Vonage Loses In Court Add Up To Short Term Loss, Possible Long Term Gain

Rich Tehrani's post about Vonage's recent court defeat against Verizon and other telcos made me think back to my very first day of class at Temple University. It was Econ 1 with the late Professor McKenna.

He explained in his very first lecture to us what the bases of economics were in two phrases.

"Short Term Loss...Long Term Gain"

"Fast nickel or slow dime"

I think Vonage is playing those games now, versus their initial efforts of Short term gain and fast nickels. Their current 240 million dollar payouts to the telcos are their way of signaling Wall Street they have plans to stay in the game. Since these payments basically wipe out any chance of an operating profit this year, one will have to watch the balance sheet and accounting games that get played to show how the fines are now amortized over the prior year's costs, in the form of licensing expenses. The penalties will be a legal expense, and the books will appear better.....

Noted--Ike Elliott has some additional thoughts on the matter too.