Vonage’s emergency call to SBC
Red Herring
March 30, 2005
SBC rejects Vonage bid to work on a joint 911 system for VoIP customers.
SBC has turned down overtures from Vonage to work together on developing 911-style emergency services for the VoIP company’s customers.
Vonage approached SBC with an offer “to test and deploy a joint VoIP E-911” service in a February 18 letter from CEO Jeffrey Citron to SBC CEO Edward Whitacre. “We cannot resolve fundamental issues associated with providing a native E-911 service to VoIP users without your assistance,” he said.
Mr. Citron received a response on March 25 from Christopher Rice, SBC’s Executive Vice President of Network Planning & Engineering. “SBC would welcome the opportunity to have its 911 expert meet with Vonage to explain SBC’s current 911 offerings,” Mr. Rice said. “We cannot agree, however, to participate in a separate, proprietary trial with Vonage.”
Mr. Rice also points to Telcordia as a carrier with which SBC has been working to deliver 911 calls, and cites SBC’s own 911 solution available to VoIP providers, called the Switched IP Service.
SBC’s decision didn’t sit well with Mr. Citron. “I write to express my concern and disappointment at SBC’s refusal to work directly with Vonage,” Mr. Citron said in a March 28 letter. “Vonage renews its request to jointly test and deploy a VoIP solution as soon as possible.”
Vonage has cause for concern. The company was recently sued by the State of Texas as a result of an incident with a teenager who was unable to reach 911 through the Vonage service in an emergency situation (see “TechSpin: Vonage’s bad call”). Texas Attorney General Greg Abbott stated that Vonage should be clearer about the fact that its 911 access can be unreliable. Vonage’s web site clearly states that the service does not support traditional 911 or E911 access to emergency services.
Some analysts call Vonage’s request to SBC unreasonable. “Vonage is SBC’s competition. Why would SBC feel that it has to do anything to help Vonage?” asks William Stofega, an analyst at IDC.
“Vonage has the money to do so much advertising. They need to put the money into making the system bulletproof,” said Mr. Stofega. “The argument that these services can replicate everything for free is a bunch of crap. Vonage needs to take care of this. But once they do, it will cut down on their price advantage.”
The VoIP industry is expected to reach $82 billion globally this year and $196.5 billion by 2007, according to Insight Research.
Vonage, along with the majority of startup VoIP providers, don’t own the networks over which they run services. Companies like SBC own the infrastructure to switch calls to public services.
As the VoIP industry grows, clear regulation determining how VoIP providers will work with the entrenched network owners, becomes increasingly important. The FCC probably won’t rule until next year on whether VoIP providers are information services or telecommunications services.
VoIP providers are offering price points as low as $25 per month attempting to undercut standard telephone service. The traditional voice providers are all cautiously moving into VoIP and have more cash to help create quality services, including access to emergency services. |
