AT&T's lawsuit over Verizon ads could backfire, some argue

But others see lawsuit as necessary, partly to satisfy regulators

AT&T's lawsuit against Verizon Wireless over its TV ads could be a public relations mistake, some analysts said today, buy at least one other said the company had to bring the lawsuit to protect itself again potential regulatory or legal actions.

Some experts said the lawsuit brings into focus a perception by some, and in particular iPhone customers, that AT&T's network is inferior to Verizon's. An opposing view is that AT&T had to file a lawsuit, partly to satisfy regulators and also to head off a potential class-action lawsuit by unhappy customers. Yet another expert said the only backlash AT&T faces is if the company loses the suit.

AT&T filed the lawsuit Tuesday in federal court in the Northern District of Georgia, claiming that Verizon's "There's a map for that" TV ads are misleading. AT&T claims the ads lead viewers to believe that areas shown on a map in white, and that are outside of the fast 3G service area, are without wireless coverage entirely. Verizon said through a spokeswoman Tuesday that the ad maps are accurate and clearly indicate in text that the white areas on the map are outside of 3G, and not entirely without coverage.

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AT&T's lawsuit against Verizon Wireless over its TV ads could be a public relations mistake, some analysts said today, buy at least one other said the company had to bring the lawsuit to protect itself again potential regulatory or legal actions.

Some experts said the lawsuit brings into focus a perception by some, and in particular iPhone customers, that AT&T's network is inferior to Verizon's. An opposing view is that AT&T had to file a lawsuit, partly to satisfy regulators and also to head off a potential class-action lawsuit by unhappy customers. Yet another expert said the only backlash AT&T faces is if the company loses the suit.

AT&T filed the lawsuit Tuesday in federal court in the Northern District of Georgia, claiming that Verizon's "There's a map for that" TV ads are misleading. AT&T claims the ads lead viewers to believe that areas shown on a map in white, and that are outside of the fast 3G service area, are without wireless coverage entirely. Verizon said through a spokeswoman Tuesday that the ad maps are accurate and clearly indicate in text that the white areas on the map are outside of 3G, and not entirely without coverage.

AT&T is seeking an emergency injunction to stop the ads, arguing that they are causing AT&T to lose "incalculable market share" and customer goodwill. It is also seeking unspecified monetary damages.

The Verizon ads on their own would not have focused the public on AT&T's perceived network weaknesses, as much as the AT&T lawsuit has, three experts said.

"I think AT&T has a good point about the Verizon ads, but unfortunately by filing the lawsuit, they are showing their shortcomings," said Gene Grabowski, a crisis communications consultant at Levick Strategic Communications in Washington. "The lawsuit brings [network coverage] to a higher level of scrutiny."

On a personal level, Grabowski said he recently bought a BlackBerry device on AT&T's network and that the device works well. When the ads started airing in October, Grabowski said he perceived them as "just ads." He focused more intently on the claims when the lawsuit was described in the media, and was left concerned about AT&T's network as a result.

Similarly, Rob Enderle, an analyst at Enderle Group added, "If I were AT&T, I would have let this go. If you have a superior network offering, then a lawsuit makes sense, but AT&T is already inferior and may give Verizon's campaign more power as opposed to detracting from it."

Jack Gold, an analyst at J. Gold Associates, added that the lawsuit was a "no win for AT&T" and will be costly. "AT&T already has had a bad rap with 3G, and this will make things worse."

However, IDC analyst Scott Ellison said AT&T had to bring the lawsuit over the ads, in part, to satisfy government regulators that monitor AT&T's network performance to make sure it holds up to AT&T's claims on the network.

"The AT&T lawsuit is not going to matter for consumers, but AT&T is doing this for people at the Federal Communications Commission and the Federal Trade Commission, because AT&T needs to counter a perception that AT&T is selling something it can't deliver," Ellison said.

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