Verizon Sues Time Warner Cable Over Ads
Telco Alleges Cabler Makes False Claims About FiOS Service
By Todd Spangler -- Multichannel News, 4/10/2008 12:21:00 AM
Verizon Communications filed a federal lawsuit Wednesday against Time Warner Cable, alleging the cable operator’s TV ads make “blatantly false” statements about its FiOS services in an attempt to dissuade customers from switching.
Verizon -- which is seeking a temporary restraining order to stop Time Warner Cable from running the ads -- said the Time Warner Cable ads falsely assert that Verizon's FiOS TV service requires a satellite dish; that the phone company was later to adopt fiber-optic networking technology; and that Time Warner Cable's fiber-optic network is superior.
“These blatantly false assertions could not be more devastating to Verizon’s $23 billion investment to compete with Time Warner and other cable companies on the provision of the triple-play service to consumers,” Verizon said in its request for a preliminary injunction.
“Television service is obviously the traditional strength of the cable companies, and Verizon’s ability to provide television service through the FiOS network is essential to Verizon’s ability to compete with Time Warner for [the] all-important ‘triple play’ of television, Internet, and telephone services,” Verizon said. “It is especially because of the extraordinary impact of these false assertions that Verizon seeks the extraordinary relief of a temporary restraining order.”
Time Warner Cable spokesman Alex Dudley said in a statement, "We feel the lawsuit is without merit and we look forward to defending against it in the appropriate venue."
Verizon filed the suit in the U.S. District Court for the Southern District of New York. The telco seeks unspecified monetary damages, an injunction barring Time Warner Cable from running the ads and an order requiring the cable company to run ads retracting the claims.
The main spot Verizon disputes is Time Warner Cable’s 60-second commercial in which a door-to-door Verizon sales rep rings the doorbell of a Time Warner Cable customer and says, “Good morning. Have you heard about the fiber?” as he waves his hands and beams of light stream from his fingers.
The customer tells the Verizon rep Time Warner Cable has “been using fiber optics for over a decade. Welcome to the program!” and asks, “Just to get TV from you now, don’t I need a satellite dish?”
A second 30-second spot omits the satellite dish reference but includes the line about Time Warner using fiber optics for more than a decade.
Verizon alleges that Time Warner Cable is deliberately trying to confuse FiOS -- which provides TV, Internet and voice over a fiber-to-the-home connection -- with the telco’s “synthetic bundle” comprised of DirecTV, phone and DSL Internet service.
Verizon said FiOS is available to more than 2 million households in the New York market, and offers the DirecTV/DSL/phone bundle only in areas where it has not built out the fiber-to-the-home network.
“The consumer in the advertisement represents someone who is able to purchase FiOS,” Verizon said in its request for a preliminary injunction. “The commercial’s Verizon salesman is there to tell him about (and sell him) the FiOS product. And the consumer’s skepticism is not directed to Verizon in general, but specifically to Verizon’s ‘fiber’ product – i.e., FiOS.”
As for Time Warner Cable’s fiber-optic claims, Verizon says it has used fiber optics in parts of its networks since the 1970s.
And Verizon claims that a fiber-to-the-home network is “undeniably superior” to cable:
Using the increased video and data bandwidth of fiber – rather than coaxial cable – to carry signals allows more data to get to and from the home faster, decreases the chance that the signal will be disrupted, reduces the picture freezing, pixilation, dropped packets of data, and other interruptions in service and quality associated with coaxial cable, and provides a more durable conduit that is more resistant to corrosion.
Many cable operators -- including Comcast, Cablevision Systems and Cox Communications -- have tried to blunt Verizon’s FiOS marketing message by pointing out they have used fiber-optic networks to deliver services for years.
According to Verizon's lawsuit, Time Warner Cable has run the “satellite dish” commercial more than 160 times since March 3 on six of the major broadcast channels in the New York market, including WABC, WNBC and WCBS.
In addition, Time Warner has aired the commercials numerous times on several of its own cable television channels and plays them on its Web site for the New York/New Jersey region.
Verizon said it first learned of Time Warner Cable’s satellite dish commercial on March 31, and sent a “cease and desist” letter the next day demanding that Time Warner Cable discontinue the spot.
According to Verizon, Time Warner Cable responded by rejecting the assertion that the commercial is false or misleading -- and told the telco it intended to continue running the commercial.
The case is docket 08-cv-03468 in the U.S. District Court for the Southern District of New York, with Judge Lewis A. Kaplan presiding.
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Talk about the pot calling the kettle black. Its Verizon who should be sued for their incessant fios commercials. As a matter of fact, Ive called cablevision asking them to pull all fios commercials off the air. This is the same big bad pots company that wanted to have voip rates increased and one of the companies being sued for wiretapping us. Their fios commercials are misleading because in no way, shape or form is fios internet better than cable. I get 30mbps cable and verizon cant match that. Even if they could, I have serious ethical and privacy issues with them. Anyone interested in democracy should NEVER choose Verizon.
alex reynolds - 4/29/2008 10:52:00 PM EDT -
James C: I think you are being a bit harsh with Verizon in this matter. I can't think of any rationale for Time-Warner's choice of words in their ad but to confuse and mislead the consumer. On the other hand, Verizon's claim of "no compression" rather than the more accurate statement of "no additional compression added by us" can easily be attributed to an effort to keep it simple for Joe Sixpack. Confronted with something like the second description, the average non technical person will react with confusion at best, and suspicion at worst. The only surefire way to simply a sentence for the average person is to leave out all the modifiers. They are going to do it for you, anyway, and if they have to do it they are going to hold a grudge about it. Unfortunately, when you leave out all of the "ifs, ands, and buts" in a technical statement you leave yourself wide open for unfriendly parties to come along and claim that they were left out through incompetence or dishonesty, rather than an effort to get through to the many people with poor English comprehension.
Bob H - 4/10/2008 7:48:00 PM EDT -
1. the "uncompressed" HD claim by VZ FiOS is actually false, perhaps we will see Time Warner countersue for false advertising.
2. FiOS uses the same coax inside the home that cable does, therefore has the same constraints. To offer 150 HDs Verizon will need to do SDV as well. Otherwise why hasn''t FiOS added the 90+ channels that D* offers?
James C. - 4/10/2008 2:06:00 PM EDT -
FTTH has nothing to do with "[producing ] better picture quality." It''s about bandwidth capacity.
Cable''s present capacity is limited because the coaxial cable running off the fiber node to the tap & onto the consumer''s cable box is presently fille to capacity. To deliver the increasing number of HD channels, cable has several options. One is to compress the HD feed. Another is drop analog feeds to make room for more HD channels. Another is to emply switched digital video, where basically the node acts as a remote tuner for the switched digital feeds.
In contrast, FiOS, being a complete fiber-optic network, has none of these constraints, & therefore, it if choose, can deliver as many HD feeds, uncompressed, as demanded by the marketplace.
Jay Cable - 4/10/2008 1:35:00 PM EDT -
Verizon claims that FTTH produces better picture quality are basically bunk. The big issue is compression as Multichannel has already written about.
James C. - 4/10/2008 11:19:00 AM EDT
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