Vonage has announced their plans for CES and in the media advisory that went out today indicated that they’ll enable attendees to make free phone calls in 13 phone booths set up throughout the Las Vegas Convention Center (LVCC). Vonage is claiming the “distinction of being the first company to set up phone booths

at CES. The phone booths are co-sponsored by Texas Instruments Incorporated

(TI).”

If I recall Belkin and maybe Broadvoice did this exact type of promotional stunt at an Internet Telephony or VON conference some years in the past, but not with as many phone booths.

The more interesting point though hails from Vonage’s list of partner booths they will be swarming. It’s the lack of Linksys. Either it’s an oversight, an omission or maybe something has happened between the Irvine company and Vonage, which for months had been their leading ATA provider.

Could it be the new Linksys effort to market devices that enable VoIP more on their own? If I recall the SOHO/SMB product that Vonage in past briefings referred to was very much like the Linksys announced effort. Vonage had said that through VARs a similar, if not identical product would be their market entry vehicle via VARs? So that begs the question of the relationship has soured to the point of where Vonage and Linksys are no longer pals? CES tends to be the show where new happens in consumer electronics, and certainly when it comes to consumer tech products like TA’s and such, Linksys has been a formidable presence the last few years. It makes one wonder, doesn’t it.

At the time of posting neither Vonage or Linksys press representative were available for comment.

All telephone calls and television service eventually will be carried over the Internet, Microsoft Corp.’s chief executive said yesterday.
“We can debate when, but all TV will transition to be over the Internet,” Steven Ballmer said during a speech to government contractors. “And, frankly, all voice calls will transition to be over Internet technologies.”
Voice over Internet Protocol (VoIP) carries phone calls over Internet lines. Internet Protocol TV (IPTV) offers enhanced video-on-demand features and the ability to view programs originating from anywhere in the world via broadband data pipes.
“Both phenomenon are guaranteed to happen,” Mr. Ballmer said.
VoIP is being used by millions of Americans, but IPTV isn’t ready for widespread adoption, analysts said.
VoIP service works with both digital subscriber lines and cable-modem broadband connections. It allows subscribers to call anywhere worldwide for less than traditional land-line phone services and offers numerous add-on features from voice mail to online call logs.
But VoIP’s real power is letting users “describe a set of rules for how you get interrupted,” Mr. Ballmer said.
For example, a call from his wife’s phone number will always be put through, while his son may have to hit a button to indicate that it’s important and not just another request for the latest Microsoft gadget. His broker would not get through after trading hours.
VoIP shortfalls include limited access to Enhanced 911 services that can pinpoint a caller’s location and no phone service if the power or Internet connection is out. Numerous VoIP providers failed to meet a Nov. 28 Federal Communications Commission (FCC) deadline to offer E911 to all subscribers. The FCC also said the companies must stop marketing in areas where they can’t offer the service.
Research firms estimate there could be more than 20 million VoIP subscriptions in the U.S. by 2010, bolstering Mr. Ballmer’s assertion, but the future of IPTV is less clear.
IPTV will increase the proportion of video delivered over the backbone of the Internet, but it will not replace cable and satellite TV providers who are ramping their video-on-demand features, said Laura Behrens, a media industry analyst at Gartner Inc.
From a business and financial standpoint, IPTV will look like cable TV service in its early stages, and providers such as Verizon and AT&T Inc. will have to convince consumers that IPTV is more attractive than their cable or satellite offerings, Ms. Behrens said.

Mr. Ballmer said IPTV will resonate with U.S. viewers because of the enhanced services it offers. For example, IPTV enables viewers to search for a video on the Internet using a TV remote and to watch as soon as it is found, avoiding the need to download and view it on a computer.
But early IPTV deployments, expected as early as next year, likely will be a disappointment because of the wrong mix of products, marketing and technical capabilities, Ms. Behrens said. How badly that start goes will determine how quickly IPTV takes hold in the U.S., where both Verizon and AT&T have announced plans to offer the service in millions of major metropolitan area homes within two years.
IPTV also requires a substantial amount of bandwidth to work properly, and content providers are worried about piracy over the Web, said Rob Enderle, an analyst at the Enderle Group, a technology consulting firm in San Jose, Calif.
Hong Kong has the most IPTV users in the world, recently surpassing 500,000 subscribers, so American providers aiming for 20 percent market penetration within five years will be a “tall order,” Ms. Behrens said.
In addition to Microsoft, which has numerous partners making TV set-top boxes supporting its IPTV software, Google Inc. is expected to increase its Internet Protocol offerings next year, as are other hardware and high-speed access providers, Mr. Enderle said.

U.K. carrier will use VoIP leader’s weapons to undercut the upstart: price and simplicity.

It had to happen, but to date, the backlash from traditional telecommunications carriers over the proliferation of VoIP application providers piggy-backing on their networks and competing with them has been very low-key.

But “Operation Backlash” may have begun in London with BT Group’s announcement that it is slashing its prices for voice services in half and offering free calls to 30 different countries during the holiday season.

In a surprising move, BT, the largest carrier in the United Kingdom, mentioned Skype by name in its announcement. The company said that international calls made from PCs to regular telephones are already cheaper with its BT Communicator than “with rivals such as Skype.”

To further drive home the point that the carrier is targeting Skype and other similar services, BT said it will introduce an enhanced voice over Internet offering in the spring that will be available globally and feature its enhanced sound quality.

The carrier also said it will launch its new video phones next spring, which will allow its broadband users to see each other during their conversations.

The announcement clearly targets some of the same customers targeted by Skype in its announced video-calling enhancements in its latest version of its popular software (see Skype Debuts Video Phone).

Shares of BT were up $0.34 to $38.27 in recent trading, while shares of Skype’s parent company eBay were down $0.14 to $43.33.

Unleashing the VoIP Tiger

To date, traditional carriers have offered VoIP services but have not marketed them very heavily for fear, some say, that the cheaper services will cannibalize the carrier’s higher-end and more expensive traditional calling packages.

But with this announcement, BT seems to have unleashed the tiger that the traditional carriers can use to compete against rival services such as Skype.

In the United States, there have been rumblings and statements of concern among major carriers about the emergence of services such as Skype’s, but except for a statement to that effect from AT&T CEO Edward Whitacre, most of the upset has centered on background.

A few weeks ago Mr. Whitacre complained in an article in BusinessWeek about the unfairness of traditional carriers subsidizing their competition. He suggested that companies such as Skype should pay for the portion of the carriers’ networks that they use.

The statement attracted a maelstrom of criticism, some of it highly personal. Since then the discussion of whether VoIP software providers such as Skype should be charged for the network bandwidth consumed by their software has subsided.

But BT’s announcement opens a new front in the war between traditional carriers and VoIP service providers. The carrier is fighting an open battle with Skype using Skype’s weapons: pricing and ease of use. And the carrier promises there is more to come.

In September, Skype reached a deal to be purchased by eBay for up to $4.1 billion.