Competitive Intelligence

AT&T Expands VoIP Service, Promptly Sued by Competitor Vonage

Just a few days ago, AT&T revealed plans to make its voice-over-IP Internet phone service more widely available - then promptly got punched in the mouth by competitor Vonage, with a lawsuit based on the name of the product. AT&T is certainly provoking a little, but I have to say, they’re finally learning to join ‘em, after years of failing to beat ‘em.

The service, known as "CallVantage," is available to residential customers in 11 northern and central New Jersey counties, as well as areas of Texas, including Austin, Dallas, Fort Worth, and Houston. AT&T hopes to offer the service in the nation's top 100 markets by year's end. As if waiting for the announcement, VoIP vendor Vonage filed a trademark lawsuit in U.S. District Court in New Jersey claiming CallVantage is confusingly similar to Vonage.

Here's an excerpt from eWEEK.com:

Vonage Holdings Corp. has sued AT&T Corp. for trademark infringement, alleging that the name of AT&T's newly launched VOIP service is confusingly similar to its company and product name.

In its lawsuit filed last week in U.S. District Court in New Jersey, Vonage alleges that AT&T is infringing on its name by launching a VOIP service named CallVantage. Vonage also is accusing AT&T of cyber squatting for having filed a series of domain names in February that it says are similar to those owned by Vonage. Those Web addresses include variations on "callvontage" in the .com, .net and .biz domains.

The lawsuit points to the growing stakes in the VOIP market as more providers enter the space. AT&T rolled out its residential CallVantage service at this week's Spring 2004 VON Conference & Expo in Santa Clara, Calif. It announced availability for New Jersey on Monday and launched the service Tuesday for parts of Texas.

Vonage of Edison, N.J., was founded in 2001 and first launched its Vonage Digital Voice service over broadband connections in March 2002. Brooke Schulz, Vonage vice president of corporate communications, said the company has spent three years building up brand awareness and had tried to resolve the name issue with AT&T before filing the lawsuit.

"This is really about confusion in the marketplace," Schulz said in an interview with eWEEK.com at the VON show. "We welcome them to the marketplace, but we want them to use a different name."

Officials at Bedminster, N.J.-based AT&T declined to comment on the specifics of the lawsuit but said they were confident of its outcome in their favor.

"We simply think the suit is without merit, and we do believe that we will prevail," AT&T spokesman Gary Morgenstern said.

The Vonage lawsuit is seeking an injunction to prevent AT&T from continuing to use the CallVantage name as well as a requirement for AT&T to transfer the disputed domain names to Vonage.

As a Vonage customer myself, I can say, it's pretty sweet - unless you're talking to someone while also sending a large upload... at which point call quality craters. This probably isn't fixable, and is only intermittently annoying. But, I personally hope AT&T has some success in defending itself in the VoIP market. Competition is good for consumers, as AT&T learned first-hand from competitors itself.

- Arik