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Area Codes Become a Weapon in the Telecom War

By Tim Beyers - Apr 24, 2013 at 9:47PM

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Vonage lobbies to pry code assignments away from carriers.

If Vonage (VG -1.92%) has its way, the days of AT&T (T -0.14%), Verizon (VZ 0.80%), and their big-carrier peers controlling the way area codes are assigned are coming to an end.

The VoIP upstart is lobbying regulators to allow for sales of premium area codes such as 212 for Manhattan, 617 in Boston, or 213 in L.A., on the theory that some will pay up for access in the same way some pay up for custom license plates.

Business owners might also enjoy the option, especially home workers who pay for premium VoIP telephony from the likes of 8x8 (EGHT 6.43%), says Tim Beyers of Motley Fool Rule Breakers and Motley Fool Supernova in the following video.

Startups often invest in infrastructure gimmicks to help attract large, professional clients. Investing in a premium area code isn't much different. Vonage and its peers, meanwhile, get the benefit of upselling a service that previously had been off-limits. Everyone but the incumbent carriers win, Tim says.

Should Vonage be allowed to sell premium area codes? Please watch this short video to get Tim's full take, and then leave a comment to let us know which telecom stocks you like most right now.

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Stocks Mentioned

Vonage Holdings Corp. Stock Quote
Vonage Holdings Corp.
VG
$19.37 (-1.92%) $0.38
Verizon Communications Inc. Stock Quote
Verizon Communications Inc.
VZ
$51.40 (0.80%) $0.41
AT&T Inc. Stock Quote
AT&T Inc.
T
$21.29 (-0.14%) $0.03
8x8, Inc. Stock Quote
8x8, Inc.
EGHT
$7.45 (6.43%) $0.45

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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