtaining a franchise," said Chuck Ward, Qwest's state president. "This is a bill about bringing competition to the cable market in a faster manner than what we've been able to achieve so far."

Many Colorado officials feel that this bill is no way to create competition and that local franchise processes do not hinder competition.

Regardless, the authority of individual municipalities to control permits and other matters related to any new video network should be respected, Arvada Mayor Ken Fellman said.

Comcast also opposes the bill.

Qwest cable help push bill to bypass municipal franchise requirements

By Andy Vuong

http://www.denverpost.com/portlet/article/html/fragments
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State Rep. David Balmer said Thursday he will introduce legislation that would allow Qwest to seek a statewide cable-franchise agreement.

Qwest currently has to seek franchise agreements with individual municipalities before it can offer video service to compete against cable companies such as Comcast. So far, the Denver-based company has reached agreements with only a few communities in Colorado.

Balmer, a Republican from Centennial, said the legislation is aimed at increasing competition. Balmer said he will introduce the bill "shortly" but has until the end of the month to do so.

The key issue between Qwest and individual municipalities has been network build-out requirements. City leaders want Qwest to offer its video service to every home, a requirement also placed on Comcast, the incumbent cable-TV provider in the metro area. Qwest wants the freedom to pick which neighborhoods it will offer its video service to.

The build-out requirement "is a barrier to competition," said Chuck Ward, Qwest's state president. He said Qwest shouldn't have to build out to every home, because it is the second entrant into the market.

"There is every opportunity for new entrants to enter the market today under the existing rules without any special franchising deals or special legislative loopholes," Comcast spokeswoman Cindy Parsons said.

Darryn Zuehlke, director of Denver's telecommunications office, said the Denver City Council insists that Qwest offer its service to every resident but is flexible on the time frame in which that requirement is met.

Some states, including California, have already passed statewide franchising legislation. Other states in Qwest's 14-state service territory will also likely see similar legislation this year, including Iowa, Minnesota, Utah and Idaho, Ward said. In addition, Qwest's Oregon president Judy Peppler has said a franchising bill will be introduced there this year.