Vonage blasts Shaw over VoIP ‘enhancement fee’

Vonage Canada on Tuesday went public with a complaint it has made to the CRTC about an enhancement fee rival Shaw Communications is encouraging customers to pay if they use other voice-over-IP services.

The $10 charge is optional, but Vonage and other independent providers are calling it a “VoIP tax” that runs counter to the tradition of Net neutrality that has made the Internet an effective communications medium. Shaw, meanwhile, says on its Web site that the fee is necessary because when its customers use third party VoIP services, it is sharing traffic with public networks, where voice frames can be lost much like data frames during peak loads.

“Without this ($10/month) service customers may encounter quality of service issues with their voice over Internet service,” the company’s site says. “Delay is the big issue with voice-over-packet services that operate over the public Internet. Quality of service issues do not apply to Shaw Digital Phone because Shaw Digital Phone operates on its own separate, managed network.”

Vonage, however, disputes this reasoning, and is asking the CRTC to force Shaw to explain its enhancement fee in more detail. In particular, Vonage wants to know why Shaw would charge the fee on a recurring basis if it consists of a one-time configuration of the Shaw-approved cable modem used by Shaw’s high-speed Internet customers, and what exactly is included in the enhancement service.

Joe Parent, Vonage Canada’s vice-president of marketing, said the company tried to deal with Shaw directly, including conversations with its customer service operation about the nature of the enhancement fee.

“They were very ambiguous,” he said, adding that there is no technical reason he is aware of that would justify the fee. “Shaw has a world-class network that’s capable of carrying this traffic.”

Shaw did not respond to a request for comment at press time. 

Vonage first made its submission to the CRTC late last year, where it called the enhancement fee a scheme to drive up the cost of competing voice services.

“If the type of action represented by Shaw’s QoS Service is not seriously investigated and addressed by the Commission, there will be a heightened risk of the development of a duopoly of local voice services, restricted to ILECs and cable carriers who provide Internet access over their last-mile facilities and therefore can provide managed services,” the submission said.

VoIP analyst Jon Arnold said Vonage’s complaint could be a sign of the increased pressure it faces in the more competitive VoIP market, particularly as it prepares for an IPO.

“They’re not in the position of strength they were a year ago when the cablecos came into the market,” he said, adding that it is hard to determine Vonage’s presence in Canada because, like Primus, it doesn’t disclose subscriber numbers.

“Either this is a lot of bluster to make them sound like more of a market force than they really are, or maybe they really are (a market force).”

Vonage is not the only firm to complain about Shaw’s enhancement fee. At the Canadian Telecom Summit last year, Primus Communications vice-president Matt Stein lambasted Shaw for the service fee, and claimed the company was not responsive to actual service problems.

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