Cablevision Systems has agreed to clarify claims that it provides Internet speeds "3X faster than FiOS," based on the recommendation from an industry ad group acting on a complaint by Verizon Communications.
The latest fisticuffs between Cablevision and Verizon over broadband marketing claims highlights how critical speed claims have become in winning and retaining subscribers, at least in the concentrated New York metro area.
The National Advertising Division of the Council of Better Business Bureaus, in a decision Wednesday, recommended that Cablevision modify the "3X faster" claims to better disclose that the MSO is comparing its 50-Mbps service with FiOS's entry-level 15-Mbps tier.
Cablevision said in a statement that it continues "to believe that consumers reasonably understand that this ‘3X faster' claim refers to our download speeds versus Verizon's basic FiOS service tier. Nevertheless, as a supporter of industry self-regulation, we will take NAD's recommendation that we clarify the basis of comparison into account when crafting future advertising."
NAD determined that Cablevision was able to support the claim that Optimum Online delivers Internet speeds up to 50 Mbps for downloads and up to 8 Mbps for uploads.
"We are pleased the NAD recognized our Optimum Online Boost Plus high-speed Internet service delivers up to 50 Megabits per second (Mbps) downstream, which is three times as fast as basic FiOS at up to 15 Mbps downstream," Cablevision added.
The marketing battle between Cablevision and Verizon heated up in December, when the MSO sued Verizon over the telco's ads claiming that an FCC study released in August 2011 showed the cable operator delivered "59% or less" of advertised speeds during peak periods. Cablevision argued that more recent data from the agency showed the MSO had greatly improved its relative performance; the companies settled the litigation for undisclosed terms.
In its NAD complaint, Verizon argued that Cablevision's "3X" claim is literally false because Verizon FiOS offers Internet download speeds of up to 150 Mbps and upload speeds of up to 35 Mbps both as standalone service and as part of a triple-play bundle. In addition, Verizon has said Cablevision's comparison to the FiOS Internet entry-level 15/5 Mbps package "fails to tell the broader story" because the telco's flagship offerings in the New York market are 25/25, 35/35 and 50/20 Mbps.
NAD determined that the Cablevision's fine-print disclosure that the "3X Faster Than FiOS" claim was based on a comparison with the 15-Mbps FiOS service was insufficient to justify the implication that the MSO's service is three times faster than "FiOS" per se.
"While it is true that NAD considers challenged claims in the context of industry practices and the marketplace, advertisers cannot require consumers to recall advertisements of competitors in order to accurately interpret the meaning of their own advertising claims," NAD noted in its decision. "This is especially true in this marketplace where technology is constantly evolving and new products with faster Internet speeds are frequently advertised."
Separately, the NAD released a statement Wednesday that Verizon "acted properly" in discontinuing claims -- challenged by Comcast -- that FiOS Internet was "Rated #1 for supporting multiple users and devices simultaneously."
That claim by Verizon was based on an April 2011 survey conducted by ChangeWave Research. Comcast argued such a claim implied that the study participants compared the advertiser's services with those of other service providers and ranked competitors lower -- which was not the case.
Verizon told the NAD it had discontinued the claim. The telco added, though, that it "respectfully is of the opinion that a properly qualified claim citing the ChangeWave research conclusion that Verizon customers rate the performance of their service in supporting multiple devices and users simultaneously higher than competitor customers rate the performance of their respective services does not imply a comparison made by respondents against other service providers' Internet services."
