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| | 09/30/2005
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| | Briefly noted: How revisionist history works: One engineer went around Motorola execs after RAZR was rejected, yes rejected, and brought it back for consideration a second time; the games RCN is playing to trap its customers, ChicWIT, and ProAlliance, by Ron May
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| | Briefly noted: How revisionist history works: One engineer went around Motorola execs after RAZR was rejected, yes rejected, and brought it back for consideration a second time; the games RCN is playing to trap its customers, ChicWIT, and ProAlliance, by Ron May
* I have three stories other than Springboard to give you, so let me get those out at a reasonably early hour [hey, it is now 4:20pm, too late for that] and that gives me most of the rest of the day to do Springboard. There is a hard deadline of 5pm Friday since all day Saturday we have TiECON. One of my stories today is very relevant to TiECON since the keynote speaker is Ed Zander, Motorola's CEO. Yes, I am feeling time pressure. All of Sunday will undoubtedly be dedicated to writing up TiECON and Springboard had quite a few excellent presentations that are well worth going over in detail, not to mention all the little things I picked up.
David Dailey has moved to Boston and he is still with SVB. He's been promoted to credit manager. This took place about two months ago, according to a woman from SVB that I talked to.
Chris Tynan is running his own energy company which provides things like solar and turbines.
Much more along these lines. The CMNC is not dead, Nik Rokop says. They held a board meeting two weeks ago and got 13 attendees. Nik says that they will focus on events, a polite way of apologizing for all the other extraneous stuff he lead them to do with the US-Israel project, and they are adding some new board members and dropping a few others. Keith Karasak gave me some info. on what is going on at Arryx, but then he called me and asked that we sit donw on Wednesday to get the big picture. It could be a stalling tactic to keep me from writing what he told me which was no big deal anyway, but I will take him at his word --- I will get more info. here for you by playing ball.
* Now, I know that Adarsh Arora is not allowing direct questioning of Zander and that questions must be submitted in writing and Adarsh will decide what gets asked. But I am going to make a case for my question to be included in some form. I talked to him about noon and it is unlikely that my question will be asked and other questions about Motorola will also probably not be asked because Adarsh wants to have the focus on entrepreneurship. I believe that they had one panelist cancellation and they are still getting calls every day from people who want to attend --- one call today from Paris, France, no less! I am prepared to be utterly exhausted by 8pm tomorrow night, but much more knowledgeable.
* The MIT-EF has snared Jim O'Connor who is like the Flip of Motorola. Flip was trying to be an accelerator. Jim is a direct report to Padmasree Warrior, the CTO, and he is corporate VP. His role is bigger than his title, I am hearing. Jim's official title is VP of Technology Incubation and Commercialization. What that means is that Jim is the link between the research and innovation in the labs and the outside world. A company that spends $2.5B a year on R&D --- that's a big deal. They have 3,000 research scientists and engineers. The best innovations go through his organization which is called the Early Stage Accelerator. He is the Flip of Motorola. Flip was trying to accelerate the R&D. Jim does not do the R&D, he harvests it and he takes the best ideas to market.
The MIT-EF is now sending out a newsletter to members. The first one they sent, though, the links did not work. But they fixed it and sent it again. I have now gotten three copies of this letter, but it was very nicely done. I believe that Sheryl Kravitz is the new marketing chair and she is a pistol from what I hear. They appear to also be bringing on Hostway to help out. Hostway is now listed as a sponsor of some sort.
One person who needs to be singled out for credit is Tom MacTavish of Motorola. He has been a big supporter of the MIT-EF within Motorola and I believe that he is responsible for bringing in Jim Wicks. The originally scheduled speaker was Peter Pfanner.
* The encapsulation of the Motorola story is this: The development of the RAZR was done by ONE engineer and his team and it was initially REJECTED by Motorola executives, so the engineer went around the company ON HIS OWN and used an ODE (Outsourced Design and Engineering) firm in Shen Zhen China (they generally used Benq, but for this he used his own resources) and then he came back with the design which he then pushed a second time.
