Appeal of NAD Final Decision
Regarding Advertising by Time Warner Cable, Inc.
Background:
Verizon Communications, Inc.(“Verizon”) challenged claims by Time Warner Cable, Inc.(“Time Warner”) – in television, print, and Internet advertising – for its television, Internet and telephone services (“telecommunications services”). The challenged claims described Time Warner’s telecommunications services network as a fiber optic network and advanced fiber optic network, as demonstrated by the following examples:
• “[Time Warner’s] fiber-optic network delivers speeds up to 15 Megs for a
dramatically faster online experience.”
• “Road Runner Turbo is zooming across the advanced fiber network.”
• “[Time Warner’s] “advanced fiber network lets you experience the web like never before.”
• “[Time Warner’s] advanced fiber optic network delivers the future to you… for less.”
NAD determined that at least one reasonable interpretation of Time Warner’s claim to have a fiber optic network was the message that Time Warner offers its telecommunications services over a network that (1) solely consists of fiber optics and (2) is the functional and/or technical equivalent of a telecommunications services network where fiber optics extend to the home. NAD further determined that Time Warner did not provide a reasonable basis to support this message, and recommended that Time Warner discontinue use of the phrase “fiber optic network” to describe its network.
Findings and Conclusions:
Differences in network structure:
Times Warner, which described itself as an early adopter of fiber optic technology, argued it was entitled to identify its network as “fiber optic” because it used fiber optic cable in over 95% of the network.
While most telecommunications providers currently use fiber optic cable for the “backbone” of their networks, there are differences as to what is used in the “last mile” that connects the providers’ offices to individual homes. For example, both Verizon’s FIOS service and Time Warner use fiber optic cable for their networks’ “backbone.” Verizon’s FIOS network, which has been described as a “Fiber to the home” network, also uses fiber optic cable from Verizon’s central offices to a terminal attached to the consumer’s home. Time Warner’s network, which has been described as a “hybrid fiber coax” or “Fiber to the node” network, uses fiber optic cables from its central offices to a neighborhood “node,” and from that point coaxial cable is used in the “last mile” to connect the node to each consumer’s home.
The record in this case indicates that “last mile” architecture is relevant to a network’s performance capabilities. Prior NAD cases recognized differences between “Fiber to the home” networks and “Fiber to the node” networks, and the evidence in the present case shows those differences continue to exist. The record indicates that “Fiber to the home” networks are generally considered to represent the highest level of technology currently used for consumer telecommunications services.
What are reasonable consumer takeaways with respect to networks represented to be “fiber optic”?
No consumer perception evidence was introduced in this case, and thus the panel must place itself in the shoes of consumers to determine the messages reasonably conveyed by the challenged advertising.
The panel has determined that, for many consumers, the messages reasonably conveyed by Time Warner’s description of its network as “fiber optic” include (1) fiber optics are used for transmission throughout the entire network controlled by Time Warner 1 and/or (2) Time Warner’s network represents the highest level of technology currently used by consumer telecommunications services providers. These messages are reinforced by the challenged advertising’s repeated emphasis on speed and the advanced nature of the Time Warner network.
Both parties provided an extensive record concerning the terminology used by a variety of sources – including industry, media and government – in describing consumer telecommunications services networks. The panel’s findings are consistent with the terminology commonly used by these sources. The record contains numerous examples of media and industry communications that identify the Verizon FIOS network as a “fiber optic” network and use other descriptors -- such as cable, hybrid fiber coax, or DSL -- to describe networks like Time Warner’s that do not run fiber optic cable directly to individual homes. Media usage is also consistent with reasonable consumer perception that fiber optic networks represent the highest level of technology currently used by consumer telecommunications services providers.
The panel recognizes that many products and services may be appropriately described by reference to their predominant characteristic. However, reference to the predominant characteristic of a product or service can be misleading if, as in the present case, that reference reasonably implies attributes that are not substantiated.
