AT&T, Verizon drop 3G advertising lawsuits

The legal spats between AT&T Mobility and Verizon Wireless over 3G claims appear to be over as the two agreed to drop claims in federal courts in Georgia and New York, according to legal filings.

The high profile lawsuit AT&T filed against Verizon over its "There's a Map for That" ad campaign that shows Verizon with five times more 3G coverage than AT&T in a side-by-side map was dismissed in Georgia. AT&T argued the ads are misleading because viewers might be led to believe that AT&T does not have any coverage in the white spots on AT&T's map. Last month the judge in that case denied AT&T's request to issue a temporary restraining order that would have forced Verizon to stop showing the ads.

The two companies also dropped a lawsuit filed in July. In that case, Verizon asked a judge to determine whether its "America's Most Reliable 3G Network" ads are truthful, a claim AT&T said is misleading. Verizon filed the lawsuit in response to AT&T's claims that Verizon's advertising was false and could not be supported.

A Verizon spokesman declined to comment on the dismissal of the case in Georgia. An AT&T spokeswoman declined to comment on the cases.

Interestingly, the move comes at the same time Consumer Reports released a new survey that ranks AT&T Mobility the lowest in customer satisfaction in 19 out of 26 cities, while the company's major competitor Verizon Wireless ranked highest in all of the 26 markets.

Respondents gave low marks to AT&T's service in New York and San Francisco--where subscribers, particularly iPhone users, have previously complained--as well as in Atlanta, Cleveland, Houston and other areas. The publication surveyed 50,000 readers in 26 U.S. cities.

"Apple's iPhones are the top smart phones in our ratings--actually, among the best of all phones we tested, period--but their exclusive carrier, AT&T, was middling at best in satisfaction," Consumer Reports said. "If you're readying to buy Apple's phone, prepare for possible disappointment with its service and expect to love the phone anyway."

In response, AT&T said it appreciated and valued customer feedback, according to a statement it provided to the Wall Street Journal's AllThingsD. "We learn from it, and it helps us serve our customers better. Without question the surest indication of customer satisfaction is churn, or turnover. For the last quarter, our postpaid churn was just 1.17 percent."

AT&T has previously acknowledged difficulties in meeting the data demands of iPhone users and has been upgrading and enhancing its network to increase capacity.

Pali Research analyst Walter Piecyk wrote in a research note that it is becoming a "familiar juxtaposition" for Verizon and AT&T to be on opposite ends of the satisfaction spectrum. "While we recognize the shortcomings of each of these surveys individually, we believe the consistency of AT&T's ranking and the numerous press reports cataloging its network problems present a looming problem for a company that we believe has become over-leveraged to the iPhone," he said, noting AT&T replaced Sprint Nextel at the bottom of this year's Consumer Reports survey.

For more:
- see this Pali Research post [1] (sub. req.)
- see this AllThingsD blog post [2]