A CNBC Morning

This morning on CNBC I woke up to talk about net neutrality and an analyst who said Google makes a good buy regardless of what happens with net neutrality. From net neutrality the program went on to Comcast customer service — I think they might have been focusing on heavy machinery while I was in the shower — it is tough to tell with the water running. Someone apparently videotaped a Comcast customer service representative sleeping on their couch while waiting an hour for the Comcast office to pick up the phone. This reminded me a of a Comcast customer service blog entry I made almost a year ago. Add Comcast to the list of companies being publicly ridiculed because of poor customer service. AOL must feel relief that the spotlight is moving off them.

Then the newscaster discussed VoIP providers contributing to the USF and what a disaster this new development will be to the industry and Vonage. Unfortunately there was an analyst on the program who basically painted a doom and gloom scenario. Explaining that the cost difference between VoIP and the PSTN is these fees that VoIP providers now have to pay.

Of course this whole argument forgets the most important point – Vonage already pays into the USF. Whoops – it is tough to make a point when you have none.

Beyond that, there is more cost savings using VoIP than just the USF savings. Worse, this analyst failed to mention that perhaps less than 0.1% of the population knows what they pay into the USF. In the world of cell phone service where fees and taxes seem to equal the actual cost of wireless service, most of us buy plans that are $69/month, etc. Never have I known what the USF fees will be on my phone bill ahead of time. And after the fact, I have never canceled my phone service because of these USF fees and various taxes.

But this was not a surprise to me as I predicted the USF issue would be used as a way to slam Vonage regardless of whether it makes sense or not. My exact quote was: “I expect Vonage to be hit hard by this news as Wall Street seems to be looking for reasons to punish Vonage. This will likely be another one."

Many in the VoIP market are concerned that Vonage has become the poster child for not only VoIP but for the broader IPTV and IP communications spaces. Companies have told me some investor opportunities have slowed or been paused because of the “botched” Vonage IPO.

Other VoIP providers are looking to differentiate themselves from Vonage when a few months back they were looking to emulate this New Jersey based VoIP service giant.

That is not to say that funding in the market has ceased. It just seems it may have slowed for the moment. Many sit on the edge of their seats wondering whether Vonage will have good numbers in the next few quarters. Their success or failure will have extremely broad ramifications throughout the IP communications markets. But as I have said before, with so much easy money out there, perhaps it can’t hurt to have a further drag on the IP communications market. This hopefully ensures that investors will proceed cautiously. I don’t think it is in anyone’s best interest to see investors fund hundreds or thousands of competitors with the same business model. This is too reminiscent of the dotcom/CLEC days.

While I am righting wrongs, I thought I should correct the newscasters and journalists who continue to promote the fact that Vonage is the only public VoIP company – they forget about companies like Packet8 for some reason.

If the Vonage IPO is not a positive for the IP communications space at the moment, at least it is keeping things very fluid. Whether that is good or bad depends on your perspective.

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