That's the real story and all the talk now about how ingenious the company was, about how the RAZR was a part of some grand plan, about the two icons, about the processes in the firm that encourage innovation is revisionist history -- and I might add revisionist credit-taking -- and an attempt by Motorola to take an entirely unexpected success --- they had initially expected to sell only 2 million units of RAZR --- and recast it as part of a grand scheme. The PEBL, also known as the "Bean" is Motorola's attempt to convince people that RAZR represents a transformation in how the firm works. Why was RAZR rejected initially by Motorola executives? My information is that it was rejected because it lacks functionality and features. It is strong on design, but weak on features. In design parlance, it was form over function, and that is antithetical to what Motorola has stood for over the last seventy five years.
Jim Wicks' argument in his talk was that Motorola is undergoing a cultural shift, but a 75 year old engineering firm that has always focused on the primacy of engineering does not turn around on a dime. Becoming the hip consumer products firm may be an ideal now, but it has not been the focus. It seems to me to be an afterthought, AFTER the success of the RAZR. Further evidence that the story Motorola is now telling is revisionist history is that Zander and others were not really talking up RAZR even a year or more ago. What is more, Motorola was considering selling off its entire handset business before RAZR came along. Which came first, cultural change or the RAZR? Which came first, the engineering with the thin chip or the design of thin? Which came first, consumer oriented products
Not one word about RAZR in any of Ed Zander's discussion with the analysts in July of 2004. Granted, RAZR was introduced in October 2004, but if this was going to be the mother of all icons, you would think that he would have at least hinted about it. In fact, back then the mantra was "seamless mobility" --- remember that gem? I focus on this because even the word "Icon" has only come into use very recently. I see not one reference to the term prior to the Wicks talk and the article quoting Roger Jellicoe, all on September 12th and 13th of this year, just two weeks ago!
Here is what Zander was saying in July of 2004: http://www.tmronline.com/A55951/tmrarticles.nsf/39918186ac76b68a8625692400787eb1/54ad1b7c75f1f79586256ee00080bbc0!OpenDocument&Highlight=0,Zander
And if PEBL does not sell big, will it be dumped as one of the two icons? It seems to me that the term "icon" is just another word for an item that sells.
As some background to the story, all the major handset manufacturers from Motorola to Siemens to Phillips outsource the design and development of cell phones to ODM and ODE (Original Design Manufacturers and Original Design and Enginnering)firms. These are often small companies, but not always. They are almost all in China, Taiwan and South Korea, but not much in Korea anymore because they got swept up by Samsung there. There are a few left in Europe but their activities have fallen off a lot. Everyone except Samsung and LG use these ODE and ODM firms. Flextronics and Benq are some of the bigger firms that Motorola and others outsource to. Benq will do the design of the handset and will manufacture it. If they use a smaller firm like Microcell, Microcell will do the design, but not the manufacturing.
Motorola would routinely visit these firms to keep them apprised of the product road map. They do it under NDA so that the companies can develop the technology to respond to bids for new products. Let's say Motorola wants push to talk, a color screen and an integrated digital video camera. They put that out for bid and they need the ODMs and ODEs to be able to act quickly. Motorola will give them a general idea where they are going, but won't be overly specific.
We all know that Motorola was not doing well until the RAZR arrived.
The RAZR never appeared on any product road map that Motorola was showing the ODMs and ODEs. No one at Motorola knew it was coming. That is my information, at any rate. There was one engineering team leader who came up with the idea of the RAZR. He showed it to the directors of the handset division. They said it was garbage because its functionality was limited.
Everyone at Motorola is now taking credit for the idea of form over function when it was really one guy and his team.
Benq is responsible for many Motorola handsets and they also design Dell laptops. The engineer, after getting the thumbs down by Motorola execs went on his own to another firm, a small one in Shen Zhen. He got the prototype made there without getting permission from the bigwigs at Motorola. The entire project was done after the bosses said to him, "Don't pursue this." That is my information. I don't have the name of the firm that did the prototype, but will try to find it out. There are forty such firms in that city which is really where the handset business is located.
