AT&T lawsuit a publicity boon for Verizon
12:01a ET November 19, 2009 (MarketWatch)
SAN FRANCISCO (MarketWatch) -- Some things are just better off left alone.
In AT&T Inc.'s case, that would have been a better response to the ongoing ad campaign by rival Verizon Communications Inc. Instead, the telco giant got all huffy and indignant about Verizon's "there's a map for that" ads that poke fun at AT&T and contrast the 3G coverage areas of the two wireless carriers.
That righteous indignation led AT&T to file a lawsuit two weeks ago against Verizon, a suit which is confusing at best, and one that is making many people scratch their heads over why it was even filed. Did AT&T's top public-relations people have any input before the go-ahead was given to a highly-paid law firm to file this muddled request for a temporary restraining order?
On Wednesday, a federal judge in Atlanta denied AT&T's request to keep the ads from running until the legal dispute was settled. In so doing, the judge reportedly said the ads are "literally true." AT&T has another hearing on Dec. 16 and seems determined to press on.
The ruling was even more good fortune for Verizon, which had snipped at its arch-rival in its response to AT&T's original lawsuit. "The truth hurts," Verizon's attorneys wrote in their motion, filed on Monday.
AT&T's main beef is over the maps used in the ads, which show its 3G coverage area in the U.S. is much smaller than Verizon's.
Those maps are telling. As Verizon helpfully points out, it offers "5X more 3G coverage" than AT&T. And AT&T admits this as well, pointing out in its main 26-page argument that "Verizon's '3G' network covers more geographical space than AT&T's '3G' network on a national basis."
So what's the problem? AT&T is worried that potential customers will assume that lack of 3G coverage means no coverage at all. So AT&T argues that it is seeking only a limited relief, because it needs to "prevent consumers from being misled by the maps into believing that AT&T offers no wireless service" in large parts of the country.
Verizon originally said that AT&T customers were "out of touch" in large parts of the U.S., and subsequently removed this phrase from the ad, at AT&T's request. AT&T also argued that having a girl sitting under one map, showing AT&T's more limited 3G coverage, sad and frustrated and not able to do anything with her wireless device, implied that AT&T offers no coverage at all outside its 3G network.
According to Bloomberg News on Wednesday, Judge Timothy Batten said that while the ads, which use maps to compare the companies' third-generation networks, might be "sneaky" or "clever," they are "literally true."
AT&T's lawsuit so far is a clear admission of one thing -- Verizon's clever ads are hitting AT&T where it hurts.
As an AT&T user who has experienced countless dropped calls and tremendously spotty reception both in and out of the company's 3G network, it seems ludicrous to me that AT&T is focusing so much attention on its inferior network, which is exactly what this lawsuit does.
Even more laughable are the graphs in the lawsuit touting its dreaded EDGE network, "which provides consumers the full ability to browse the Internet, including social networking sites, stream audio/video, or send electronic mails and text message texts."
Well, yes, at a snail's pace.
Verizon's ad campaign is even boldly going after AT&T's strongest asset -- the iPhone. A new holiday commercial has an Apple Inc. iPhone-like device arriving at the "Island of Misfit Toys" to the wonderment of the other toys, until they see the AT&T coverage map appear pop up over the smartphone. "Oh!" they murmur in unison. "You're gonna fit right in here."
Thanks to AT&T's suit, Verizon is now getting more attention for its snarky TV ads and its plain-speaking legal response to AT&T's lawsuit, with sentences like "AT&T may not like the message that the ads send, but this Court should reject its efforts to silence the messenger," another turn AT&T was probably not counting on.
This legal squabble comes, not surprisingly, as the smartphone war is heating up -- in a very big way. Verizon is now selling the Motorola Inc. Droid phone, and plans to launch Palm Inc.'s Pre sometime next year in an effort to compete against the popular iPhone, for which AT&T still has exclusive access to.
Based on AT&T's comments, it looks like it will continue to fight, even though Batten said the giant is unlikely to prevail at its next hearing.
It would have been smarter to come back at Verizon with its own clever ad campaign, and put some of the millions it is paying its lawyers into further upgrading its network.