Since going public, Vonage has seen a barrage of lawsuits from Sprint Nextel, Verizon, and most recently AT&T. Vonage just settled its latest dispute with AT&T, capping its loss at $39 million.

The two companies reached an initial agreement to settle over a month ago, but just committed to a “definitive agreement” according to Vonage.

AT&T claimed the VoIP provider was “using packet-based telephony products, which allows voice conversations to be carried over the Internet, based on products that use technology covered by AT&T patents,” Reuters discovered.

This follows a claim by Verizon that Vonage infringed on its Internet telephone service patent, which protects “A method of real-time interactive voice telecommunication over the Internet comprising the steps of: initiating placement of a telephone call by inputting to a first communication terminal connected to a first telephone system a series of signals that represents the combination of a called directory number portion and a unique identifier portion, said unique identifier indicative that the call is to be routed through the Internet.”

Vonage may be setting the stage for other VoIP providers who use similar technology to route their calls. That creates a bleak competitive landscape for new startups while preserving an outdated and overpriced infrastructure.

With a shrinking customer base, companies like Verizon and AT&T who own vast networks of traditional phone lines are acting to protect their industry from VoIP incumbents who offer cheaper service.

Since time to market, Vonage has seen revenue of about $793 million with total debt of about $276 million in its most recent quarter.

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Entry was posted on Wednesday, December 26th, 2007 at 6:32 pm under Legal, Technology.

Read more entries by Matt Jansen.
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