My sources say that the culture at Motorola is entrenched and has not really changed. You have not seen articles that tell this side of the story. The PR campaign is highly controlled and orchestrated. Translation: it bears only passing resemblance to what actually happened.
My sources tell me the story of how a group of people in San Francisco were sitting around chuckling about how one guy, an engineer and his team came up with this and now everyone from Frost to others are taking credit.
Motorola was thinking of doing to its handset business what IBM did with its PC and Thinkpad business when it sold it to Lenovo. Folks, this is what this report does best. I do take a lot of PR driven info. but then I start to dig and start to get at the truth. It comes to me usually from sources that don't like the spin being foisted upon them.
The timeframe here probably goes back to early 2003. It takes a year and a half for the production cycle if you outsource. Also, notice they are now talking about a pink RAZR which is the answer to the black RAZR since the black RAZR is for men primarily and the PEBL, which is not selling well from what I hear, and a pink RAZR would sell more with women.
"The PEBL is their attempt to make it look like they knew what they were doing when they came out with the RAZR," one person told me. "Look at the brushed metal of the RAZR and look at the molded plastic of the PEBL --- its a completely different animal," he said.
* There were 160 people in and out of the ChicWIT meeting on Wednesday night. That meeting was up against a meeting of Company of Friends the same night. The event was the last time that Jeannie Walters will be running ChicWIT. She took over four years ago from Liz Ryan, whom I believe founded the local organization. Jeannie works with Vox, Inc. (www.voxinc.com) and they have been growing quite a bit. She decided to dedicate more time with her family and work. There is a very systematic interviewing process going on right now for a replacement.
I believe that there may be an interim person before they get a permanent replacement.
I was surprised to learn that ChicWIT has 10,000 people using its Listserv. They started with about 1,200 four years ago. All the threads on the Listserv are moderated. No message gets posted without being vetted first, Jeannie explained and Richard Landman was sitting there as well. We talked about one thread which addressed the question of whether women prefer male babysitters, or just how they feel about them. That thread went on a long time and people started repeating themselves. Jeannie wants the discussions to stay fresh and to not get boring. Also, she feels that they should stay away from politics, flame messages, and marketing messages.
But one thing about the ChicWIT listserv that differs from other listservs is that if your message is rejected, you get a note from the moderator explaining why and you also get told what the parameters are. Then you can change your message to fit the parameters if you wish.
The listserv can be accessed through www.worldwit.org
Jeannie said that ChicWIT was originally heavily populated by women in technology but now the membership has broadened significantly and only about 40% of the members are in tech. As I walked around the room, and I got there just before 8pm, so things were winding down, many of the women I talked to were in HR or real estate or marketing. My web lady, Jennifer Speaker, was there. Jen is an interesting person. She's a looker, first of all, but she was also maybe one of only two or three women computer science majors at UIUC. Her job history is interesting to say the least, but by far her most important job, and it is an unpaid position, has been the TMR website.
I would be up a certain creek without a paddle were it not for Jen because she does back everything up and then double back it up. The site is maintained at Prominic which is an ISP Jen likes and it's down in Champaign.
Harvey Daniels was there and he never misses the chance to talk to the women.
* I did get one story from the meeting that you may find interesting. There is an IT consulting firm that hires contractors, like Java developers, called ProAlliance. The firm is run by Brand Gangware. Mr. Gangware, my sources tell me, is $1.5MM in debt to various individuals whom he borrows money from. He has also not been paying his subcontractors. But Gangware apparently has no intention of paying his creditors back, even though they continue to try to get their money back. Gangware owes individuals in the range of $150K. My info is that he started off at Software Architects in the mid 1980s where he was a successful salesman, but he was pushed out (?) before 1990. He also worked at TM Floyd and since Pete Ashi is my brother's best friend, I may be able to get his take on Gangware.
OK, this afternoon I confirmed this story with one other person than my original source. Hey, that can be a way to finance your biz.
