Verizon Sues Time Warner Cable over TV Commercials

Opening up another front in its broadening battle with cablecos for TV customers, Verizon Communications Inc. confirmed that it’s suing Time Warner Cable Inc., claiming the operator is using false and misleading statements in ads about the Verizon FiOS service.

The telco wants Time Warner to retract its previous claims as well as a restraining order to stop the cable giant from running the ads in question. Verizon is also seeking monetary damages. Time Warner said the suit is without merit and will fight it.

Sorting out what’s what claim-wise in what has become a tidal wave of video service ads on TV would seem to be far more than a daunting task, given the large number of operators taking part combined with the seemingly countless number of different ads.

“Verizon is suing Time Warner Cable, and so another chapter starts in the building battle between phone and cable television companies,” said Jeff Kagan, a longtime telecom industry analyst. “If a customer chooses one company for all services, and is happy, it will be very difficult for another company to win them back,” in reference to the high stakes of customer acquisition and retention in the bundled services era.

At issue are Time Warner ads that allegedly claim you need a satellite dish to get FiOS service, which is delivered over an fiber-to-the-home (FTTH) network. Verizon does, however, have a deal with DirecTV Inc. (http://www.directv.com) to offer services via satellite in areas not yet served or not planned to be served by the telco’s landline network.

Verizon is not the only telco that offers a satellite-based video services option. AT&T Inc.’s Homezone service includes both TV and Internet via a partnership with DISH Networks and is offered in areas the telco can’t cost effectively reach with its terrestrial network as well as areas it has not yet reached with its U-verse service.

“We will likely see more of these kinds of competitive challenges and responses over the next year or so as the companies all get a feel for what is ok to say in an ad, and what is not,” said Kagan.

It remains to be seen who, if anyone, will decide how far companies can go in video service ads. In the last several months telcos, cablecos and satellite-based operators have made an increasingly endless amount of claims with regard to current and planned HD capabilities, amount of HD channels and the volume of HD programming in far more than frequent TV ad campaigns.

The lawsuit is not the first off-the-playing-field action Verizon has taken with regard to winning TV customers from cablecos. Last month, the telco requested the FCC for help with video switching, asking it to mandate its archrival industry disconnect departing customers in a more effective manner. Verizon claims cable operators don’t take disconnect orders from new video providers, leaving it to the customer to deal direct with their cable operator to discontinue service.

The Verizon request stemmed from an earlier complaint against the telco by cable operators.

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