Time Warner Cable and Cox Communications should stop describing their hybrid fiber-coax networks as "fiber optic networks" in their marketing, the National Advertising Division of the Council of Better Business Bureaus said Tuesday in response to challenges by Verizon Communications.
TWC "respectfully, but vehemently, disagrees with NAD's decision," the cable operator said in a statement, and is appealing the decision to the National Advertising Review Board. Cox, meanwhile, said it would take the NAD recommendations into consideration for future advertising.
Verizon had previously issued complaints against Comcast and Cablevision Systems over the use of "fiber optic network" in their advertising, and the NAD similarly recommended those MSOs discontinue the claims.
Comcast declined to cooperate with the NAD's inquiry in the case, which was referred to the Federal Trade Commission, while Cablevision said it would take the NAD's findings into consideration in future advertising.
The NAD, in its rulings regarding Cox and Time Warner Cable, said that "at least one reasonable interpretation" of the "fiber optic network" claims is that the cable operators offer services over a network that "solely consists of fiber optics and is the functional and/or technical equivalent of a telecommunications network where fiber does extend to the home, a claim which the evidence in the record did not support."
Verizon, which has invested some $23 billion in the FiOS fiber-to the-home network that passes more than 15 million homes in the U.S., applauded the NAD decisions.
"This ruling is great news for consumers, who've been misled for too long by Cox and Time Warner [Cable]'s false and deliberately misleading ads," Verizon spokesman Jim Smith said. "It's finally time for both Cox and Time Warner [Cable] to stop claiming that their hybrid network is the same as Verizon's advanced, all-fiber network. It is not."
Among the claims at issue were that Time Warner Cable's "fiber-optic network delivers speeds up to 15 Megs for a dramatically faster online experience" and "Road Runner Turbo is zooming across the advanced fiber network." Cox's claims included that its digital cable is "delivered through our advanced Fiber Optic Network" and that Cox is "the New Face of Fiber."
Time Warner Cable did not agree that its fiber optic claims were out of bounds.
"Despite the undisputed fact that TWC's network is more than 90% fiber optic, NAD's decision seeks to stop TWC from making the true statement that it has a fiber optic network," the company said. "NAD's decision is unlimited and would go far beyond FiOS markets where there is no basis for a consumer to believe that TWC is offering a fiber to the home product. TWC would be prevented from referring to the benefits of its fiber optic network in markets in which its competitors, including Verizon, only offer DSL carried on copper wire all the way from its central offices. On these grounds and others which space limitations prevent us from including, TWC requests an appeal."
Regarding TWC's claim that 90% of its network is fiber optic, NAD said that depending on the context, "it may be misleading for an advertiser to describe its product/service by only calling out its predominant characteristic."
In addition, NAD noted, digital subscriber line (DSL) networks use fiber optics to a neighborhood node and then use twisted-pair copper wires from the node to the home -- however, the industry doesn't refer to DSL networks as "fiber optic networks."
For its part Cox said in a statement that it disagreed the NAD's "unsupported conclusion that consumers are likely to interpret Cox's statement that it delivers its services over an 'advanced fiber optic network' to mean that Cox offers its services over a network which solely consists of fiber optics."
The MSO continued, "Although Cox firmly believes that it provided a reasonable basis for describing its network as an 'advanced fiber optic network,' in the interest of supporting the self-regulatory process, Cox will take the NAD's recommendations into consideration in future advertising."