AT&T (NYSE: T) has been told by the National Advertising Division (NAD) to modify the way it compares its Internet speeds with those offered by its cable rival Comcast (NASDAQ: CMCSA).
Among the advertising claims at issue that were challenged by Comcast are claims that AT&T's service provides "up to 45 Mbps," is "reliable" and that it provides the "fastest Internet for the price."
In reviewing AT&T's "up to" claims about its 45 Mbps speed tier, NAD said the service provider gave it data that showed an "appreciable" number of customers receive its 45 Mbps under typical-use scenarios.
NAD added that "there are material limitations to the availability of this service," meaning that in some markets where the ads appeared, the 45 Mbps speed tier is not available to a "majority of consumers."
The agency recommended that where the advertised tier of service is available to less than 50 percent of consumers in the geographical area where the advertising appears, AT&T should modify its advertising to disclose these limitations by using explicit language--e.g., "up to 45 Mbps may not be available in your area."
In addition, NAD looked at whether AT&T's overall speed tiers--including 18 Mbps, 24 Mbps and 45 Mbps--suffer speed degradation in certain circumstances, "and if so, whether AT&T's advertising fails to disclose such speed degradation."
AT&T said in response to NAD that it was "very disappointed, however, with NAD's decision recommending additional disclosures be made regarding theoretical bandwidth reductions for U-verse users engaging in very specific and rare combinations of behaviors … We believe this kind of disclosure overload does not contribute to consumer understanding of the product offering, but rather detracts from it."
AT&T is not the only telco called out for its broadband advertising claims.
Fellow ILECs CenturyLink (NYSE: CTL) and Windstream have faced similar issues. CenturyLink had been asked by the NAD to modify the way it compares its Internet speeds with those offered by Comcast (NASDAQ: CMCSA), while Windstream had to pay $600,000 to settle a suit with the Georgia Governor's Office of Consumer Protection over claims that the service provider did not deliver its advertised DSL speeds to subscribers.
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