07.15.1996|Corporate

GTE files suit against AT&T; to stop false, misleading advertising aimed at creating customer confusion


IRVING, Texas -- GTE today filed a lawsuit in federal court in Dallas to stop a negative advertising campaign against the company by AT&T.;

The lawsuit charges that AT&T; ads attacking the reliability of GTE's long distance network and claiming an AT&T; "guarantee" for long distance are false and misleading. The lawsuit cites damage to GTE's reputation for network quality and reliability, and states that the ads constitute unfair competition on the part of AT&T; by "spreading confusion and deceit in the marketplace" as the two companies compete head-to-head for long distance customers in the states of Florida, Texas, Washington, and elsewhere.

GTE is asking the court to order AT&T; to stop the advertising, to issue a public apology and retraction, to pay GTE expenses and to award GTE damages for the injury to the company's reputation and goodwill with its customers.

The AT&T; ads began shortly after GTE introduced long distance service in Dallas, Seattle and Tampa, Fla. The ads claim that GTE's long distance network is not as reliable as AT&T;'s in the categories of calls completed on the first try, 800 number calls and outages. The radio, television and newspaper ads also claim that "only AT&T;" guarantees its long distance service.

"These ads are clearly false and misleading," said Richard Cahill, vice president and general counsel of GTE Telephone Operations. "The networks that GTE uses for its local and long distance calls deploy state-of-the-art technology and are nearly flawless in their performance. For instance, in the area of 800 number calls, there are no significant differences between GTE and AT&T.; Both companies successfully connect well over 99.8 percent of these calls on the customer's first try. There is no justification in fact for the claims AT&T; is making in their ads.

"Worst of all, AT&T; is using these false claims to confuse customers," Cahill added. "We view this not only as deceitful but as anti-competitive as well."

GTE entered the long distance market on March 4 within a month of the passage of the Telecommunications Act of 1996--making it the first of its peers to offer one-stop shopping for local and long distance service. Currently, GTE has a quarter of a million long distance customers, and is acquiring new ones at the rate of 6,000 per day. It offers long distance in 16 states and is on track to roll out the service in all 28 states where it currently offers local service by the end of the year.

GTE, with annual revenues of $20 billion in 1995, is one of the largest publicly held telecommunications companies in the world. It also is the largest U.S.-based local telephone company and a leading cellular service provider--with wireline and wireless operations that form a market area encompassing about a third of the nation's population.

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