NAD Recommends Verizon Better Disclose Basis for Certain Claims following Cablevision Challenge

New York, NY – Aug. 28, 2014 – The National Advertising Division has recommended that Verizon Communications, Inc., modify certain advertising claims, including claims that are based on PC Magazine surveys, to better disclose the basis for the claims.

NAD is an investigative unit of the advertising industry’s system of self-regulation. It is administered by the Council of Better Business Bureaus.

CSC Holdings, LLC, which operates Cablevision, a competing internet services provider, challenged claims that appeared in two Verizon commercials and in print advertising.

Verizon responded by informing NAD in writing that, prior to the date of the challenge, it had permanently discontinued one of the two commercials and a longer version of the other commercial. Verizon contended that challenged claims that remained in the marketplace – superior speed claims and a “Rated #1” by PC Magazine claim – were fully supported. NAD administratively closed its review of those claims that had been permanently discontinued, including claims that Verizon FiOS is superior to Cablevision for online video games and videochatting.

The issues raised for NAD in this challenge were whether Verizon’s advertising claims about the speed of its internet service and ratings by PC Magazine are both literally truthful and conveyed a truthful and not misleading message to consumers about FiOS internet service and whether Verizon’s claims falsely disparage its competitor’s service.

NAD examined express and implied claims that included:

  • FiOS’ download speeds are twice as fast as Cablevision’s
  • FiOS is “Rated #1” for “speed, customer satisfaction, and reliability”
  • FiOS is “the fastest internet service provider in the nation” by a wide margin

Cablevision challenged the claim that a FiOS consumer could download an HDTV video in 10 seconds compared to a 45-seconds cable download time.  The claim was accompanied by a disclosure that read: “Comparison based on simulated FiOS 500/100 Mbps speeds and Cable Internet 101/35 Mbps speeds.”

NAD noted in its decision that the claim is literally true, as FiOS 500/100 Mbps allows customers to download a 45-minute HDTV video in 10 seconds, while Cablevision’s 101/35 Mbps takes 45 seconds to download the same video.

As an initial matter NAD determined that Verizon provided adequate support for its claim that the FiOS 500/100 Mbps service is four times faster that Cablevision’s 101/35 Mbps service – the top tier of service offered by each ISP.

However, NAD was concerned that Verizon did not clearly communicate that the service level which provides the claimed performance – 4X faster video downloading on FiOS compared to cable – is FiOS’ top tier of service.  NAD determined that a reasonable consumer takeaway from the comparison is that Verizon FiOS was 4X faster than cable for downloading video in any service tier.

Although the advertisement included a small super that specified the speeds compared,

NAD determined that Verizon should clearly and conspicuously communicate that a specific service tier is being compared and identify the service tier in a way that is meaningful to consumers.  NAD recommended that Verizon modify its “See the Difference” commercial to disclose, clearly and conspicuously, that several speed tiers are available and that its comparison is limited to the fastest tiers of FiOS and Cablevision service.

NAD noted that Verizon made several claims attributed to a PC Magazine study including, “Fastest Internet Service Provider in the Nation,” “2X faster,” and “Rated #1” for “speed, customer satisfaction, and reliability.”  These claims are based upon two different PC Magazine studies.  The “2X faster” and “Fastest Internet Service Provider in the Nation” speed claims are based upon the PC Magazine’s “Study of the Fastest ISP’s in 2013”  while the “Rated #1 Claims” are based on PC Magazine’s “Reader’s Choice Awards” in 2014.

In prior decisions NAD had determined that the PC Magazine “Reader’s Choice Awards” were “relevant to demonstrate ‘consumer satisfaction’ with a particular service provider.”

In this case, NAD recommended that the advertiser modify its “Rated #1 for Speed, Reliability and Customer Satisfaction” claim to make clear that the claim is based on a customer satisfaction survey of consumers’ rating of their own ISPs’ performance.

NAD recommended that the advertiser modify its “2X Faster” claims or its “Fastest Internet Service Provider in the Nation” claims to disclose that the claim is based upon aggregating speed results over tiers of service or a comparison of the fastest speed tiers of Verizon against its cable competitors.

Finally, NAD recommended that when Verizon advertises its $89.99/month price for three services, its price claim should be conveyed separately from its superior speed claim and that Verizon avoid conveying the inaccurate message that the superior speed claim is based on the internet speed offered as part of the advertised package.

Verizon, in its advertiser’s statement, said the company “is pleased that NAD determined that Verizon’s claims that the FiOS 500/100 Mbps service is superior to Cablevision for uploading data” and other claims are substantiated, but “respectfully disagrees with NAD’s recommendation that Verizon modify the disclosures provided in connection with these claims in the ‘See The Difference’ video commercial and the print advertisements at issue.  Verizon’s disclosures were appropriately worded, placed, and consistent with well-accepted advertising industry standards.  Verizon will take NAD’s recommendations into consideration in future advertising.”