* My second major story is what is really going on with RCN and SBC in Chicago. The letters from Greg Mycio may be correct, but the issue is not VoIP. This is about your regular phone line.
Here is some background. We have the telco industry wars playing themselves out in the Chicago marketplace. SBC does not want their competitors to use their lines, however the law requires that they do, and that law is in flux at any given moment.
The phone companies are trying to move into the TV business. Verizon just launched FIOS, their cable TV service. They are doing this with Fiber To The Home (FTTH). Fios is FTTH and it terminates at a box close to the building or maybe even at the building. The TV goes over the coaxial cable and that box converts the phone service to the phone line and the coaxial cable becomes the TV. The TV goes over the coaxial cable that is probably already installed.
SBC is trying to bring fiber near the house and that is called FTTN (Fiber To The Neighborhood). The connection may be a block or a half block away. This war has been going on in the suburbs. These are more traditional phone lines that look like DSL. This method is cheaper than bringing the wire to the home. Fios just launched a small market in Texas.
Then you have the cable TV guys like RCN and Comcast who have a combination of fiber and coaxial. Coaxial is the cable wire. Technically, it means that there are two different conductors that share the same access. There is a thin wire in the center that is surrounded by an insulator.
It's a thick round wire. The cable companies are trying to deliver voice services over the cable wire which was initially employed for TV. They have already been deploying cable modem service. The cable modem is faster than T-1, but it is more of a shared environment which is one disadvantage.
The cable companies offer video and data services (data being the internet) and the phone companies widely offer phone and data services. Right now, the data is what they have in common. The war is right there at the nexus, with the data (or internet) where they intersect.
The phone guys are adding TV and the cable guys are adding phone. Now you will have a war on three fronts. They will fight now over the whole shebang: Voice, Video and Data.
They will have package wars, as they try to get a customer for all three at once rather than fighting three separate wars.
There was a court ruling or it could have been an FCC ruling that says that the cable companies do not have to share their wires, but the phone companies do. The reasoning for this is that while it may appear to put the phone companies at a disadvantage, the phone companies got their wires in the ground as a result of a monopoly that has been going on for a very long time. The phone companies'infrastructure has been paid off for a long time. The cable companies have a defacto monopoly. There are three providers in New York, but only two here: Comcast and RCN. Comcast originated with AT&T, then TCI, then Chicago Cable. Those wires, for the most, part, have been paid off, but Comcast has replaced many of them and Comcast has continued to make infrastructure investment to support digital cable. RCN also invested tons of money five or six years ago. They were 21st Century which was bought by RCN.
RCN decided that they would be a voice, video and data provider a long time ago. That was their whole mantra. They started doing cable modems a few years ago. They were using SBC's phone lines which was mandated by law or FCC or court ruling. RCN was what is called a CLEC. They were a cable company and a CLEC.
There is a separation between the network that goes to you and the services provided. An ISP can provide internet service over T-1, cable, DSL, dial-up, whatever. CLECs primarily provide voice services and they compete directly with the phone company. They can add data services. CLECs are more of a phone service.
Anybody can rent SBC lines. The rationale is that we don't want fifty people digging up the street to put their own lines. The argument is that others can therefor rent SBC lines. But SBC goes to Congress and to the state and argues that it has to have better prices. Other third parties can come in and rent SBC's lines.
So, here is what happened: Years ago, 21st Century which was renting SBC's lines decided that it can move their phone customers off of SBC's wires and put them on their cable. Then they can avoid paying SBC.
There were different technical standards a few years ago and the technology for doing that well has been developing over the last few years.
Here is where the story gets interesting. We have RCN and SBC at war. Comcast is not a part of this yet because they were never a CLEC trying to sign people up for phone service. Comcast was never renting SBC lines and they will launch phone service over cable but they will be doing it a new service from scratch over their cable lines.
If a customer of Comcast's decides to go with phone service, then they would be competing.
The difference is that RCN is directly trying to do a squeeze play, based on my information. The customer belongs entirely to RCN. That is an important point. RCN has its own phone switching equipment. That is important to know. RCN is renting wires from SBC and SBC is charging as much as they can for the wires. That is, of course, how SBC runs competitors out of the market.
