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Charter cites false and misleading ads in lawsuit

Tue, 08/28/2001 - 8:00pm
Anne Kerven

In the latest showdown over use of the term "shared network," Charter Communications Inc. is challenging Southwestern Bell Telephone's "Cable Modem Slowdown" ads. In a lawsuit filed in a Missouri District Court, Charter alleges SBT has perpetrated a false advertising campaign.

Charter says the Bell is violating the federal Lanham Act, regarding truth in advertising, and says it violates Missouri common laws regarding preventing injurious falsehoods and illegal and unfair competition.

"We do not claim they have violated a statute," says Charter spokesman Andy Morgan. Common laws are those stemming from judicial decisions.

Regardless, Charter says it wants SBT to stop the campaign. Morgan would not comment on whether Charter might settle for a clarification.

"Our argument is that the advertising is not true," says Morgan. He adds that there is no verified data that cable grows slow. "It's a myth created by Southwestern Bell and SBC," he says. Southwestern Bell is a division of SBC Communications.

The crux of the argument is that all data networks are shared, but in different places. Morgan tells CEDaily that Charter guarantees its speeds on its systems, but once someone moves out to the Internet, traffic can slow, regardless of whether the customer uses cable modems or DSL. "We manage our bandwidth, so there's no Web hogs," he says.

SBC spokesman Selim Bingol would not comment on details but says cable is a shared network and, as such, slows during peak use.

He also calls the lawsuit "another attempt by cable companies to control the broadband marketplace completely." Cable is an unregulated monopoly, he adds, and isn't subject to regulations of DSL.

Cable's control of the market is so complete, he continues, that some places are refusing to accept DSL advertising completely. Cable is "able to keep competitors' voices quiet," he says.

Bingol would not say if the ads will stop, but did say SBC will respond to the lawsuit and defend itself "vigorously."

"Hmph," Morgan says. "It's pretty obvious we don't have a monopoly on high-speed Internet." Both systems are growing fast, he says.

What happens if SBC doesn't stop?

"Eventually something will happen," Morgan says. "A trial date will be set."

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