IP Convergence: Beyond VoIP, Beyond Cost Savings

As the convergence of media, computers, and telecommunications continues, it is not surprising to see an increase in lawsuits over intellectual property.  Today, Viacom sued Google and YouTube for copyright infringement.  The other day Vonage was ordered to pay $58 million for infringing various VoIP patents held by Verizon.  Before that Cisco sued Apple over the iPhone.  Last year Research in Motion (maker of Blackberry) agreed to pay $612 million to settle patent claims made by NTP. 

Unfortunately, I think these intellectual property disputes are going to be the new interconnection battles of the converged era.  Because IP has succeeded in becoming a universal protocol, and there is no dominant network provider (yet), issues of interconnection are far less contentious in the Internet space.  Parties are finding marketplace solutions to their interconnection requirements. 

So what do you do if you want to get a leg up on the competition?  Well, you claim ownership of a key technology as NTP and Verizon did or you claim ownership of popular content as Viacom is doing.  Is there really any difference between Verizon denying Vonage interconnection or Verizon denying Vonage use of a technology critical to its service?  The effect is the same – Vonage has to pay Verizon or cease offering service.  Similarly with Viacom, they may not be able to block people from accessing YouTube, but they can block the content that makes YouTube a desirable address on the web.   And cable television companies have long been accused of leveraging their ownership of content to the detriment of competitors (even if those competitors are incumbents like Verizon).

In the telecommunications industry, interconnection disputes were historically resolved by regulators. Some would argue this did not work very well and should not be duplicated going forward.  In the media industry,  intellectual property disputes were historically resolved by the courts.    Some of course argue that the current intellectual property laws are flawed and should be changed.

In the computing industry, an open-source movement has arisen to challenge the historical intellectual property model and on the Internet a “creative commons” has developed to challenge the historical copyright model.  In the telecommunications industry, efforts at peering come closest to mirroring the efforts in computing and media to disrupt the dominant model.

With so much at stake, it would be easy to predict the outcome of this (the moneyed interests win), but the Internet has enabled a counter-force to rise up and mount a credible challenge to the status quo.  It will be interesting to see how this debate plays out, and I suspect one successful business plan on either side of the debate is going to make a huge difference in the outcome.