That is how SBC ran the DSL guys out of the market.
At this point, based on the info. I have, it is not clear whether RCN is deliberately pulling a squeeze play to force its customers to stay with them or whether this is just a sign of bureaucratic bumbling. In other words, is the ten day notice on disconnection deliberate when they know that they have thirty days.
Here are the facts as I know them now. RCN has been sending out notices to 1,400 to 1,500 of its customers at a time in the form of a card that one could easily miss and take for an advertisement.
The advertisement sent out by RCN offers digital phone service, and at the bottom of the ad it says that they will disconnect you if you don't switch over.
So, it is not just an ad. It appears to be a threat. It appears that RCN is playing hardball and the reason is to lock their customers in.
Under the rules of number portability, customers are allowed to keep their number if they move from one phone service provider to another and that rule was more recently applied to cell phones as well. But as the WSJ reports today, the portability rule is not applicable to VoIP service.
Based on the information I have so far, RCN is playing hardball. Here is how it works.
They send out a notice of disconnection with a ten day notice. Now remember, RCN has its own phone switch, but it rents the lines from SBC. And of course, SBC charges a pretty penny for those lines. And that is how SBC ran the DSL providers out of the market over the years.
When you get the notice, you have three choices.
1. Let them disconnect you. In that case, RCN can immediately take your number and give it away to someone else.
2. Switch to RCN digital service and keep your number, as the ad says. But then you are locked in based on what the WSJ is saying.
3. Switch to another provider, say SBC. But here there is a catch and this is why the short notice being given by RCN is quite suspicious. There is a rule that says that your provider has thirty days to turn over your number if you switch. The original impetus behind this rule was the practice of slamming, if you recall. People were having their service providers changed without notice and it was suspected that the customer often did not ask for the service change.
The portability rule is designed to reduce the cost of switching, what an economist would call the transaction costs, and thereby encourage more competition. If every time you switch providers, you also have to change your number, the cost of switching becomes higher and the likelihood that people will switch becomes lower. That undermines competition.
The thirty day rule is intended to protect the consumer but it is being used here to pull a squeeze play on RCN's part. If RCN knows that it owns your number for thirty days, and yet gives you ten days to switch or convert over to digital phone service, aka VoIP, how is that ethical?
If you call RCN to disconnect with no provider in place to switch to, you lose you number for sure. But if you switch to SBC, let's say, and if SBC notifies RCN about it, RCN is legally not permitted to disconnect you. That rule exists to prevent punitive disconnections. But, as usual, there is a catch. RCN might go ahead and disconnect you anyway, even if you are switching, because they have not been notified of the switch in time and they can say that they notified you of the pending disconnection.
Let's say that when you get the RCN disconnect notice you decide to call SBC and switch over. It takes SBC at least 72 hours to get notification back from RCN that they have received the notice. In that time period, RCN could disconnect you.
The squeeze play is this: If you want to keep the same number and if you respond immediately to the RCN threat of a disconnect by switching right away to SBC, you are still facing a three week period without phone service. RCN does not have to turn it over for thirty days and the soonest that notice of the switch could be logged would probably be three days.
So, the purpose of the number portability rule was to give the customer maximum freedom and options. But RCN is using the 30 day rule to play games by sending the disconnect notification with just ten days to go.
That assuredly squeezes the customer. It is also my understanding that the reason RCN can hold your number for thirty days is that they have their own switch.
Once RCN has been notified of the switch-over they cannot disconnect you, supposedly. However, if you want to do the switch-over yourself, if for example, you say to RCN, that you want to switch to someone else and they have not received formal notification from the new provider, I believe that they can disconnect you.
Whether RCN actually will disconnect loyal customers or not is not known yet by me, but the very threat of it is rather disconcerting, wouldn't you agree.
I am not sure if you automatically lose your number portability if you get disconnected. If the disconnection comes because of a customer request, you definitely lose it. But if it is because of non-payment or because you failed to respond to the notice of disconnection in time and you can see how easy it would be to miss that notice, it is not clear to me if you lose number portability.
