PARIS/AMSTERDAM (Reuters)—French telecoms equipment provider Alcatel is in talks with its smaller U.S. rival Lucent Technologies to create a combine with sales of 21 billion euros ($25.33 billion), the companies said late on Thursday.

They broke off previous merger talks in 2001 after Lucent balked at the idea of an Alcatel takeover and they said on Thursday they were discussing a potential “merger of equals” that was intended to be priced at market, meaning with no premium on their stock prices.

Their merger would produce a company larger than Cisco Systems and would mark the latest round of consolidation in the telecoms and media sector as companies respond to the rapid conversion of technologies and the growth of “triple play,” the provision of TV, high-speed Internet and voice services over phone lines.

It would also give the two companies a combined market capitalization of more than 28 billion euros ($33.78 billion).

“The customer suggests what the vendor should do. Purchasing power comes with being big. And secondly there are always synergies to be made by combining operations,” Lucent Chief Operating Officer Frank d’Amelio told Reuters two weeks ago, when asked about mergers between equipment vendors.

The overnight news barely moved Alcatel shares at the opening of the Paris bourse but by 0824 GMT the stock was up by 4.75 percent at 13.45 euros.

http://www.eweek.com/article2/0,1759,1942255,00.asp?kc=EWRSS04069TX1K0000701

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It seems like Shaw Communications’ shady consumer acquisition practices keep getting the company in serious trouble. The company was just slammed with a $1.2 million lawsuit from U.S.-based VoIP provider ZingoTel. ZingoTel claims that the Canadian cable operator refused to air a ZingoTel television ad because it promoted a competing VoIP-based calling service.

According to an article published in the Calgary Herald, ZingoTel had agreed to pay Corus Entertainment, Shaw’s media buyer, a total of $36,000 to air the ad in one of the cable operator’s channels. “The ad was later vetoed by Shaw chief executive Jim Shaw, according to ZingoTel’s statement of claim. It alleges Corus was informed by e-mail that ‘Shaw will not accept any VoIP advertising business on cable.’”

http://news.tmcnet.com/news/2006/03/22/1481510.htm

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SAN JOSE, Calif.—Qwest Communications CEO Richard Notebaert on March 15 voiced his company’s commitment to “net neutrality,” saying his company would never block traffic or degrade network performance as a way to maintain competitive advantage.

But with the next breath Notebaert said that government regulation shouldn’t prevent service providers from negotiating “commercial agreements” that allow them to deliver different types or grades of service at a specific price. The market should be allowed to determine how it will package and charge for network services, he said.

“My job has never been to degrade service or to give any customers less capability than they asked for and paid for,” Notebaert said, speaking at the VON (Voice Over Network) Spring Conference here.

However, Notebaert’s position raised questions in the audience about Qwest’s commitment to net neutrality if these commercial agreements might tend to restrict the public access or raise the cost of accessing Internet services or content.

Read more

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Over the last couple of weeks,there’s been quite a ruckus caused by what some deem Canada-based ISP Shaw Communications’ $10 “packet prioritization” fee for guaranteed Quality of Service on non-Shaw VoIP calls carried over their broadband network.

Vonage has complained to the Canadian Radio and Television Commission. Now Slashdotters are making their voices known as well.

Although some in the Slashdot community seem to think it is reasonable for Shaw to ask for these voluntary fees, others are angry at the very idea.

“This is a good reason for me not to use thier (Shaw’s) service anymore. I use Primus’ VOIP telephone and Ive noticed its cutting in and out lately,” writes skrye. “This is just bogus and If it continues they will lose me as an internet customer. Shaw also recently announced their VOIP service so this has to be considered anti-competitive.”

“I can download and upload stuff super fast, I just can’t talk on the phone which uses a few kb/s of my hundreds k of bandwidth. This is ridiculous,” tdzido fumes. “I’m surprised that nobody from the VOIP world has done some serious research and actually sued the big telecoms. Or maybe I’m so wrong making my common-sense assumptions?”

But mikers adds another script to this argument: for technical reasons he doubts that the $10 QoS fee will be a bulletproof guarantor of QoS.

“The biggest problem I can see is that the QOS enhancement is only valid over Shaw’s network, and if your voip provider doesn’t peer directly with shaw, your voip packets will be at some other carrier’s mercy once they leave Shaw,” writes mikers.

“The second biggest problem is ping times,” he adds. “Some of my VOIP providers are 13 hops from where I am (and three network peering points away), and even with QOS there is no way to keep round trip delay to less than 100 milliseconds — at which point the lag is noticable and gets irritating. No amount of QOS from Shaw will fix the number of hops.”

Then mikers indicates the teachable moments from this QoS controversy:

“The lesson to learn is that QOS is useful if you are on a saturated part of the shaw network, you call during busy times of the day AND (this is important) your voip provider is a short number of hops from you AND ON THE SHAW NETWORK!,” he writes.

