Verizon, Cablevision Settle Suit Over Internet-Speed Ads




Verizon Communications Inc. (VZ), the
second-biggest U.S. phone company, and Cablevision Systems Corp.
settled a lawsuit over ads that Cablevision claimed
misrepresented its Internet speeds.

Cablevision, the fifth-largest U.S. cable-television
provider by subscribers, sued Dec. 6 claiming Verizon was using
outdated information. The ads ran their course Dec. 17 and
Verizon will have new ads sometime in the future, company
spokesman William Kula said.

“Cablevision and Verizon have reached an agreement to
resolve the dispute without further need for litigation,” Kula
and James Maiella, a Cablevision spokesman, said in separate
phone interviews today. They declined to disclose terms of the
settlement.

A hearing had been scheduled for today before U.S. District
Judge Joanna Seybert in Central Islip, New York, on
Cablevision’s request to force New York-based Verizon to pull
the ads. The TV, radio, direct-mail and Internet spots running
in the New York area claimed that a “just released” Federal
Communications Commission study shows Bethpage, New York-based
Cablevision delivers at most 59 percent of its advertised speeds
during peak hours, according to the complaint.

Upgraded System

The FCC report from August referred to tests performed in
March, and Cablevision said it has upgraded its system since
then. On Dec. 5, the FCC said in a blog post that Cablevision’s
results in the report were outdated and its performance had
improved, Cablevision said.

Verizon is Cablevision’s primary competitor for Internet
service in the New York metropolitan area, according to court
papers.

Verizon said in court papers that Cablevision’s request was
unnecessary because it planned to stop saying that the FCC
report was “recent” and that Cablevision “currently”
delivers only 59 percent of advertised speeds.

“Verizon is pointing out the alleged inability of its
competitor Cablevision to provide what it’s advertising,”
Christopher Cole, an advertising lawyer at Manatt, Phelps
Phillips in Washington, said in an interview last week. “It’s a
little unusual to be quite that hard-hitting.”

Cole wasn’t involved in the case.

FCC Tests

Verizon, which started running the ads in August, said in
court papers that the claims continued to be true and that the
ads said the data is from before August.

FCC tests in September and October showed Cablevision’s
speeds to be close to or above those it advertises, Cablevision
said in court papers. Subscribers to one of its services
received download speeds during peak hours at more than 90
percent of the advertised speed, it said.

Verizon said Cablevision’s speeds still fall short of those
claimed in its advertising.

The case is Cablevision Systems Corp. (CVC) v. Verizon
Communications Inc., 11-cv-5934, U.S. District Court, Eastern
District of New York (Central Islip).

To contact the reporters on this story:
Thom Weidlich in Brooklyn, New York, federal court at
tweidlich@bloomberg.net;
Janon Fisher in Central Islip, New York, federal court at
janonfisher@gmail.com.

To contact the editor responsible for this story:
Michael Hytha at mhytha@bloomberg.net.

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Article source: http://webfarm.bloomberg.com/news/2011-12-19/verizon-cablevision-settle-suit-over-advertisements-for-internet-speeds.html

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