It's not easy being Verizon these days. First, these uppity grassroots organizations and large technology leaders have come out and fought your plan to break the internet. Then VOIP comes in and starts reminding people how terrible their basic phone service is. Obviously there is two things to do. Try and buy your plan to break the internet by funding grasstop organizations like HandsOff.org and sue your VOIP competitors. That way if you lose the net neutrality debate you can still keep Vonage and others off 'your pipes'.

This is Verizon's backup plan. Verizon would love to extort companies large and small for access to their DSL subscribers, but they really care about shutting down VOIP. VOIP fundamentally alters Verizon's bread and butter business model of selling over priced telephony because of their copper monopoly. If Verizon gets their way in Congress you can bet that Vonage, Skype, Gizmo, and every other VOIP application and company out there will be all but locked from Verizon's DSL subscribers. Just look at what's going on in Canada for a precedent.

But, Verizon is not content to merely battle in Congress. Congress can be influenced by public opinion. Verizon has taken the battle to the courts to try and shut Vonage down. The two sides are saying all the things that you would expect them to say. From the Washington Post:

Verizon charged that Vonage is infringing on at least seven of its patents regarding Internet phone service, a technology known as voice over Internet protocol, or VoIP. The patents include inventions related to gateway interfaces between a packet-switched and circuit-switched network, billing and fraud detection, call services such as call forwarding and voicemail and methods related to Wi-Fi handset use in a VoIP network, the lawsuit said.

What Verizon is claiming is that they own telephony and nobody, especially a competitor that doesn't need to over pay for copper access, can sell voice applications. This is an end run around net neutrality. There are three possible outcomes that Verizon would like to see.

1) Verizon wins the case on all counts and now owns voice. The AT&T Ma Bell monopoly would have nothing on Verizon.

2) Verizon loses, but forces upstart Vonage to spend themselves out of business. Simply put, Verizon can fight this case as long as they need to. Vonage, on the other hand, has come off a bad IPO and may not be able to fight this all the way.

3) Verizon and Vonage settle. This way Verizon gets a cut of every call someone makes on Vonage's system. It's free money for Verizon and will chill innovation.

Verizon can't compete in the marketplace so they decided to take the marketplace out of the equation.