Leading U.S. cable multi service operator (MSO), Cablevision System Corp. (CVC), has filed a lawsuit against U.S. wireless behemoth Verizon Communications Inc. (VZ), with the U.S. District Court in Central Islip, NY.
Notably, Verizon had advertised on television, radio and the Internet claiming that its WiFi service is the fastest available. Subsequently, Cablevision sued Verizon, calling its advertising claims related to WiFi connections false and misleading. The company also accused Verizon of designing its advertisements with an aim to deceive consumers and dent Cablevision’s competitive advantage.
Cablevision accused Verizon of basing its fastest WiFi available claim on new network routers given that the former has been offering the same type of router with greater speed much before Verizon. Also, Cablevision pointed out that Verizon does not have a public Wi-Fi hotspot network and has been installing its routers for up to $199.99, which is limited to in-home use.
On the other hand, Cablevision has been providing its in-home Smart Routers to customers free of cost. It also offers a private WiFi network as well as a publicly accessible WiFi hotspot.
Interestingly, Cablevision’s Optimum WiFi network is the nation’s largest WiFi network with 1 million WiFi access points. Also, recently, the cable company unveiled an innovative wireless service on WiFi networks named “Freewheel.”
Freewheel will provide unlimited voice, data and text on Motorola’s Moto G smartphones and the most important feature of this product is its low price. Freewheel will be available for $29.95 per month for new customers, whereas Cablevision’s existing Optimum WiFi network subscribers will enjoy the service for just $9.95 a month.
Cablevision is thus seeking to block Verizon’s marketing campaign and get it to rectify its supposed false advertising claims, while also compensating for damages. Moreover, the company even called Verizon’s alleged false advertising an effort to hinder the launch of its new service as it will allow consumers to evade Verizon’s data limits and undue data overage charges.
However, Verizon rejected Cablevision's allegations and said that the lawsuit is a marketing strategy to advertise Cablevision’s WiFi phone service. It even clarified that a third party has tested and certified that Verizon’s FiOS Quantum Gateway router offers the fastest in-home WiFi accessible from any provider.
Incidentally, this is not the first court battle between the two companies. In 2011, Cablevision had sued Verizon for allegedly running a marketing campaign that misrepresented Cablevision’s Internet speeds and thus misleading its consumers. However, the suit was eventually dropped after Verizon agreed to amend certain portions of its advertisement.
Notably, Cablevision’s Freewheel service, which is to be launched commercially in February, will be the cable TV industry’s first independent venture in the wireless arena. Cablevision’s latest venture might actually pose a major threat and cut into the sales of leading telecom operators, namely, Verizon, AT&T, Inc. (T), Sprint Corp. (S) and T-Mobile US, Inc. (TMUS).
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