Thread: Vonage Canada wants CRTC to investigate Shaw Cable's 'VoIP tax'

TORONTO (CP) - Vonage Canada, one of the leading innovators in Internet phone service, says the federal telecom regulator should investigate what it's calling a "VoIP tax" charged by Western cable TV giant Shaw Communications (TSX:SJR.NV.B).

Vonage, which offers voice-over-Internet protocol services (VoIP) that depend on lines provided by phone and cable operators like Calgary-based Shaw, said Tuesday the company shouldn't charge an extra fee to ensure the quality of the Internet service.

The Mississauga, Ont.-based subsidiary of Vonage Holdings Corp. of Holmdel, N.J., is one of the most prominent of the companies that have sprung up with Internet phone services in the last few years.

"Shaw's VoIP tax is an unfair attempt to drive up the price of competing VoIP services to protect its own high-priced service," Joe Parent, Vonage Canada's vice-president of marketing, said in a statement.

"Shaw's actions are also part of a bigger issue of network neutrality and who controls how Canadians use their Internet service. Vonage Canada wants to ensure that the monopoly telephone and cable Internet service providers don't restrict what services, applications or content Canadians can access."

The issue of network neutrality has been a higher-profile issue in the United States where there have been congressional hearings.

Parent said in an interview that Vonage Canada also wants to raise the profile of the issue in this country, arguing that Shaw and the other Internet service providers should provide a uniform level of service to all of their customers.

Shaw, the biggest cable TV company in Western Canada and a growing telecom services operator, didn't respond to requests for comment Tuesday.

There has been an industrywide push by equipment vendors to provide for phone and cable companies with the capability of prioritizing Internet traffic, particularly as usage of older technology such as electronic mail increases and newer resource-hungry applications such as Internet TV move into the mainstream.

Vonage disagrees with that approach and believes carriers should be neutral when it comes to providing access to the Internet, Parent said.

"It is of great importance not only to the VoIP indur


http://news.yahoo.com/s/cpress/20060...E0BHNlYwN0bWE-

CALGARY (CP) - Shaw Communications (TSX:SJR.NV.B) fired back Wednesday at Vonage Canada, which claims Shaw is charging its Internet subscribers a "thinly veiled VoIP tax" that makes it tougher for others to compete with the cable company.

While Shaw's company acknowledged that it offers the "opportunity" to improve the quality of Internet service that's used to carry voice traffic for Vonage and others, it said the "service is completely discretionary to our customers."

Jim Shaw, CEO of Shaw Communications Inc., issued a statement that described a new release issued Tuesday by Vonage as "both wrong and misleading."

Peter Bissonnette, president of Shaw Communications Inc., said the timing of Vonage's media blitz on Tuesday has more to do with its U.S. parent's planned initial public offering "than any real concerns about consumers."

The Calgary-based cable company said that its own Shaw digital phone services, which uses a "managed" Internet protocol network, is not directly comparable with Internet telephony services that travel across the public Internet.

It said that all public Internet networks, not just Shaw's, encounter intermittent shortfalls in bandwidth that can result in some frames of voice and data traffic being dropped during periods of peak usage.

Shaw's quality of service enhancement, the company said, helps address these shortcomings with Internet telephony services like those offered by Vonage.

Vonage Canada of Mississauga, Ont., which had asked the federal communications regulator in November to investigate Shaw's quality of service enhancement fee, reiterated its request Wednesday.

"In its release today, Shaw conveniently ignored answering any of the questions Vonage Canada posed to the CRTC about Shaw's VoIP tax," Joe Parent, vice-president of business development and marketing, said in a release.

"Instead, Shaw simply regurgitated the vague information already posted on its website without offering its customers or Vonage Canada customers a clear explanation."

On Tuesday, Parent dismissed the argument that some types of traffic over the public Internet should get higher priority than others.

Instead, he argued Shaw should increase the capacity of its networks to handle the peak loads without requiring prioritization of the traffic flows.

Shaw stock traded Wednesday at $29.42, up two cents, at the Toronto Stock Exchange.


http://news.yahoo.com/s/cpress/20060.../shaw_vonage_2

Voices on the Internet are turning into a shouting match, as Vonage Canada and Shaw Communications release their latest salvos in an on-going battle over third-party provider fees.

Shaw calls the Vonage complaint "old and tired"; Vonage says the battle is over "freedom of choice" on the Internet.

Shaw Responds to Vonage Canada's Claims

"Vonage's news release concerning Shaw's quality of service enhancement is both wrong and misleading," said Jim Shaw, C.E.O., Shaw Communications Inc. Shaw offers its High Speed Internet customers the opportunity to improve the quality and reliability of Internet telephony services offered by third party providers like Vonage and others. The service is completely discretionary to our customers.

All public Internet networks (this is not unique to Shaw) encounter intermittent bandwidth shortfalls as bandwidth is consumed by applications such as Internet browsing and email, the statement continued.

Bandwidth availability is an important issue when using voice services because the amount of bandwidth available at any given time can vary based on Internet usage. With Internet telephony, voice packets are treated like regular data. Under peak loads voice frames will be dropped equally with data frames. Regular data, however, is not time sensitive and dropped packets can be corrected through the process of retransmission. Dropped voice packets, which are time sensitive, cannot be corrected in this manner. Shaw's quality of service enhancement helps address these shortcomings with Internet telephony.

