Filed under: Products and services, Law, Consumer experience, Competitive strategy, Marketing and advertising, Verizon Communications (VZ), Time Warner Cable (TWC)

Verizon (NYSE:VZ) states that Time Warner Cable (NYSE:TWC) is lying in its advertising. According to The Wall Street Journal, “Verizon states that Time Warner Cable’s ad implies FiOS requires a satellite dish for TV service and that it isn’t able to bundle together high-speed Internet, video and phone calls.”

The problem, of course, is much deeper than one ad. Verizon has spent $23 billion to put fiber in front of its 18 million customer homes. In the process it hopes it can take TV and high-speed Internet customers away from cable companies and satellite Television firms. If the product does not do well, there will be hell to pay in the Verizon executive suite.

Cable company stocks have fallen over the last three quarters, to a large extent due to the fear that they now have real competition for packages for voice, Television, and broadband, known fondly as the “triple play”. Verizon does not have to get a massive number of cable customers to switch to do some real P&L damage. Early indications are that consumers like the fiber service. Because it can deliver more bandwidth it can offer more massive numbers of HD channels.

The court fight over the ad makes for nice newspaper copy, but the real fight ends up being one for shareholder value. Time Warner Cable’s stock is down 30% in the last year.

Douglas A. McIntyre is an editor at 247wallst.com.

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This entry was posted on Friday, April 11th, 2008 at 2:57 pm and is filed under Products and Services. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.