National Advertising Division Finds Spectrum’s “Most Consistent Download Speeds” Claim Supported; Recommends Others be Modified or Discontinued
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New York, NY – April 20, 2022 – In a challenge brought by AT&T Services. Inc., the National Advertising Division (NAD) of BBB National Programs determined that Charter Communications, Inc. substantiated the “most consistent download speeds” claim for its Spectrum Internet service. However, NAD recommended that the advertiser discontinue:
- Implied claims that AT&T imposes a hard data limit on its internet subscribers and that AT&T throttles its internet subscribers who exceed their data allowance;
- The claim that Spectrum Internet offers “better performance” than the competition with respect to gaming; and
- The claim that Spectrum Internet is more reliable than internet offerings from AT&T.
NAD also recommended that the advertiser modify a comparative equipment fees claim, the claim that Spectrum Internet offers the “fastest internet starting speeds for the price,” and a monadic “over 99.9% network reliability” claim to disclose additional material information.
Data Limit Claim
NAD considered the messages communicated by claims made in a humorous video advertisement (the “Mobile Billboard Ad”) and determined that a reasonable takeaway is that AT&T imposes a hard cap on or throttles data.
NAD noted that AT&T imposes a data limit on its internet subscribers after they use 1TB of data each month, and after informing consumers that they have reached their limit, charges an additional $10 for each of 50 GB of data used, up to $100/month. However, this imposition of a data limit is neither a hard cap, which cuts off data, nor throttling, which provides slower service.
NAD therefore found that the advertiser’s claim that AT&T engages in such practices was not supported, nor was the advertiser’s disclosure sufficient to inform consumers that any data limit only applies to AT&T Internet plans up to 75 Mbps, and recommended that the advertiser discontinue the claims that AT&T imposes a hard data limit on its internet subscribers and that AT&T throttles its internet subscribers who exceed their data allowance.
Equipment Fees Claim
The challenged equipment fees claim also appears in the Mobile Billboard Ad. NAD determined that one message reasonably conveyed by this advertising is that AT&T’s offerings are being compared to a competing service (even if Spectrum is not identified until later in the video) and that consumers will be getting the same equipment from Spectrum (i.e. a WiFi router) for $120 less a year. However, NAD noted that the advertiser’s service only provides a router without WiFi capability, and a WiFi router would cost extra, a material difference in the comparison that must be disclosed.
Therefore, NAD recommended that the advertiser modify the claim to clearly and conspicuously disclose the material differences that form the basis of the comparison.
Better Performance Claim
NAD determined that two similar 60-second television commercials (the “Competition Ads”) specifically tout “better performance” while gaming. The commercial starts with the statement that “when it comes to internet and TV, Spectrum has the competition beat.” Immediately after this statement, the video frames the narrative by displaying a gamer outfitted with a gaming VR headset pointing to his gaming controllers and asking if Spectrum can “keep up with all of this.”
NAD found that the advertiser did not provide a reasonable basis for the claim that it provides superior gaming performance than its competitors and recommended that the claim be discontinued.
Fastest Starting Speeds for the Price Claim
NAD considered the messages reasonably conveyed by the “fastest internet speeds for the price” claim, which was made in the Competition Ads commercial. NAD found that while the “fastest speed” claim could reasonably convey a comparative message, the “for the price” language qualifies the broader claim and consumers would understand that the comparison is being made at that specific price point.
NAD noted that the parties use different methods to calculate the price and speed differences and that it is difficult to compare prices when consumers are provided different options that affect the monthly cost for the service. This is particularly the case when material fees like mandatory or optional equipment fees, taxes, autopay discounts, bundling discounts, coverage area issues, and other costs and discounts are not disclosed to consumers. Indeed, many price claims in the telecommunications industry include a lengthy disclosure explaining exactly what goes into the pricing.
Therefore, NAD recommended that the unqualified pricing comparison claim be modified to clearly and conspicuously disclose the basis of comparison, and the material assumptions underlying the comparison, that would render the claim true.
99.9% Reliability Claim
NAD determined that the challenged television commercial (the “Pick and Choose Ad”) did not convey a comparative message related to reliability, only a monadic one. Because the data used to support the “over 99.9% network reliability” claim does not take into account certain types of outages, most notably weather events (e.g. hurricanes), NAD recommended that the advertiser modify the claim to clearly and conspicuously disclose its limitations.
Further, NAD found that the advertiser did not provide sufficient evidence to support its comparative use of the “over 99.9% network reliability” claim in a mailer. NAD noted that the advertiser pointed to the reliability numbers on AT&T’s website (“over 99%) as support for its comparison, but because there is no indication of how far “over 99%” AT&T’s reliability extends it is unclear whether AT&T’s advertising claim alone provides a basis for Spectrum’s superiority claim.
Therefore, NAD recommended that the advertiser discontinue the comparative reliability claim against AT&T.
Most Consistent Download Speeds Claim
NAD determined that the advertiser substantiated the “most consistent download speeds” claim, which appeared in the Pick and Choose commercial. In support of its claim, the advertiser relied on the results of the FCC’s MBA Report as well as data from Ookla.
In its advertiser statement, Spectrum stated that it “will comply with NAD’s decision.” The advertiser further stated that “while it disagrees” with certain aspects of “NAD’s decision, it is a strong supporter of self-regulation and will comply with NAD’s recommendations.”
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