“Otherwise save your money,” he writes. “Oh yeah, and write letters to the CRTC to get them to stop Shaw, Bell and Telus from doing this two tier internet garbage!”

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With the NTP-Patent Legislation overhang gone, Research In Motion, aka RIM is finally beginning to flex its muscles and play to its enterprise strengths. It just announced Google Talk for Blackberry in partnership with Google. (It apparently drops Google Talk chats right into the Blackberry Inbox.)

But that announcement is quite marginal compared to RIM’s acquisition of Ascendent Systems, a company that makes IP-based systems for large corporations, and can integrate tightly with existing PBX and IP-PBX telephony systems to “push” voice calls and extend desk phone functionality to mobile users on their wireless handsets, or any wireline phone. No terms were announced, but Alec Saunders thinks that it will be more than $20 million Ascendent raised from VCs.

From a Voice 2.0 perspective, this is a big deal. “Essentially, Ascendent transforms the Blackberry into a mobile desk phone, with the capability to forward, transfer, conference etc calls,” Alec says. In other words, the big boys are still talking convergence - Blackberry is doing it.

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Mobilemag reports that the Palm OS will soon have a piece of VoIP software called MobiVoIP which will allow origination of Vonage-style VoIP calls from a Palm device. My opinion is that the service won’t earn much money and people will just ask “why”? I mean, the only devices with enough bandwidth to support the voice applcation are going to be voice-enabled devices anyway. Why even bother either with VoIP? The place VoIP shines is where data access is cheap and plentiful, and it isn’t either with Palm devices (or PocketPCs). Of course, WiFi is cheap and quick, but I would think that the vast majority of voice users need more mobility than what can be afforded by WiFi.

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On Wednesday, I reported that Vonage Canada filed a complaint with the Canadian Radio and Television Commission (CRTC) about broadband cable Internet access provider Shaw Communications‘ $10 Quality of Service Enhancement fee pitched to their subscribers as a voluntary plan to ensure quality of service for Vonage and other third-party content providers and services.

Vonage called the plan a “thinly veiled VoIP tax.”

Wednesday afternoon, Shaw Communications CEO Jim Shaw fired back, issuing a statement that says the fee was only a voluntary surcharge, and that Vonage’s complaint was tied in more with issues surrounding its planned Initial Public Offering.

After Shaw Communications put out their press release, Vonage Canada followed with a response- once again calling the fee a tax.

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

“Instead,” Parent added, “Shaw simploy regurgitated the vague information already posted on its website without offering its customers or Vonage Canada customers a clear explanation.”

The verbal joust continues. What’s more, this looks like a verbal joust that could turn into a legal one.

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As I posted last week, more than a few Vonage customers are suspicious that Comcast is crimping the quality of their voice calls. Vonage denies the charge, but the subject is still a red-hot issue on the Vonage Forum.

But now we have concrete proof of another strategy broadband cable is taking to discourage their customers from using competing services over that network.

In Canada, I see Shaw Communications has just instituted something called “Quality of Service Enhancement” for its broadband customers. Update: Shaw Communications has been doing this since May, 2005, but as I explain below, the fuss about this program is just starting to hit a fever pitch.

The deal is: you pay Shaw an extra $10 a month, and you get what the company calls “a qualityof service feature that will enhance (Internet telephony) services when used over the Shaw High Speed Internet network.”

This morning, Vonage Canada has issued a statment saying it has asked the Canadian Radio-Television & Telecommunications Commission (Canada’s counterpart to the FCC) to investigate.

More about that complaint in a moment, but first, it would be useful to explore just what this “Quality of Service Enhancement” offering is all about.

On Shaw’s site, the main page for this feature explains how Internet applications can trigger “intermittent bandwidth shortfalls.”

Third-party VoIP services are singled out for special treatment.

Shaw says:

With Internet telephony, voice data is 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.

Quality-of-service (QoS) issues that are unique to Internet packet networks are a major concern with providing Internet telephony service at acceptable performance levels. Delay is the big issue with voice-over-packet services that operate over the public Internet.

But if you stick with Shaw Digital Phone, well, then, you don’t have to pay the surcharge. According to Shaw:

Quality of service issues do not apply to Shaw Digital Phone because Shaw Digital Phone operates on its own separate, managed network. Voice traffic distributed along this network is never shared with public Internet networks, so you can be confident Shaw Digital Phone will deliver the service reliability and performance you expect. As an added safeguard, Shaw Digital Phone includes its own QoS Enhancement feature.

To say that Vonage is perturbed about this offering is putting it a bit mildly.

Vonage Canada says that in its request to the CRTC, they are requesting that the regulatory agency investigate the following issues:

- 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?

Make no mistake about it. Fee-happy, U.S.-based cable broadband ISPs will be watching this one real closely. If no net neutrality law is enacted, and Canadian telecom regulators allow Shaw to implement this “Quality of Service Enhancement” business model, it will become pervasive in the U.S. as well.

