Sunday, May 6, 2007


This article shows the way that big businesses generally try to crush competitors by either buying them out or outpacing them with increases in technology. Vonage is a service that offers far less expensive service with its VOIP technology. Usually, using the internet to make phone calls costs only the price of whatever internet service provider is providing a user’s internet. However, services such as Skype have failed to gain widespread popularity because of the inconvenience and unfamiliarity most people have with making internet phone calls. Vonage has closed this gap by providing regular phone service that uses the internet to connect. Naturally, Verizon is and should be concerned with this. It represents a very serious threat to their profitable business. When I was in Costa Rica I met a man who was the proprietor of a bed and breakfast who used Vonage. He explained to me the main advantage of using Vonage—tax evasion. While many users merely use the service for less expensive calls, it is possible to set up “virtual numbers,” which are simply phone numbers in the area code of the user’s choice. So, for instance, this man was able to set up a credit card account and bill people in Florida at his “virtual charge machine.” This exempted him from paying higher tax rates in Costa Rica. Whether this is actually legal I am not sure. Certainly, if it is, the Costa Rican government is not advertising it as a suggested technique.


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