NAD's Latest Telecom Denigration Crackdown

In the latest of a string of heated telecom advertising disputes, the National Advertising Division (NAD) delivered a victory to T-Mobile US, Inc. ("T-Mobile") in its challenge of claims made by Charter Communications Inc. ("Charter"). Charter's claims involved a series of television commercials and website advertising insinuating that T-Mobile's home internet service was slow, spotty, and glitchy—and more generally an untenable option for a typical family. T-Mobile alleged that these claims were false and denigrating. NAD, unsurprisingly, agreed with the challenger.

NAD's Charter case is reminiscent of a slew of other recent telecom cases involving denigrating depictions of competing internet services. Readers may recall, for example, NAD's Xfinity decision issued earlier this month. There, NAD recommended that Comcast modify its Xfinity commercials that depicted a competing internet carrier as slow, unreliable, and prone to subpar performance. The same result arose in Charter Communications, Inc.'s own challenge of Frontier Communications' FiOS Internet Service in 2019. In that case, NAD recommended the discontinuation of commercials that depicted similarly far-fetched scenarios that depicted FiOS as slow, glitchy, and difficult to use.

The outcome in Charter was no different. NAD once again emphasized that when highlighting the shortcomings of competing products, advertising must be truthful, accurate and narrowly drawn. Charter's commercials did not meet this bar.

The first Charter commercial ("Game Time") starts with a disclosure that the time is 7:10 pm and shows a small group of men watching a basketball game. Another man, whose appearance is heavily pixilated, enters the scene to ask about the score of the game. When asked by the host why the pixilated man was unable to watch the game in his own home, the pixilated man complained that his "T-Mobile home internet was glitchy." The host responds that the pixilated man should "bench his spotty service and switch" to Spectrum's home internet service. T-Mobile, not surprisingly, called this false denigration. Charter attempted to defend its depictions on the merits, pointing to T-Mobile's own statements that T-Mobile internet services may be impacted during peak hours or when the network is congested and that by showing the commercial was set at 7:10 pm, Charter claimed to be depicting T-Mobile's internet during peak hours.

NAD disagreed. It noted that there was no evidence that a T-Mobile customer would be unable to stream a basketball game, even during times of congestion, and as such, Charter's statements in the Game Time Commercial were inappropriate. And even though Charter included a disclosure of the time to symbolize peak hours, NAD found that disclosure to be insufficiently clear and conspicuous—and in any case, failing to effectively communicate that the portrayal of T-Mobile internet service was during peak hours. NAD recommended that Charter discontinue the express claim that T-Mobile's home internet service provided "spotty service" and is "glitchy" and modify the commercial to avoid stating or implying that T-Mobile's home internet service would prevent customers from enjoying streaming.

The second Charter commercial ("Move Out") depicted a family of five conversing about their T-Mobile home internet. The father states that because their "new T-Mobile home internet...slows down when [they] are all online" one of the members of the family should move out because there is not enough speed for all five of them. T-Mobile argued that Move Out falsely claimed that T-Mobile's home internet is not a workable option for a typical family because it is too slow for all members of the family to simultaneously use the internet at any time of the day. Charter again attempted to defend its advertising on the merits, submitting speed consistency data showing that T-Mobile home internet users' speed decreases during the peak hours of 7 pm - 10 pm. Charter also noted its text disclaimer which stated that home internet customers may notice reduced speeds during network congestion. Nonetheless, NAD found the messaging to be overly broad because it did not limit the depiction of slower internet use to be during peak hours. NAD noted that the family was sitting around the table during daylight and that there was no other reference to the time of day during which the scene took place. It found, therefore, that the Move Out Commercial implied that T-Mobile's internet service was always at a reduced speed. Nor was NAD persuaded by Charter's disclosure, which it noted appeared in a small font, was not easily noticeable, and only remained on screen for three seconds. (The disclaimer itself was also inaccurate because it stated that peak times were 7 pm - 11 pm rather than the correct time of 7 pm - 10 pm.) For these reasons, NAD recommended Charter modify its Move Out Commercial to limit the message and claims about slower internet speed to clarify that the slower speed is only during peak congestion times.

The result here is far from surprising, but it's yet another reminder of NAD's low tolerance for denigration in the telecom industry and beyond. Whether Charter could retool its commercials in a way that remains compliant with NAD's decision is a question for another day. For now, carriers should tread carefully when depicting the competition.

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