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With 3G ad lawsuits pulled, so too are punches to AT&T's eye

Battle has underscored need to bolster networks to keep up with data-hungry apps

December 2, 2009 08:04 PM ET

Computerworld - Attorneys for AT&T and Verizon Wireless agreed today to drop two federal lawsuits over Verizon advertising about its 3G network.

As a result, AT&T avoids getting an even bigger black eye from iPhone users, who have hit the company with complaints about inadequate network coverage. AT&T is the exclusive carrier of Apple's popular iPhone.

Analysts said AT&T's failure in November to win a temporary restraining order from a U.S. district court judge in Atlanta was a sign of how thin its central argument was. AT&T was claiming Verizon's "There's a map for that" ads were misleading by showing 3G coverage maps that used white space outside of AT&T's 3G coverage areas, which implied there was no coverage whatsoever outside of the 3G areas.

Verizon did respond to a request by AT&T to clarify that issue, and started using words at the end of its slew of different ads that read, "voice and data services available outside 3G coverage area."

After that language was added, AT&T's main issue at court seemed even thinner, analysts noted.

IDC analyst Scott Ellison today said that AT&T's position was simply "not defensible" especially since regulators and judges are well aware of AT&T's network deficiencies. Ellison had previously said AT&T has "immolated itself with network capacity issues" especially in crowded urban areas.

The thinness of AT&T's case in the Atlanta court indicated that AT&T "didn't have a prayer of winning," added analyst Jack Gold of J. Gold associates.

While the federal case in Atlanta drew all the attention, there was a second lawsuit that was dismissed today by both companies, according to court records. The second was before a federal district court in New York, filed originally in July.

In the New York case, Verizon was arguing that its advertising slogan of having "America's Most Reliable 3G Network" did not violate a federal law for advertising truthfulness. Verizon filed the lawsuit against AT&T on July 27 after AT&T had filed a challenge on July 1 of Verizon's advertising slogan (and related ones) before the national advertising division of the Council for Better Business Bureaus.

Even though it avoided a second black eye or further injury to itself by withdrawing its lawsuit filed in Georgia, AT&T's filing of that lawsuit helped provoke what may be recorded as one of the fiercest, and funniest, spates of TV ads ever.

After Verizon's first ads aired in October, AT&T reacted by airing its own TV ads with actor Luke Wilson defending its network coverage, and Apple even backed AT&T's network capability for the iPhone in separate ads.

More recently, Verizon kept up the pace and attacks on AT&T with several 3G coverage ads on a Christmas theme, most notably one that invokes "Misfit Toys" and a "Dolly for Sue", who say that the iPhone with AT&T 3G will fit in well in their dysfunctional world. Following up the Christmas ad series, Verizon last week released another that features reindeer.

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