Time Warner does not dispute that its telecommunications services network does not use fiber optic cable throughout its entire network because fiber optic cables are not used in the “last mile” to consumer homes. In addition, Time Warner has not provided a reasonable basis to show that its network represents the highest level of technology currently used by consumer telecommunications services providers.
___________________________________
1 The parties in this case debated the meaning of “network,” including questions of whether it would be
understood to end at the door of consumer homes or at specific devices within a consumer’s homes. While
this could be a matter debated among sophisticated users, the panel believes that the more common reasonable
perception is that a “network” describes the entire flow of transmissions controlled by providers up to (but not
inside) the home.
___________________________________
Decision:
The panel thanks both parties for participating in this process, which is an important part of the advertising industry’s self-regulatory efforts to ensure the truthfulness and accuracy of advertising claims.
The panel recommends that Time Warner discontinue the challenged claims that its telecommunications services are provided on a fiber or fiber optic network.
Advertiser Statement:
Time Warner Cable respectfully disagrees with the NARB panel’s decision and maintains that: (1) its advertising claims to have a fiber optic network are fully substantiated; and (2) its non-comparative “fiber optic network” claims cannot reasonably be interpreted to imply that its fiber-to-the-node network is the same as FiOS’s fiber-to-the-home network. Time Warner Cable believes that the panel’s decision denies Time Warner Cable the opportunity to truthfully and accurately describe its fiber optic network in its advertising – a practice which it has engaged in for two decades without any signs of consumer confusion or harm.
In addition, the panel's decision inhibits the ability of Time Warner Cable and other service providers to distinguish their services in areas where their competitors have indisputably inferior products. Despite its disagreement, however, in the spirit of the self-regulatory process, Time Warner Cable will take the panel’s decision into consideration and modify and/or withdraw the specific advertisements at issue to comply with the panel’s decision.
Board Members for Panel #166
Dr. Jan LeBlanc Wicks (Chair)
Regarding Advertising by Time Warner Cable, Inc.
Background:
Verizon Communications, Inc.(“Verizon”) challenged claims by Time Warner Cable, Inc.(“Time Warner”) – in television, print, and Internet advertising – for its television, Internet and telephone services (“telecommunications services”). The challenged claims described Time Warner’s telecommunications services network as a fiber optic network and advanced fiber optic network, as demonstrated by the following examples:
• “[Time Warner’s] fiber-optic network delivers speeds up to 15 Megs for a
dramatically faster online experience.”
• “Road Runner Turbo is zooming across the advanced fiber network.”
• “[Time Warner’s] “advanced fiber network lets you experience the web like never before.”
• “[Time Warner’s] advanced fiber optic network delivers the future to you… for less.”
NAD determined that at least one reasonable interpretation of Time Warner’s claim to have a fiber optic network was the message that Time Warner offers its telecommunications services over a network that (1) solely consists of fiber optics and (2) is the functional and/or technical equivalent of a telecommunications services network where fiber optics extend to the home. NAD further determined that Time Warner did not provide a reasonable basis to support this message, and recommended that Time Warner discontinue use of the phrase “fiber optic network” to describe its network.
Findings and Conclusions:
Differences in network structure:
Times Warner, which described itself as an early adopter of fiber optic technology, argued it was entitled to identify its network as “fiber optic” because it used fiber optic cable in over 95% of the network.
While most telecommunications providers currently use fiber optic cable for the “backbone” of their networks, there are differences as to what is used in the “last mile” that connects the providers’ offices to individual homes. For example, both Verizon’s FIOS service and Time Warner use fiber optic cable for their networks’ “backbone.” Verizon’s FIOS network, which has been described as a “Fiber to the home” network, also uses fiber optic cable from Verizon’s central offices to a terminal attached to the consumer’s home. Time Warner’s network, which has been described as a “hybrid fiber coax” or “Fiber to the node” network, uses fiber optic cables from its central offices to a neighborhood “node,” and from that point coaxial cable is used in the “last mile” to connect the node to each consumer’s home.
