NAD Recommends Comcast Discontinue Certain Comparative Claims Made Against AT&T’S U-Verse. Finds Comcast Can Support Claim to Superior HD Quality, Not Claim that AT&T Offers Poor Quality

New York, NY – Feb. 16, 2012  – The National Advertising Division of the Council of Better Business Bureaus has determined that Comcast Cable Communications took necessary and proper action in discontinuing advertising claims that stated or suggested that U-verse, the bundled television service offered by AT&T Services, Inc., is a collection of “old wires.”

NAD, the advertising industry’s self-regulatory forum, further recommended that Comcast discontinue in future advertising certain claims that were featured as part its comparative “Tired Wires,” advertising campaign.

NAD also found that while Comcast could support a claim to superior linear HD picture quality, it had no basis for the claim that AT&T’s U-Verse provides poor HD picture quality.

Comcast’s “Tired Wires” advertising campaign featured an animatronic creature who appeared to be a pained or exhausted tangle of wires that represented AT&T’s U-verse service.  As a preliminary matter, the advertiser stated that the Tired Wires campaign, which began running over a year before AT&T filed its NAD challenge, was largely complete at the time AT&T filed its challenge, and had since been phased out.

NAD noted in it decision that Comcast reserved the right to claim in its advertising that it offers and delivers faster Internet speeds, that AT&T is unable to deliver its top Internet speeds to a U-verse subscriber and Comcast has better HD picture quality.

NAD retains jurisdiction over claims that were  in the marketplace at the outset of a challenge and, as a general rule, will review those claims on their merits unless the advertiser represents in writing that the claims have been permanently discontinued. In this case, NAD examined claims that included:

• “U-VERSE can’t, XFINITY CAN”
• “XFINITY’s enhanced fiber optic network provides more bandwidth than U-verse’ old phone wires, so you can get faster Internet speeds, more on demand and a superior HD experience.”
• “U-verse’s old phone wires can’t handle what Xfinity can.  Visit XfinityCan to learn more.”
• “U-verse’s bandwidth is like trying to suck a cement milkshake through a coffee straw.”
• “You think these old phone wires were made for squeezing out HD movies?”

NAD also examined implied claims that included:

• It would be “insane [for consumers to] demand” that U-verse run both Internet and HDTV at the same time.
• U-verse Internet service will routinely cease to function or slow to a crawl for ordinary U-verse customers when one or more HDTV’s are turned on.
• U-verse Internet service is subject to frequent dramatic declines in performance resulting in freezes or stoppages.
• U-verse is incapable of providing a high quality HD picture and customers of U-verse should not bother purchasing a new HDTV because doing so would be a waste of money as long as they are subscribed to U-verse.
• Xfinity has superior HDTV picture quality and U-verse HDTV picture quality is poor.

Following its review of the evidence in the record, NAD recommended that Comcast discontinue its references to AT&T’s U-Verse network as a “bunch of old phone wires”

In addition, NAD recommended that Comcast permanently discontinue the use of the claim “advanced fiber optic network” to describe its hybrid network.

NAD determined that the Internet speed tests submitted by both parties supported the advertiser’s argument that AT&T U-Verse is unable to deliver its top Internet speeds to a U-Verse subscriber who is watching two or more HD programs.  NAD recommended that Comcast limit claims that AT&T U-Verse subscribers will experience Internet speed degradation to the top two speed tiers offered by AT&T U-Verse and the bandwidth circumstances that cause such degradation.

To avoid the potential for consumer confusion in the future, visuals used to convey the message that AT&T’s Internet service may slow down when high demands are placed on the network should accurately reflect the fact that AT&T’s U-Verse Internet service may slow down – and refrain from conveying the inaccurate message that the Internet will come to a complete stop or freeze.

NAD determined that the advertiser’s evidence was  insufficient to support the broad implied claims that U-Verse Internet is slow, and always slower than Comcast.  In addition, NAD determined that the advertiser’s disclosures are not sufficient to avoid conveying the unsupported implied messages that U-Verse Internet is slow, and always slower than Comcast.  For these reasons, NAD recommended that the advertiser make the basis for the Internet speed comparisons clear in the main claims, rather than disclosing them in a fine print disclosure.

NAD concluded that the advertiser’s evidence provided a reasonable basis to support its superior HD picture quality claims, but noted that the advertiser’s evidence did not address Video on Demand content.  NAD recommended that the advertiser’s superior HD picture quality claims be limited to linear programming.  Finally, NAD determined that the advertiser’s claims that AT&T U-Verse provides poor HD picture quality are unsupported by the evidence in the record. NAD recommended that the advertiser discontinue the use of such claims.

Comcast, in its advertiser’s statement, said the company “disagrees with NAD’s concerns regarding the likely consumer takeaway with respect to certain of its advertisements, however, those advertisements have not been in rotation for many months and Comcast does not intend to reinstate them in that form.  As a strong supporter of the self-regulatory process, Comcast will take into account NAD’s concerns should it reinstate such advertising in the future.”

NAD’s inquiry was conducted under NAD/CARU/NARB Procedures for the Voluntary Self-Regulation of National Advertising.  Details of the initial inquiry, NAD’s decision, and the advertiser’s response will be included in the next NAD/CARU Case Report.

About Advertising Industry Self-Regulation: The National Advertising Review Council (NARC) was formed in 1971. NARC establishes the policies and procedures for the National Advertising Division (NAD) of the Council of Better Business Bureaus, the CBBB’s Children’s Advertising Review Unit (CARU), the National Advertising Review Board (NARB) and the Electronic Retailing Self-Regulation Program (ERSP).

The NARC Board of Directors is composed of representatives of the American Advertising Federation, Inc. (AAF), American Association of Advertising Agencies, Inc., (AAAA), the Association of National Advertisers, Inc. (ANA), Council of Better Business Bureaus, Inc. (CBBB), Direct Marketing Association (DMA), Electronic Retailing Association (ERA) and Interactive Advertising Bureau (IAB).  Its purpose is to foster truth and accuracy in national advertising through voluntary self-regulation.

NAD, CARU and ERSP are the investigative arms of the advertising industry’s voluntary self-regulation program. Their casework results from competitive challenges from other advertisers, and also from self-monitoring traditional and new media. NARB, the appeals body, is a peer group from which ad-hoc panels are selected to adjudicate NAD/CARU cases that are not resolved at the NAD/CARU level. This unique, self-regulatory system is funded entirely by the business community; CARU is financed by the children’s advertising industry, while NAD/NARC/NARB’s primary source of funding is derived from membership fees paid to the CBBB. ERSP’s funding is derived from membership in the Electronic Retailing Association. For more information about advertising industry self-regulation, please visit www.narcpartners.org.