NEW YORK (Reuters) - Telephone service provider Verizon Communications (NYSE: VZ) brought its battle for video customers to court on Wednesday, with a lawsuit accusing rival Time Warner Cable of false advertising.
Verizon said Time Warner Cable's TV ads falsely imply that Verizon's FiOS video service requires a satellite dish, that it does not include phone, broadband and video, and that Time Warner's network is better, in a lawsuit filed on Wednesday at the U.S. District Court for the Southern District of New York.
"We feel the lawsuit is without merit, and we look forward to defending against it in the appropriate venue," Time Warner Cable spokesman Alex Dudley said.
Phone companies AT&T (NYSE: T) and Verizon have been developing video services to help them compete better with cable companies Comcast (NASDAQ: CMCSA) and Time Warner Cable, which also sell phone and Web services as well as television.
In the lawsuit, Verizon cited a commercial that started airing on March 3 and said it was the fourth commercial and "most egregiously false" version of an ad that Time Warner Cable, more than 80 percent-owned by Time Warner Inc, started airing around the end of June 2007.
Verizon said it was entitled to an injunction barring Time Warner Cable from running the ads and for a requirement that the cable company issue ads retracting the claims made in the previous ads. The telecom company said it was also looking for damages, including lost profits and a recovery of attorney's fees.
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Time Warner Cable's ads are causing it "immediate and irreparable harm" by attacking the quality and reliability of its network, according to the suit.
"Once customers choose Time Warner over Verizon FiOS, switching costs, inertia and the perceived inconvenience of switching providers keep many customers from changing," according to the lawsuit.
In January, Verizon said it had signed 1 million FiOS subscribers, two and a half years after it started the service. Time Warner Cable said it ended 2007 with 13.3 million basic video subscribers.
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