While Verizon Wireless and AT&T Mobility have settled their differences in the courtroom, agreeing to withdraw mutual lawsuits against one another over their advertising claims, the war on the airwaves continues.  We had some good response to the last round of ads and lots of people dropping by to watch them, so it’s time for another round of fun.  Most of the ads will appear below the page break, so be sure to select Continue Reading… to see the entire article.

In North America, the holiday season is  -the- time of the year to move mobile phone products.  They are a perennial favorite for gift giving and providers know it, so they pull out all of the stops on advertising.  Verizon Wireless upped the ante this year by vilifying AT&T’s 3G coverage areas to gain a competitive advantage.  A clearly stung AT&T has since struck back with Luke Wilson, going all out to challenge Verizon’s map claims with postcards and marbles, as well as a website to de-fang Verizon’s map comparisons.  We’re even back to AT&T taking pot shots at Verizon over those “milky minutes” that expire at the end of the month.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/ATT Marbles.mp4[/flv]

Verizon Wireless is full of marbles in AT&T’s view.  Luke Wilson tries to do damage control over Verizon Wireless calling out AT&T’s 3G map coverage.

… Continue Reading

Luke Wilson's blizzard of postcards

Luke Wilson is back for three more AT&T ads hitting back Verizon Wireless for its 3G map ads, and Apple has come running to AT&T’s defense with two new ads of its own.

The theme?  AT&T’s GSM network lets subscribers talk and browse the web at the same time.  Verizon Wireless’ CDMA network does not.  For that matter, neither does Sprint, which also uses CDMA, but as a non-combatant gets a pass for this round.

Mobile phone networks in the United States primarily use GSM (AT&T, T-Mobile) or CDMA (Verizon Wireless, Sprint, MetroPCS, U.S. Cellular, Cricket) technology.  Because of the way the two standards developed, GSM can permit a customer to talk while also concurrently using mobile data services.  CDMA users must choose one or the other.

The new round of ads exploit that difference.  How important that distinction is depends on how you use your phone.  If you frequently use your AT&T phone to web browse while also speaking to someone on that phone, you would likely find Verizon Wireless’ limitation irritating.  If you don’t, you won’t care.

More importantly, it’s a moot point if you find yourself in one of AT&T’s older EDGE network areas, which predominate outside of major cities.  The EDGE standard doesn’t let you talk and browse at the same time either.

Broadband Reports notes “it seems like AT&T might just be better served by not talking anymore, and just focusing on getting tower sites and backhaul links upgraded. How many upgraded cell sites would Luke Wilson’s salary have paid for? How many backhaul links could have been upgraded with the money spent suing Verizon? Fixing the capacity and coverage issues that have been plaguing AT&T would do more than any ad campaign.”

Apple’s “me too” ads promote the same concurrent use of phone and data applications on the iPhone, but also ignore the pesky fact that those stuck in AT&T’s vast EDGE network will discover it’s a distinction without a difference.

Watch all five ads below.

… Continue Reading

Senator Amy Klobuchar

Senator Amy Klobuchar (D-Minnesota) is expected to introduce legislation this week to protect consumers from excessive early termination fees for ending their cell phone contracts early.

The Cell Phone Consumer Empowerment Act comes a few weeks after Verizon Wireless doubled their cancellation fees November 15 from $175 to $350 for “advanced” mobile phones.

Klobuchar sent a letter to Verizon Wireless President and CEO Lowell C. McAdam, criticizing the company’s decision to increase its Early Termination Fees (ETFs) for new smart phone customers.  Klobuchar also sent a letter to Federal Communications Chairman (FCC) Julius Genachowski, urging a review of the Verizon Wireless decision to raise these fees.

“These fees are anti-consumer and anti-competitive and they bear little to no relationship to the cost of the handset device,” said Klobuchar, a member of the Senate Commerce Committee.

Klobuchar’s bill is anticipated to specifically target Verizon Wireless over its decision to double fees for consumers.  Although the specific details of how the legislation will control fees is still being worked out, Klobuchar’s bill is expected to force providers to incrementally reduce fees for every month of service a customer completes and possibly set a ceiling on the fee charged depending on the retail price of the phone.

Klobuchar introduced a similar bill during the last session of Congress and many cell phone providers responded by pro-rating cancellation fees for departing customers, typically 1/24th of the fee waived for each month a customer stayed with the provider during a two-year contract.  But Verizon Wireless’ decision to double their fee, which could set a new trend in the industry, directly increases prices for consumers, according to Klobuchar.

“Under the company’s new plan, the penalty for leaving the contact halfway through a two-year contract would be $230 – still higher than the $175 ETF Verizon Wireless previously charged for these phones,” Klobuchar wrote to McAdam.

Verizon Wireless is the nation’s largest cell phone service provider.  Verizon customers purchasing an Advanced Device (smart phone) with a one or two year service agreement will be subject to an ETF of up to $350 if they disconnect service prior to the minimum term.  The $350 ETF will decrease $10 for each month of service completed.

The cell phone industry has defended cancellation fees as necessary because providers subsidize the cost of the cell phones sold to consumers.  Customers can purchase phones at the retail price and not be committed to any contract or termination fees.  Some advanced handsets can cost well over $500 if purchased without a contract.

Copies of correspondence to McAdam and Genachowski appear below.

… Continue Reading

A federal judge Wednesday ruled that Verizon Wireless can continue to run its 3G network ads, suggesting they might be “sneaky,” but are not misleading.  U.S. District Court Judge Timothy Batten Sr. told AT&T’s attorneys that their request for a temporary restraining order was denied, but the judge indicated he will hear new arguments in a second hearing on December 16.

