Vonage Clears Up Last Legal Cloud on Horizon

08 November 2007

Tentative $39 million settlement with AT&T means that the VoIP pioneer can get on with business.

That makes it three down and none (that we know of) to go. Vonage's tentative settlement of AT&T's patent-infringement lawsuit takes care of its last oppressive legal problem, following similar settlements with Sprint Nextel and Verizon.
Now, the company can get on with the business of providing cheap
consumer broadband VoIP. The question is how good that business will
be, especially since the settlements will set the VoIP pioneer back a
significant sum.

agreement in principle, which Vonage described in its Q3
financial-results announcement, would require it to pay AT&T $39
million over five years. That's a lot less than the $80 million it will
pay Sprint and the $80 million to $120 million it will pay Verizon.
While the combined payouts will amount to some $200 million or more,
they eliminate some major uncertainties about Vonage's future. It's a
big change from the dark days in March 2007 when the initial court loss to Verizon left it unclear whether the VoIP pioneer would be able to keep operating.

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