NAD Recommends Verizon Modify Certain Claims Challenged by Comcast, Finds Certain Claims Supported

New York, NY – Oct. 13,  2014 – The National Advertising Division has recommended that Verizon Communications, Inc. modify certain advertising claims for the company’s FiOS internet and television service and better disclose the basis of a “Rated #1” claim.

NAD determined that certain claims related to Verizon’s fiber optic network were supported.

The claims at issue, made in television and radio commercials, internet and direct mail advertisements, were challenged by Comcast Cable Communications, a competing internet and television service provider.

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

Express claims at issue included “Get the difference 100% fiber optics makes” and “FiOS TV is rated #1 in customer satisfaction, value and reliability, ahead of all the major cable and satellite companies.”

NAD also considered whether Verizon’s advertising implied that:

  • Comcast Internet subscribers regularly experience glitches, lag time and other interruptions in their Internet activities that are both noticeable and frustrating.  Verizon FiOS Internet subscribers never experience glitches, lag time, or other interruptions in their Internet activities.
  • Consumers who choose Internet service from Comcast will be frustrated on a regular basis. 
  • The supposed difference in end-user experience between Comcast and FiOS is because the Verizon’s FiOS network is 100% fiber optics.
  • FiOS TV is rated #1 in value and reliability based on a study where participants rated or ranked FiOS TV against other service providers, including Comcast, which presumable rated or ranked lower. 

A key issue for NAD was the context in which Verizon made general claims about its fiber optic network, including the claim “Get the difference 100% fiber optics makes.” NAD determined that in a stand-alone context, the claim is supported. However, NAD reached a different conclusion with Verizon’s implied claims that because of its 100% fiber optic network, FiOS customers would experience fewer glitches and less lag time in video-chatting and gaming than cable.

NAD determined that the website claim “Say goodbye to sluggish broadband speeds and congestion,” followed by bullet points about its 100% fiber-optic technology and virtually lag-free gaming, may imply that consumers would see improved service by switching to FiOS. NAD noted there was insufficient evidence in the record of this case to support the message FiOS produces fewer glitches or less lag-time than cable for video-chatting or gaming or that fiber-optics will deliver a smoother, less frustrating Internet connection than cable for the purpose of video-chatting or gaming.  NAD recommended that the claims be discontinued.

The claim that “FiOS TV is rated #1 in customer satisfaction, value and reliability, ahead of all the major cable and satellite companies,”  appeared in direct mail letters to consumers and included a disclosure at the bottom of the letter stating, “2013 American Consumer Satisfaction Survey (ACSI) for subscription TV service Q1 2013.”

NAD found that the claim “Rated #1 in customer satisfaction,” standing alone, conveyed the message that it was based on customers’ ratings of their own service. At the same time, NAD determined that the claim “Rated #1 in customer satisfaction, value and reliability,” could reasonably be interpreted to mean that the customer service rating was based upon consumer ratings, while the value and reliability ratings were based on objective performance measures, including head-to-head testing – a message that is not accurate.

NAD recommended that Verizon modify the claim “FiOS TV is rated #1 in customer satisfaction, value and reliability” to make clear that the entire claim is based on a customer satisfaction survey and to avoid conveying the unsupported implied message that the value and reliability ratings are based on objective performance measures.

Verizon, in its advertiser’s statement, said that while the company “respectfully disagrees with the NAD’s recommendations to modify its claims regarding the disclosures related to the ACSI survey, and that Verizon’s website makes comparative claims regarding video-chatting glitches and gaming lag time, Verizon will nevertheless consider NAD’s recommendations in future advertising.”