Verizon Sues Cox

Verizon Communications Inc. (NYSE: VZ) is once again in the plaintiff's seat in a patent infringement case, this time going after Cox Communications Inc.

Verizon filed papers in Eastern District Court of Virginia on Jan. 11 alleging that Cox violated eight patents related to the technology used for completing IP voice calls. Four of the patents were included in Verizon's suit against Vonage Holdings Corp. (NYSE: VG) last year. (See Vonage Ordered to Pay $58M to Verizon.) Verizon was eventually awarded $120 million in damages in that case.

The suit against Cox raises the question of whether Verizon will go after other Cable MSOs in court as well. "They all adhere to the CableLabs PacketCable architecture," says Alan Breznick, senior analyst with Heavy Reading. "So conceivably they could."

What's not clear, though, is why Cox would be singled out over other cable operators.

"Cox is different in that they were the first cable operator to seriously get into voice," says Breznick. "But they were doing circuit-switched for a long time and are only now slowly converting people to VOIP. I'm not sure what they might be doing differently from a technical standpoint."

Verizon only competes with Cox in the Northern Virginia and Rhode Island areas, so it doesn't appear that it is suing it for competitive purposes. Comcast Corp. (Nasdaq: CMCSA, CMCSK) has a much bigger presence in the Northeast and has butted heads with Verizon before.

Like most incumbent phone carriers, Verizon has been losing its legacy fixed-line subscribers to a number of competitors, including wireless carriers, VOIP carriers, and cable MSOs. Cox has around 2.1 million IP voice subscribers, fewer than the approximately 2.4 million that Vonage had at the time of its lawsuit with Verizon.

Verizon and Cox could not be reached immediately for comment.

— Raymond McConville, Reporter, Light Reading