AT&T Missteps With Verizon Ad-Claim Lawsuit

Experts Say Carrier's Move Risks Conviction in Court of Public Opinion

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SAN FRANCISCO ( -- AT&T's lawsuit against Verizon is a case of what not to do when a rival kicks you in your sorest spot.

Last week, the company filed what marketing experts said was an ill-advised legal complaint alleging Verizon's "there's a map for that" campaign is misleading consumers into thinking that they won't get AT&T wireless service in large swaths of the country. The spot shows Verizon's coverage depicted by red dots that blanket the U.S. map, and AT&T's by sparse, blue-dotted clusters filled in by lots of white space.

"A lawsuit should be one of the last tools you use," said Gene Grabowski, senior VP of Levick Strategic Communications. "If you overreact and lose the injunction, you look weak."

While AT&T claims the commercial is costing it market share, the No. 2 carrier has certainly taken publicity beatings over its spotty network service this year, and marketing pundits believe the suit will only put a further spotlight on its strained network. As exclusive carrier of the iPhone, AT&T has been overwhelmed by smartphone data usage. It doesn't dispute Verizon's claim about its 3G coverage, but takes issue with the white areas on the map that it says imply AT&T provides no wireless service there.

Experts said that while there's a time and place for legal tactics, this wasn't one of them. "All they've done is draw attention to something that probably would have cycled and died on its own, especially with the Droid rollout," said Bruce Hennes, managing partner of Hennes Paynter Communications, referring to the widely hyped smartphone that went on sale at Verizon on Friday.

Overriding message
Consumers are unlikely to scrutinize the lawsuit's fine print, but many will likely walk away thinking that AT&T has network problems as the operator has thrust the issue into the limelight. "The lawsuit itself is a bit inside baseball for most consumers, but what will resonate is that AT&T doesn't have the best coverage," Mr. Hennes said.

AT&T's actions could also backfire in terms of consumer perception. "It smacks of being desperate, and the consumer reaction will be that AT&T doesn't really have that good a product; so it has to resort to legal means," said Marc Hausman, CEO of Strategic Communications Group.

Indeed, a good chunk of online commentary asked why AT&T isn't funneling the money it was spending on its legal bills into building a better network.

Short of a long-term fix, AT&T might have fired back with a counterattack campaign that was creative and fun, experts said. After all, Verizon poked fun at iPhone's "there's an app for that" and AT&T could have kept the joke going at Verizon's expense.

AT&T may indeed be cooking up a response, with one person close to the company saying the carrier is now discussing a possible counter-campaign.

When should you sue on a competitive claim?

There really are just two instances that call for the courts, according to Marc Hausman, CEO of Strategic Communications Group. One occurs when a larger player faces a serious competitive threat from an innovative but smaller, less well-financed rival. A suit can stop the latter fast in its track because it doesn't have the deep pockets to defend itself. Legal action is also warranted when a company wants to call attention to an issue so important that litigation is the only venue that can attract any real mind share.

Legal recourse could also be an option when a brand has to defend its reputation, and wants to make a statement that sends a message not only to customers, but vendors, regulators, and the government, said Scott Sobel, president of Media and Communications Strategies. But avoid suing on an issue that could potentially call attention to your weakness, as AT&T did.

Also be careful not to file a frivolous suit, Mr. Sobel said. "Suing for the sake of suing is a bad idea; it sends a message that you're litigious, petty and you don't have the consumers' interests in mind."

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