Money Matters, Simplified.
Verizon seeks declaratory judgment on 3G advertisement from court
by Jamie Anderson - July 28, 2009 - comments
New York, July 28: Verizon Wireless, joint venture of New York-based Verizon Communications Inc (NYSE: VZ) and Vodafone Group PLC (LSE: VOD, NYSE: VOD) of UK, has knocked the doors of a U.S. court, asking for a declaratory verdict that its advertising claims are true.
Verizon has, through its “Can you hear me now" ad campaign, claimed that the company’s service were most reliable. The campaign depicted network testers going to different places to test call reception.
Verizon Wireless claims of being "America's Most Reliable 3G Network" were challenged, on July 1, by rival AT&T as “misleading”. AT&T had filed the challenge with the National Advertising Division (NAD) of the Council for Better Business Bureaus.
Verizon retaliated by filing papers in a Manhattan district court asserting that the AT&T challenge could not be supported.
Basking Ridge, New Jersey based Verizon Wireless contended that its claims of having "America's Most Reliable 3G Network" and "America's Best 3G Network" and "America's Most Reliable Wireless Network" are "truthful, accurate and substantiated".
The moot point: speed
AT&T had contended that the network speed was a crucial factor in determining the quality of service for consumers. The network speed is definitely not Verizon’s forte.
"Data network speed is an essential factor to consumers when it comes to data transmission on their wireless devices. The 3G reliability claims made in ads by Verizon Wireless are false and misleading."
AT&T's claimed that Verizon devised a new formula for calculating 'reliability'. By applying the new concocted formula, Verizon proved that its 3G wireless network had greater 'reliability, asserted AT&T.
Verizon, in its filing stated that AT&T's challenge "relies on the incorrect premise that speed is an essential element of the standard for measuring network reliability".
"Verizon's claim that speed is not a relevant factor to a reliable 3G network is preposterous," AT&T spokesman Mark Siegel maintained.
So, essentially the moot point is whether speed and reliability are two distinct matters or not.
Verizon Wireless, post its acquisition of Alltel Corp. in January, toppled AT&T as the largest mobile phone carrier. AT&T however remains the exclusive U.S. carrier of the iPhone. AT&T added 1.4 million customers in the last quarter, whereas Verizon augmented 1.1 million subscribers in the same quarter.
The race for supremacy
Both AT&T and Verizon are bracing up for competition and updating their networks. Both intend to move towards the fourth-generation technology called long-term evolution (LTE).
In this aspect, Verizon appears to have taken the lead already. The company will offer LTE in some markets by mid-2010, whereas AT&T will venture into the LTE territory 2011.