🔒CT telecom giants wage legal battle over ‘misleading’ ads

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With their respective headquarters just 12 miles apart in Norwalk and Stamford, Frontier Communications and Charter Communications are practically neighbors. But any closeness appears to end there.

Tension between the two companies over what each is saying publicly about the other has spilled into public view in a New Haven federal court house.

That's where both telecom giants are suing each other over allegedly false advertising claims.

Frontier, which also has a major Hartford presence, filed suit June 20, accusing Charter of commissioning radio ads and print mailers that made false and disparaging statements about its internet, television and telephone offerings.

Frontier claims the ads began appearing in California and Texas last month, containing untrue statements about its internet speeds and pricing, which are causing the company to lose customers and suffer economic harm. Charter's ads, the suit says, also contained the phrase “ripped off by Frontier.”

Charter, which moved its headquarters from St. Louis to Stamford after receiving a $6.5 million forgivable loan from the state in 2012, responded last week with a countersuit containing similar allegations against Frontier, accusing its rival of false advertising in violation of the federal Lanham Act and Connecticut's Unfair Trade Practices Act.

Charter's allegations pertain to portions of Frontier's website, which provides comparisons between both companies' various offerings. Charter says the comparisons contain “false boasts” about Frontier's own product capabilities and “false claims” about Charter's.

In addition to damages and other penalties, each company has asked the judge for preliminary and permanent injunctions.

Asked for comment last week, Frontier said: “Charter's recent ad campaign is false and misleading and does not accurately portray the competitive, high-quality products and services that we provide our customers. We owe it to our customers, employees, and shareholders to defend ourselves against false attacks such as this and to ensure that our products and services are honestly and fairly represented at all times by all parties.”

Charter said it would not comment directly on the suit.

“However, these are competitive markets, we believe in our products and services and we're going to compete to bring in more customers,” Charter said.

Legal action common

Telecom providers are big advertisers, and they haven't been shy about suing each other — or at least threatening to — over the contents of commercial speech.

Frontier, for example, issued a cease-and-desist order against Comcast in 2011 over billboards that claimed Frontier would “pull the plug” on its FiOs products it had previously acquired from Verizon, according to reporting by FierceTelecom.

In recent years, Verizon and Cablevision settled several lawsuits related to false claims about internet speeds.

And in 2009, AT&T sued Verizon over using a wireless coverage map in a television ad that AT&T argued was misleading. It dropped its lawsuit later that year.

The latest battle between Frontier and Charter stems from new territories and customers both have picked up recently through major acquisitions in multiple states.

California and Texas — the targeted geography of Charter's ads, Frontier's suit says — are two states where those interests have overlapped.

In April, Frontier closed its $10.54 billion acquisition of Verizon assets in California, Texas and Florida. The deal included 5.4 million voice and broadband subscriber connections, landline operations and 1.2 million FiOS television subscribers.

The following month, Charter completed a much larger $67 billion acquisition of Time Warner Cable and Bright House Networks, making it the second largest cable provider in the country behind Comcast. California and Texas were among the states where the deal gave Charter an increased presence.

Charter's countersuit acknowledges the heightened competition.

“Charter competes with Frontier for customers in locations throughout the United States,” it reads. “This competition has intensified in recent months since Frontier acquired new networks and customers from Verizon in California and Texas.”

Each company's allegations take aim at specific claims that appeared in advertising and online.

For example, Frontier identified a Charter ad it says made the claim that one of Charter's internet tiers (60 megabits per second) was “10x faster than Frontier's.” Frontier rebuts that claim, saying its base-level internet speeds in California and Texas are 50 Mbps with maximum speeds of up to 500 Mbps.

Charter takes issue with a claim on Frontier's website that says Charter internet speeds “slow to a crawl” during busy traffic times, while Frontier's internet service does not. In the suit, Charter says that claim has been disproven by annual performance testing conducted by the Federal Communications Commission.

“The FCC's most recent testing demonstrates that Charter delivers the internet speeds it advertises with rare exceptions, whereas Frontier generally does not,” Charter wrote.

CT similarities

While Frontier's Verizon deal is much larger than its $2 billion purchase of AT&T's Connecticut wireline business and fiber network in Oct. 2014, there are similarities.

Following the Connecticut deal, hundreds of former AT&T customers filed complaints with state regulators about outages and other problems, which ultimately spurred Frontier to issue refunds.

The situation has been somewhat similar in California, Texas and Florida, according to media reports about customer complaints in the wake of the April switchover.

One of Charter's ads cited in Frontier's lawsuit takes aim at customer complaints about Frontier's call center.

“[U]nlike Frontier, our helpful agents will answer your call,” one ad cited by the suit said.

Frontier wrote that its customer service reps “are based entirely in the United States” and “are in fact both helpful and answer customer calls.”

Frontier's Connecticut deal also led to an advertising surge from in-state competitors, including Cox and Comcast, some of which seized on negative media coverage of Frontier's system switchover.

“Ready for better business Internet without disruption?” one Comcast ad asked.

No lawsuits, however, were filed over the Connecticut advertising.

Frontier and Charter are due back in court by mid-September, unless they settle the dispute on their own.

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