Contrary to Vonage's claim, Shaw says it does not offer an Internet telephony service in direct competition with Vonage or any other Internet phone provider. Shaw's Digital Phone service is a carrier-grade, primary line, local and long distance residential telephone service that uses a managed IP network. Shaw Digital phone calls travel directly from Shaw's secure private network to the tried-and-true public telephone system. They do not travel over the Internet. The result is a more reliable and higher quality phone service.

It's also important to realize, Shaw says, that Internet telephony services do not provide the same level of 911 service that is available with traditional phone service or Shaw Digital Phone. With Internet telephony, your 911 call is routed to an emergency response centre which may be in a different city or province. With enhanced 911 service, available with Shaw Digital Phone, your call is not only routed to the nearest emergency response centre, but your callback number and address are also automatically provided to the
emergency dispatcher. Even if you are unable to speak, they can still dispatch emergency
personnel to your location. Vonage does not provide enhanced 911 service.

"This is an old and tired complaint from Vonage," said Peter Bissonnette, President of
Shaw Communications Inc. "We find the timing of this news release to be somewhat curious. We think it has more to do with their Initial Public Offering and the fact they have so few customers in Canada rather than any real concerns about consumers," he
added. "Our customers have always enjoyed the best High Speed Internet service in Western Canada. Our quality of service enhancement is simply another value added service that our customers have asked for and our over 8,000 employees will continue to
ensure we provide the best services we can," said Peter Bissonnette.

Shaw Communications Inc. is a diversified Canadian communications company. Shaw is traded on the Toronto and New York stock exchanges and is included in the S&P/TSX 60 index.


Vonage Canada challenged Shaw "VoIP tax"

Vonage Canada disclosed its request to the Canadian Radio-Television & Telecommunications Commission (CRTC) to ensure fair and competitive telephone service for Canadians, the company described, adding it asked the CRTC to investigate Shaw communications' "thinly veiled VoIP tax" to determine if Shaw is unfairly driving up competitor's prices and forcing Western Canadians to pay more for phone service.

Shaw recommends to its high-speed Internet customers that they pay an additional $10 charge if they use a Voice over Internet Protocol (VoIP) phone service provider such as Vonage Canada. Shaw claims its "quality of service enhancement" fee, which it does not charge to its own Internet phone customers, is necessary to ensure independent VoIP service is not disrupted or degraded, Vonage has stated.

"Shaw's VoIP tax is an unfair attempt to drive up the price of competing VoIP services to protect its own high-priced service," said Joe Parent, vice president of marketing, Vonage Canada. "Shaw's actions are also part of a bigger issue of network neutrality and who controls how Canadians use their Internet service. Vonage Canada wants to ensure that the monopoly telephone and cable Internet service providers don't restrict what services, applications or content Canadians can access. Canadians demand and deserve freedom of choice."

In its submission to the CRTC, Vonage described the VoIP tax as a possible "red herring" because Shaw had refused to provide a technical explanation for how its enhancement works or why it is necessary.

"Shaw has built a world-class network which Vonage customers use everyday with confidence and satisfaction," said Parent. "Recommending that its customers pay extra if they don't use Shaw's Internet phone service is unfair. Vonage Canada had little choice but to request that the CRTC determine the validity and fairness of Shaw's fee structure."

In its CRTC submission, Vonage Canada said: "Because Vonage competes directly with the telephone services of the network operators that also provide the high-speed Internet access, the incentives to discriminate against us are clear. This will result in less innovation, less choice and higher prices for Canadian consumers in the long run."

"If the type of action represented by Shaw's (enhancement) service is not seriously investigated and addressed by the Commission, there will be a heightened risk of a duopoly in local voice (phone) services," that will unduly favour the phone and cable companies who provide the Internet access.

"In the absence of credible, complete information, there is good reason to believe (Shaw's) service offering is not an enhancement to Shaw's high-speed Internet service but rather is an anti-competitive measure aimed at either increasing the perceived cost, or damaging the perceived reliability, of the services of independent Internet telephone service providers when compared to Shaw's higher-priced phone service."

Among the questions Vonage Canada has requested the CRTC address:

· What does Shaw's so-called 'enhancement' service consist of, from both a technological and service implementation perspective?
· What evidence does Shaw have to prove its 'enhancement' service actually delivers on the promise of enhancing a customer's use of a non-Shaw phone service provider and to what extent?
· What is the justification for a recurring charge to the customer for a service that it appears may consist of a one-time configuration of the Shaw-approved cable modem used by Shaw's high-speed Internet customers?
· What is the take-up rate – past, present and likely future – of Shaw's enhancement service, and what is the likely effect of the service on competition in local VoIP services?

"Vonage believes the Internet could not exist without network neutrality," said Parent. "Canadians shouldn't be asked to pay twice to use their Internet connection for whatever they want, including VoIP service," said Parent. "Imagine if the power company could dictate the brand of appliance you can plug into your wall? It's the same principle with Internet service."

Vonage Canada is headquartered in Mississauga, ON. Vonage Canada is a subsidiary of Vonage Holdings Corp. Vonage is a registered trademark of Vonage Marketing.


http://www.cablecastermagazine.com/i...issue=03092006