The record in this case indicates that “last mile” architecture is relevant to a network’s performance capabilities. Prior NAD cases recognized differences between “Fiber to the home” networks and “Fiber to the node” networks, and the evidence in the present case shows those differences continue to exist. The record indicates that “Fiber to the home” networks are generally considered to represent the highest level of technology currently used for consumer telecommunications services.
What are reasonable consumer takeaways with respect to networks represented to be “fiber optic”?
No consumer perception evidence was introduced in this case, and thus the panel must place itself in the shoes of consumers to determine the messages reasonably conveyed by the challenged advertising.
The panel has determined that, for many consumers, the messages reasonably conveyed by Time Warner’s description of its network as “fiber optic” include (1) fiber optics are used for transmission throughout the entire network controlled by Time Warner 1 and/or (2) Time Warner’s network represents the highest level of technology currently used by consumer telecommunications services providers. These messages are reinforced by the challenged advertising’s repeated emphasis on speed and the advanced nature of the Time Warner network.
Both parties provided an extensive record concerning the terminology used by a variety of sources – including industry, media and government – in describing consumer telecommunications services networks. The panel’s findings are consistent with the terminology commonly used by these sources. The record contains numerous examples of media and industry communications that identify the Verizon FIOS network as a “fiber optic” network and use other descriptors -- such as cable, hybrid fiber coax, or DSL -- to describe networks like Time Warner’s that do not run fiber optic cable directly to individual homes. Media usage is also consistent with reasonable consumer perception that fiber optic networks represent the highest level of technology currently used by consumer telecommunications services providers.
The panel recognizes that many products and services may be appropriately described by reference to their predominant characteristic. However, reference to the predominant characteristic of a product or service can be misleading if, as in the present case, that reference reasonably implies attributes that are not substantiated.
Time Warner does not dispute that its telecommunications services network does not use fiber optic cable throughout its entire network because fiber optic cables are not used in the “last mile” to consumer homes. In addition, Time Warner has not provided a reasonable basis to show that its network represents the highest level of technology currently used by consumer telecommunications services providers.
___________________________________
1 The parties in this case debated the meaning of “network,” including questions of whether it would be
understood to end at the door of consumer homes or at specific devices within a consumer’s homes. While
this could be a matter debated among sophisticated users, the panel believes that the more common reasonable
perception is that a “network” describes the entire flow of transmissions controlled by providers up to (but not
inside) the home.
___________________________________
Decision:
The panel thanks both parties for participating in this process, which is an important part of the advertising industry’s self-regulatory efforts to ensure the truthfulness and accuracy of advertising claims.
The panel recommends that Time Warner discontinue the challenged claims that its telecommunications services are provided on a fiber or fiber optic network.
Advertiser Statement:
Time Warner Cable respectfully disagrees with the NARB panel’s decision and maintains that: (1) its advertising claims to have a fiber optic network are fully substantiated; and (2) its non-comparative “fiber optic network” claims cannot reasonably be interpreted to imply that its fiber-to-the-node network is the same as FiOS’s fiber-to-the-home network. Time Warner Cable believes that the panel’s decision denies Time Warner Cable the opportunity to truthfully and accurately describe its fiber optic network in its advertising – a practice which it has engaged in for two decades without any signs of consumer confusion or harm.
In addition, the panel's decision inhibits the ability of Time Warner Cable and other service providers to distinguish their services in areas where their competitors have indisputably inferior products. Despite its disagreement, however, in the spirit of the self-regulatory process, Time Warner Cable will take the panel’s decision into consideration and modify and/or withdraw the specific advertisements at issue to comply with the panel’s decision.
Board Members for Panel #166
Dr. Jan LeBlanc Wicks (Chair)
Professor & Graduate Coordinator
University of Arkansas
Pattie Glod
Senior Vice President, Marketing & Media Brand & Creative Services
Limited Brands, Inc.
Ron Jacobs
President
Jacobs & Clevenger, Inc.
Kathy Sharpe
Chief Executive Officer
Sharpe Partners
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