The National Advertising Division of the Council of Better Business Bureaus has referred Comcast's decision to not participate in the industry group's adjudication process involving the advertising claim that the company provides "fiber-optic network" services to the Federal Trade Commission for further review.
The NAD, acting on a challenge by Verizon Communications, had requested substantiation from Comcast for the advertising claim that it delivers services over a "fiber-optic network."
Verizon contends that Comcast, like virtually all cable companies, uses a hybrid fiber-coax (HFC) network rather than a pure fiber-to-the-home architecture as used by the telco's FiOS. Because Comcast uses coaxial cable to connect to subscribers' homes, the telco argues, Comcast cannot claim to employ a "fiber-optic network."
According to the NAD, Comcast declined to participate citing concerns that Verizon's counsel might have had access to the cable company's "confidential and proprietary information as per a written agreement relating to a multidistrict litigation unrelated to the instant NAD proceeding."
"In this instance, we believe there's a conflict between us and the legal counsel representing Verizon that cannot be resolved, which is why we chose to not participate in the NAD's process," said Comcast senior director of corporate communications Jenni Moyer.
Verizon and its lawyers "disagreed with this characterization," according to the NAD. Neither the NAD nor Comcast identified the litigation referenced.
The NAD's standard procedures dictate that when an advertiser declines to participate in the self-regulatory review the matter is referred to an appropriate governmental agency.
In a statement, Verizon said, "For years Comcast has confused consumers by making false claims that their network is all-fiber-optic like Verizon's. Their refusal to participate in a self-regulatory process is clearly part of their ongoing strategy of delay that allows them to continue making claims that have only one objective -- befuddling consumers. We welcome and eagerly await the FTC's review that we believe will result in Comcast's withdrawal of this false claim."
Verizon has taken issue with cable's use of "fiber optic" marketing claims before. For example, the telco sued Time Warner Cable last year over the MSO's ads claiming it has "been using fiber optics for over a decade," alleging they were intended to mislead customers about the FiOS.
In a statement, NAD said it appreciated "the sincerity and good faith of both parties" but was "disappointed" at Comcast's decision.
In a decision earlier this year regarding Cablevision Systems ads -- also protested by Verizon -- the NAD recommended that Cablevision's "most advanced fiber optic network" claim be discontinued but noted that the cable operator can characterize itself as an "advanced hybrid fiber optic network."