I completely share your views. Beyond Vonage, the risk that you highlight applies to all service providers that are moving into broadband services and content delivery such as video. To reuse your words "they are spending a whole lot of money and resources solving all kinds of difficult problems" such as scalable and reliable real-time delivery of a high bandwidth broadcast streams to their subscriber. But these subscribers may actually be looking for something different than what they already get and be better served with just-in-time delivery of on-demand content through a peer-to-peer network for a fraction of the cost.

A few examples of the kinds of things I refer to include that Compuserve was deploying their own X.25 network. They were building modem banks and gateways and all sorts of custom protocols.

At one point Compuserve was even designing their own modems.

In the mid-nineties they were frantically trying to replace all this proprietary legacy with IP over PPP and industry standards. But it was too late.

My point of course isn’t that things will go just like Compuserve for Vonage, but that history shows a company can appear overwhelmingly dominant, but still be displaced (and rather rapidly), not by a frontal assault, but by being out flanked.

Thanks,

JC