AT&T claimed that Verizon’s “There’s a Map for That” ad campaign mislead consumers into believing AT&T provided no service in vast areas of the country because Verizon’s ads depicted non 3G service areas in white, a color that traditionally represents “no service” on many cell phone coverage maps.

Judge Batten said people casually viewing the ads might misunderstand the commercials, but a viewer’s misinterpretation “doesn’t mean they’re misleading.”

“Most people who are watching TV are semi-catatonic,” he said, prompting laughter from the courtroom. “They’re not fully alive.”

AT&T’s apparent backup plan is a new ad of its own, attacking Verizon Wireless with… Luke Wilson.

[flv width=”640″ height=”450″]http://www.phillipdampier.com/video/ATT Ad Luke Wilson.flv[/flv]

Actor Luke Wilson helps AT&T Mobility fire back at Verizon Wireless as the holiday season approaches. (30 seconds)

The effectiveness of Wilson’s spirited defense of AT&T is debatable, judging from early ad reviews.  We spotted one continuity error straight away.  At the 0:15 second mark, notice the “Access to over 100,000 apps” box is already filled with an “x” before Wilson turns to the board to fill it.  The “x” is there before it’s gone and back again.  Perhaps it’s an unintentional homage to the frustration experienced by AT&T-exclusive iPhone application developers not getting approval for applications previously approved.

AT&T Mobility wanted Verizon Wireless to stop showing ads that call out the differences between the two wireless competitors’ national 3G networks.  When Verizon didn’t, AT&T sued.  This week Verizon Wireless doubles down with three new holiday season ads that are guaranteed to enrage AT&T even further.

Anyone who has seen a Rankin/Bass holiday special will instantly recognize at least one of the ads is a play on the Island of Misfit Toys, seen in the 1964 holiday classic Rudolph, the Red-Nosed Reindeer.

[flv width=”620″ height=”380″]http://www.phillipdampier.com/video/Verizon Wireless Verizon Misfit Toys Ad.flv[/flv]

Verizon Wireless – “The Island of Misfit Toys” (30 seconds)

AT&T accuses Verizon Wireless of misrepresenting its national data coverage by showing non-3G areas in white, a color AT&T says traditionally represents no service at all.  AT&T says its wireless data network, in its entirety, is more expansive than Verizon’s.  Verizon counters its ads only compare 3G coverage, and clearly label the maps as such, including a fine print disclaimer indicating “voice and data services available outside 3G coverage area.”

AT&T further argues watching frustrated consumers shaking their phones or sitting alone because they were unable to meet up with their friends would suggest to a casual viewer they weren’t able to access any service.

[flv width=”620″ height=”380″]http://www.phillipdampier.com/video/Verizon Wireless Blue Christmas Ad.flv[/flv]

Verizon Wireless – “Blue Christmas” is sure to draw the ire of AT&T as a frustrated father visibly shakes his iPhone and never seems to be able to use it. (30 seconds)

Verizon Wireless’ attorneys officially responded to the AT&T request for a temporary restraining order to pull the ads off the air with a direct opening: “AT&T did not file this lawsuit because Verizon’s ‘There’s A Map For That’ advertisements are untrue; AT&T sued because Verizon’s ads are true and the truth hurts.”

The attorneys argue, “Remarkably, AT&T admits that the 3G coverage maps — the one thing that is common to all five ads — are accurate and that the ads’ express statement that Verizon has ‘5X More 3G Coverage’ than AT&T is true.”

AT&T has been one of the loudest voices in this advertising battle, spending many millions of dollars to market its 3G network as the “Nation’s Fastest 3G Network” and, with its exclusive partner Apple, naming the latest iPhone (only available on AT&T’s network) the “iPhone 3GS.”

The stark truth, as revealed by the concededly accurate coverage maps in Verizon’s advertising, is that the geographic reach of AT&T’s 3G network is far less extensive than AT&T would have the public believe — and far less extensive than Verizon’s 3G network. Consumers who are interested in smartphones have a strong interest in knowing the comparative 3G coverage offered by Verizon and AT&T.  Cutting off the free flow of information about Verizon’s more extensive 3G coverage would harm consumers in a way that could not be redressed.  And because injury to First Amendment rights is by definition irreparable, suppressing Verizon’s speech on an “emergency” basis before a definitive and fair adjudication would irreparably injure Verizon and its goodwill in addition to costing Verizon customers. Any harm to AT&T, in contrast, is merely speculative.

In the final analysis, AT&T seeks emergency relief because Verizon’s side-by-side, apples-to-apples comparison of its own 3G coverage with AT&T’s confirms what the marketplace has been saying for months: AT&T failed to invest adequately in the necessary infrastructure to expand its 3G coverage to support its growth in smartphone business, and the usefulness of its service to smartphone users has suffered accordingly. AT&T may not like the message that the ads send, but this Court should reject its efforts to silence the messenger.

[flv width=”620″ height=”380″]http://www.phillipdampier.com/video/Verizon Wireless Elves Ad.flv[/flv]

Verizon Wireless – “Elves” includes the line “good luck browsing the web with that one.” (30 seconds)

AT&T has gone all out to find confused consumers to back up their request for a temporary restraining order, running a survey asking ordinary cell phone users what they thought Verizon Wireless’ ads meant.  But Verizon Wireless answers the survey wasn’t limited to smartphone customers, who are already well aware of the differences between 3G and older, slower speed data networks, and for that reason the results are invalid.

Verizon Wireless says it will continue the aggressive campaign beyond the all-important holiday season, when cell phone handset sales are at some of their highest traditional levels.