All of this amounts to a blatant attempt by RCN to keep their customers by violating the number portability rules, at least in spirit, and by possibly using the current policy that allows them to keep your VoIP number and not turn it over if you switch to their advantage in locking you in with them.
In short form, here is what they are saying. Switch over from regular phone service with us to digital in ten days or be disconnected. If you go somewhere else, endure three weeks or more without phone service until we turn over your number. If you stay with us and switch over to our digital service, we've got you and you are locked in.
What a great set of options, huh?
Now, RCN is not the only one playing games here. SBC is doing the same and whether it is intentional or just bureaucratic bungling is not clear. SBC also does not want a shopper, so they lie. They know that it will take thirty days, but they tell you it will take five days to get the order and make sure you don't go elsewhere. RCN is not cutting off digital phones, it is cutting off regular phone service.
And there is more. A switch over to RCN digital service requires what they call a truck roll, or a service call and the purchase of a device. You can't have both SBC lines and RCN lines at the same time, even if you are RCN's customer already, a guy from SBC must nonetheless come out and remove his wires. If he does not do that, SBC could fry the lines of RCN. There is a technical reason for this that I don't understand. There are two truck rolls required if you take the RCN deal to switch over to their digital and then switch to SBC in three weeks. But you can't do that based on the WSJ. Once you have switched, RCN has you locked in. Each truck roll runs between $100 and $150, and there is waiting time as well. It all amounts to an attempt to hamstring customers.
There are some holes, even big ones, in my information. First, RCN is telling their people in an internal memo that the reason they are doing the disconnect is that SBC is cutting them off --- no more line rentals. Is that true? I would think that this violates FCC rules and/or court rulings. What are the current and relevant FCC rulings, laws and court rulings governing the SBC line issue?
Second, is RCN doing this to reduce costs or to lock customers in? It is not clear to me but it would seem to be an effort to hamstring customers as opposed to an attempt to reduce the cost of renting SBC lines.
Third, is the use of the thirty day rule the reason that they only give ten days notice? That way, they discourage customers from switching because they may have to endure the high penalty of going three weeks without phone service.
One more thing: SBC will offer special promotional benefits to existing Chicago customers who switch from RCN as opposed to new customers in the area. That is also a way they can attract customers away from RCN. And my sources tell me that it is no longer possible to identify how much they save using RCN over SBC. That used to be the sales pitch, but it may not apply any longer.
These are games that fly below the radar because they are not being fought out in Washington, D.C. or Springfield. Few people know about this. You would not know if you were not one of those RCN customers who got the disconnect notice. I think that this is precisely the type of story that this report should be covering and bringing to light.
Here is the WSJ Online article about how VoIP customers can't take their numbers with them.
Some VOIP Customers Can't Take Their Numbers With Them
By ELLEN SHENG
September 29, 2005 2:26 p.m.
Of DOW JONES NEWSWIRES
NEW YORK -- Kirsten Dixson was proud to be an early adopter when she signed up her business for voice over Internet protocol phone service earlier this year.
She soon came to regret her tech savvy when bad sound quality made her long for traditional phone service. Then the other shoe dropped - she couldn't take her number with her to another provider.
As voice over IP gets more popular, VOIP providers are faced with a relatively new issue: how to handle customer turnover. There are no exact figures on how many customers have tried to switch their numbers out from VOIP providers, but the Federal Communications Commission says that a total of 41.7 million phone numbers got transferred last year, including land lines and cellular. The number of U.S. residential voice over IP customers increased by 750,000 in the second quarter to 2.44 million, according to Bernstein Research. That growth rate is expected to accelerate.
As it stands now, the FCC does not require voice over IP providers to follow number portability requirements the way wireless and incumbent wireline providers must. But that could soon change. The issue falls into something of a gray area, and legal experts disagree on whether or not the rulings apply to voice over IP providers.
