Comcast was Number One in VoIP subscriber growth for calendar year 2006, outselling Vonage two-to-one. VoIP popularity is rising (note Digium, the company backing the VoIP open-source software Asterisk, and their new PBX replacement). But with the impending demise of cut-rate SunRocket on August 5th, Vonage has become awfully nervous… so like any sensible business, it fights back. An improved incentive plan gives you and the new customer you refer a $50 AMEX gift card, and it adds a two month free ride for your service as well. That’s a $150 marginal cost (overhead cost undermined) to pick up one typical residential customer. Its Refer-A-Friend has a tracking system which almost turns current customers into multi-level marketers. Vonage also offers SunRocket customers an incentive to switch, and it added a cheery e-newsletter to subscribers, showing how other Vonage users solve problems.

Why? Comcast’s leverage; bundled discounts and packet shaping. Comcast subscribers get an introductory discount on digital cable, plus DVR, plus VOIP phone service, only if they order all three, and that leverage must have helped push SunRocket out of the nest. This method’s sure to be copied by other cable companies offering VoIP service. PBS columnist and Revenge of the Nerds author Robert X. Cringely explained how packet shaping and a lack of Net Neutrality allows ISPs to prioritize packets from their servers and de-prioritize packets from VOIP and other outside providers. That explains why our home Vonage service deteriorated when we tried Comcast for a while. Have you noticed VoIP quality shrink when moving to Comcast or other unregulated carriers from regulated DSL?