Vonage, AT&T Reach Settlement

Oh, what the hey. We’ve come this far with our Vonage coverage. To quit before the horse is beaten to complete obliteration wouldn’t be fair to the loyal and the fully-engaged among all of you out there in readership land.

So we proceed once more in relaying an update on the dispute between American VoIP provider Vonage and the telecom giant AT&T made public in October.

A settlement, reached in early November between the two entities, was finalized late last week.

This news caps more than one and a half years of legal turmoil for the once very promising VoIP upstart – which is now to be followed by a shaky future indeed. If Vonage can pull itself out of the depressive state it remains firmly fixed within today, it will prove to be a surprisingly turnaround, no doubt.

In previous posts, we’ve given grim prognostications as to the fate of the company, and though we consistently wish the small gems the very best in their journeys – particularly those who standup fairly solid business models – we simply can’t see a rosy outcome result from the story Vonage has charted since mid-2006.

Despite our near complete revulsion for the illogic employed at the point of patent issuance in modern times, it’s hard to imagine Vonage able to administer to the wounds inflicted by other (much larger) parties in the courtroom and divest itself of the scars quickly enough to rebound and make something of itself once more that could move investors to give it a second go. As we interpret the company’s vitals, what’s done is done, and it’s very likely that Vonage will be no longer sometime in 2008.

Of course, that doesn’t mean it will disappear entirely. Instead, it will presumably be taken off the public market, and perhaps acquired for a significant discount by a fortuitous conglomerate (whether in that order or vice versa, is really a minor issue) – one that perhaps could make use of the company’s customer base.

At the end of the day, Vonage – if it so happens to “go under” – will be remembered as an attractive alternative to the biggest of the business; an alternative that simply managed to become too big for competitors’ comfort. One could certainly argue economic reasons for its eventual demise, yet how it could have truly blossomed and grown whilst being battered about by giants is clear as day: It couldn’t have.