I knew this was coming

http://www.chron.com/cs/CDA/story.hts/business/1027193


Southwestern Bell sued over anti-cable ads


Associated Press

ST. LOUIS - Charter Communications, among the nation's largest broadband communication companies, has sued Southwestern Bell, accusing the telephone company of misleading advertisements about cable modem Internet service in a fiercely competitive segment.

St. Louis-based Charter, which provides cable television and high-speed Internet to homes nationwide, seeks a halt to Southwestern Bell's "Cable Modem Slowdown" ad campaign promoting the telephone company's digital subscriber line, or DSL, high-speed Internet service.

Charter's lawsuit filed Tuesday in U.S. District Court alleges that the television, radio and newspaper ads falsely suggest that cable modem Internet service slows down during peak usage hours -- and that DSL does not.

"The truth is that cable modem speeds are not affected during peak Internet usage times any more than their DSL service speeds are," said Curt Shaw, Charter's senior vice president, general counsel and secretary.

Southwestern Bell on Tuesday defended the ads, which on TV and radio show parents counseling children to use a cable modem in the wee hours to avoid "cable modem slowdown."

"It's generally understood that cable modem service architecture is a shared network, and shared networks certainly can slow down during peak usage," said Selim Bingol, a spokesman for Southwestern Bell parent SBC Communications Inc., based in San Antonio.

"The ads are to educate consumers about that."

Bingol declined to discuss the lawsuit at length because SBC had not yet seen a copy of it. Still, he accused Charter of trying to "really limit the information consumers have when making decisions about their broadband choices."

The ads do not mention Charter by name, though Charter alleges that its customers "clearly understand that the false and misleading (ads) refer to Charter's Internet services" to "disparage Charter's services and compete unfairly."

The questioned ads perhaps attempt to blunt "the success we've achieved in our rollout of high-speed cable modem Internet service," Shaw said. Charter had about 400,000 customers for cable modem Internet service by the end of June and expects to serve more than 550,000 data customers by this year's end, he said.

"Southwestern Bell won't compete on a level playing field, so they've resorted to deceiving consumers by making false statements about cable modem Internet service," Shaw said.

Barring Southwestern Bell voluntarily halting its ad campaign, Charter seeks an injunction that discontinues the questioned marketing, as well as unspecified damages for business Charter has lost because of the ads at least run regionally in recent weeks, Charter spokesman Andy Morgan said.

Charter, nation's fourth-largest cable television company, provides video, Internet and other advanced technology services to roughly seven million customers in 40 states.
Southwestern Bell is Missouri's largest local telephone service provider with about 3.7 million lines, or 73 percent of the total, according to the state's regulatory Public Service Commission.