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Over the last couple of years, when I’ve wanted to take the temperature of the Vonage user community, I’ve often stopped at the Vonage Forum. This is a privately run enterprise, totally independent of Vonage. More than 23,000 people have joined the Forum since it was officially launched three years ago this month.

Anyhow, I have been noticing a growing number of posts in which many Vonage users and Vonage Forum Members have been complaining about the quality of Vonage calls over Comcast broadband connections.

It’s interesting that there are relatively few similar complaints about the quality of these Vonage calls over other broadband provider networks. Occasionally you’ll read about Verizon or AT&T complaints, but rarely.

But something has happened. Two weeks ago, a Vonage Forum Member named rdstoll began a Vonage Forum thread called Comcast vs. Vonage. The last time I checked, this thread had 116 posts and nearly 7,000 page views. That’s an exceptionally high number.

Although you will see all manner of opinions on this thread, there seems to be a sentiment that - politely put - Comcast could really be doing a better job of carrying Vonage bits.

There’s not much of a leap from that belief to one, expressed by some Vonage Forum Members, that the connection quality problems they are having over their Comcast lines just might not be coincidental. What’s also important to recognize is that many of these complaints are from Vonage users and Forum Members who have been around for awhile, and are more used to giving problem-solving advice in the Forum then venting about it.

“I am no believer in conspiracies, but having seen two episodes of Vonage issues tied directly to ‘work’ being done at Comcast, I cannot help but wonder what Comcast is up to,” rdstoll wrote in his thread-launching post. “Have absolutely no faith in baby bells or cable companies, and would not be surprised if they weren’t tinkering with some things to piss off Vonage users.”

“Well, Comcast is doing their own VoIP service in some areas now…. considering they have a competing product at a higher price…. well, you can be the judge on it,” a Forum Member named VonageTPA adds.

“I certainly hope that your conspiracy theory belongs on a bad episode of the ‘X-Files’, but sadly it’s not outside the realm of possibility,” writes NateHoy, who has been chosen “Vonage Forum Member of the Week at least twice by Forum founder and admin Dan Connor.

“VoIP from ‘independents’ like Vonage is a threat to the ISP industry because they are ‘yet another bandwidth hog’ making flat rate Internet access harder to provide due to increasing bandwidth demands,” NateHoy adds. “They are also a threat to the local telcos as they are direct competitors.

“Unfortunately, VoIP depends on ISP’s for bandwidth so our lines work, and on local telcos for access to their local bridges to hop onto the POTS network so we can talk to mere (mortals),” he writes.

It’s in the last graf of his post that NateHoy implies that all may not be on the up and up:

“And a little intentional ‘oopsie’ goes a long way toward discrediting VoIP…”

Are these complaints scapegoating by Vonage users, or is there something here? TalkBack and let us know!

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In recent hours, Slashdot users have been commenting a lot on yesterday’s post in which is referred to an atmosphere of distrust some Vonage users have been directing toward Comcast. I first noticed this in a Vonage Forum thread I linked to. That thread, “Comcast vs. Vonage,” has just passed 10,000 page views.

Now, there’s a Slashdot thread linking to ours. The thread is called Comcast Accused of Blocking VoIP.

Posts run the gamut, but there’s one that really grabbed me. I was especially seized by it because the proportion of libertarian-minded thought on Slashdot is way out of proportion to the popularity of libertarian thinking in the general electorate.

The post I am referring to was composed by Slashdot reader bigpat.

He chooses to comment on an earlier post that said in part: “All these ideas are entirely possible but it could simply be that Comcast doesn’t provide the kind of broadband consistently necessary to use VoIP.”

Here’s what bigpat writes:

Well, there is an easy test. If their VOIP works fine and other people’s don’t then they are probably gumming up the lines with QoS. ISPs have been working on different levels of service for differently labeled packet s of data for a while now and I think it should be clear to everyone that QoS really stands for “pick your pocket”, not “quality of service”. Quality of Service is fine when companies like Comcast don’t have local monopolies or don’t collude with their only other competitor… potentially that would be Verizon in my area, in order to fix service offerings.

I am libertarian, but QoS (or whatever they want to relabel it as) is an area which needs regulation. Make them simple regulations, make them so that they promote competition. Unfortunately maybe the only way to do this is to prevent ISPs from offering any add on services at all, other than basic bandwidth, addressibility and letting them charge flat published and competitive rates for QoS which get charged directly to the customer and aren’t a part of secret deals. Otherwise it will be nearly impossible to prevent them from deciding which services succeed and which ones fail if they control the playing field, the referees and have their players in the game all at the same time. If gone unchecked, they could prevent other companies and other services from being provided to their customers, literally, at the flip of a switch.

Now for a typical Slashdot libertarian to call for QoS regulation- indeed any regulation - that’s like a religious conservative all of a sudden coming out as a Wiccan.

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