IP Democracy: Time Warner Ads May Not Be Deceptive But Verizon's Ad Might Be

Verizon is stirring up the competitive waters by attacking ads from rival broadband, video and voice provider Time Warner Cable. The telco filed suit against Time Warner yesterday in New York claiming that this ad falsely implies that Time Warner embraced fiber before Verizon did and that consumers must have a satellite dish to receive Verizon's FiOS TV service.

Karl Bode at Broadband Reports warned Verizon today that it has no business calling Time Warner a liar when Verizon's own ads are deceptive.

I'm not sure how case law plays out when it comes to false advertising, but at first blush it looks like Verizon may be on shaky grounds with its complaint (and has given the Time Warner ad far more free play than it otherwise would have received) because Time Warner's implications are not, um, false.

In terms of Verizon's allegations that Time Warner wrongly states that it beat Verizon to the fiber punch...well, that's not exactly what the ad says. An actor in the ad says that Time Warner has "been using fiber optics for over a decade. Welcome to the program."

I know for a fact that Time Warner has been using fiber optics for over a decade. Indeed, most of the U.S. cable industry operates on a hybrid fiber-coax architecture and has for quite some time. Most cable systems push fiber all the way to "the pedestal," a neighborhood node.

Time Warner doesn't take fiber all the way to the home, a crucial distinction in Verizon's mind. The ad, though, doesn't say that Time Warner was ahead of the game in bringing fiber all the way to the home. Is the ad false or misleading? I don't think so. The sarcastic "welcome to the program" is merely slang for saying "duh," although it does seem to imply that Time Warner embraced fiber technology before Verizon did.

Verizon's complaint about the satellite dish prerequisite also doesn't hold water. On Verizon's Policy Blog, spokesman Eric Rabe says "Time Warner’s ad, on the other hand, asserts that you need a satellite dish to receive FiOS TV, and that is a blatant falsehood."

Well, no. I've watched the ad several times and never does the actor say a satellite dish is necessary to receive FiOS TV. He says "just to get TV from you now, don't I need a satellite dish?" This is in fact a true statement for at least 80% of the homes in Verizon's service territory.

At year-end 2007, Verizon made its fiber-based FiOS TV service available to 5.9 million homes (of which 943,000 subscribed). But the number of homes in Verizon's territory tops 21 million. So, 15 million homes can buy TV service from Verizon only if they get a satellite dish and receive service from DirecTV, Verizon's satellite TV partner.

As far as Verizon's own advertising is concerned, as Karl notes, this ad outright says that a CNET article called FIOS service "near flawless," which it didn't, really. The article in question actually stated "how important it is for Verizon to offer a near-flawless TV experience." There's a big difference between those two statements.

Verizon now says that it will stop citing the CNET article.

Posted by Cynthia Brumfield on April 10, 2008 10:27 PM to IP Democracy