"The issue is pending before the FCC, but if you look the way number portability has been addressed in the wireless context, it would be fair to say it should be extended to voice over IP," said Roz Allen, a partner in the government practice at the law firm Holland + Knight.
The issue has also caught the attention of both the House and Senate, which recently came out with legislative proposals that would give voice over IP users the same rights to number portability.
Part of the reason companies have lagged in offering number portability is because it's so tedious. To move a number, both companies - the one being dumped and the new provider - need to verify information and coordinate on a transfer date. Different providers require slightly different information and incomplete or slight inconsistencies in the fillouts - St. versus Street, for instance - can cause requests to be kicked back. Improvements have been made, but still more are needed.
To enable the process, phone carriers have had to invest millions on new software programs, developing new procedures and hiring additional personnel. Larger companies, such as Verizon Communications (VZ) or Comcast Corp. (CMCSA, CMCSK), have largely automated the process. But smaller companies don't have the same kind of resources to invest, which means that dealing with them means communicating by fax and phone.
"Many chose initially not to port numbers because of the complexities involved," said Dan Kokoruda, a program manager at consulting firm Business Edge who has worked with a number of carriers on business and technical issues from number portability. "It's a very onerous process," he added.
VOIP providers would do best to ensure that customers can transfer their numbers easily, said Kenneth DeGraff, policy analyst at Consumers Union. "Otherwise, they're inviting increased regulation on themselves."
VOIP Cos. Benefit From Phone Number Mobility
After some efforts, voice over IP companies started letting new customers use their existing phone numbers. It's been a good selling point: get a cheaper service and keep your old number. Vonage, the largest voice over IP provider with a customer base of one million, says that 66% of its new customers bring their numbers with them. CallVantage said a "substantial" number does so.
But defecting customers who want to take the number with them are another issue.
Voice over IP companies are becoming quite "good at receiving ported numbers. But because it's such a small and nascent market, companies are inexperienced at losing customers at this point and the processes are not ironed out as much," says Jan Dawson, research director at Ovum.
The result is that customers using voice over IP may or may not be able to take their numbers with them should they choose to change service. Even companies that allow departing customers to take numbers with them sometimes have restrictions or face difficulties.
Both Vonage and Verizon's Voicewing says it lets users transfer numbers both in and out to any provider, while AT&T's CallVantage lets users transfer numbers back to a traditional carrier, like BellSouth Corp. (BLS), but generally not to other voice over IP providers.
Broadvoice, the provider that Dixson used, lets users transfer out but says that numbers assigned by Broadvoice are sometimes unable to take that number with them. That was the reason for Dixson's unsuccessful number transfer.
"That's one of the challenges that everyone has .... we're trying to figure out how to make customers more aware of everything," said spokesman Gene Cornfield.
Cable companies also say customers can move numbers out, but unlike voice over IP providers, cable customers have to give up their numbers if they move to an area with a different area code, even if they stay with the same cable company.
Meanwhile, online message boards are full of complaints from users who met with troubles. For consumers, the issue is annoying enough, but for small business owners, changing a phone number can be expensive too. Dixson wasted $250 worth of business cards and suspects she may have lost some business as well.
Small business owners who use voice over IP, like Dixson, are still in the minority, but companies are courting this group with special packages and services. Vonage, for instance, says that 20% of its customer base is made up of small business owners. The company has a special small business plan that offers expanded voicemail services, an additional fax line and other features.
Voice over IP provides a welcome alternative for some consumers, but being among the first to use a new technology has its costs too. Says Dixson: "I'm an early adopter. And this is a case where it seems great, and I want it to work, but it's not there yet for businesses that spend all their time on the phone."
- Ellen Sheng; Dow Jones Newswires; 201-938-5863; ellen.sheng@dowjones.com
* And don't miss Jack --- Welch, that is. Call 1-888-592-1727 or register for SAP Business Forum '05 in Chicago on October 12.
http://www.sap-presents.com/cbf05/custom
* Because Tuesday is Rosh Hashana, I will have two reports on Monday, one on Springboard and one on TiECON and we are still working on Univa and a lot of other things. |
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