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UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK, OS & CELLCO PARTNERSHIP d/b/a VERIZON Civil Action No. WIRELESS, Plaintiff, | v. COMPLAINT FOR DECLARATORY RELIEF AT&T MOBILITY LLC, eC Defendant. Plaintiff Celleo Partnership d/b/a Verizon Wireless (“Verizon Wir complaint against Defendant AT&T Mobility LLC (“AT&T”) alleges as follows: SUMMARY AND NATURE OF THE ACTION 1. This is an action for a declaratory judgment that Verizon Wireless’s advertising claims of having “America’s Most Reliable 3G Network,” “America’s Best 3G Network,” and “America’s Most Reliable Wireless Network” are truthful, accurate, and substantiated, and do not violate the Lanham Act, 15 U.S.C. § 1051 et seq. 2. 3G wireless networks are networks that incorporate the third generation of standards for wireless communications defined by the International Telecommunications Union. Included among those standards are data speeds of 384 Kbps for outside stationary use or walking speeds. Clint Smith & Daniel Collins, 3G Wireless Networks 137 (2002). 3. The meaning of “America’s Most Reliable 3G Network” as used in Verizon Wireless's advertising is the most reliable national network in America that meets the standards ewvork 7272172) for a 3G wireless network, including the minimum data speed of 384 Kbps for outside stationary use or walking speeds 4, A standard measure of reliability in the wireless telecommunications industry combines two factors: (1) the ability to connect to the network (connection success or accessibility); and (2) the ability to complete a task (e.g., complete a voice call, download a file) once connected (session reliability or retainability). This is the accepted industry standard for ‘measuring wireless voice reliability and is an appropriate standard for 3G wireless network reliability as well 5. Intemal studies, as well as independent third-party studies, confirm that when measured by that standard of reliability, Verizon Wireless provides to consumers the most reliable 3G wireless telecommunications service among all national U.S. wireless network providers. 6. Verizon Wireless also seeks to promote and communicate through its “most reliable” adver ing the fact of its investment in and commitment to the reliability of its service and network in times of crisis, such as during natural disasters and national or regional emergencies, and the superior performance of its network during such times has been empirically proven, Consequently, Verizon Wireless truthfully and accurately promotes its network’s superiority by advertising to consumers that it has “America’s Most Reliable 3G Network,” “America’s Best 3G Network,” and “America’s Most Reliable Wireless Network.” 8 On July 1, 2009, AT&T, one of Verizon Wireless’s competitors in the wireless telecommunications industry, filed a challenge with the National Advertising Division of the Council for Better Business Bureaus (“NAD”), alleging that Verizon Wireless’s advertising Newyork 2578) 2 claims of having “America’s Most Reliable 3G Network,” “America’s Best 3G Network,” and “America’s Most Reliable Wireless Network” are false, misleading, and unsubstantiated. AT&T asserts in its NAD challenge that—contrary to the plain meanings of the words—speed beyond that required to qualify as a 3G wireless network is an essential component of reliability of a 3G network. In its NAD challenge, AT&T has invented a new formula for calculating “reliability” and claims that by applying this newly concocted formula its 3G wireless network has superior “reliability.” AT&T's claim that speed is an essential component of 3G network reliability and ‘that its formula is the proper standard for measuring 3G network reliability is without any support whatsoever and is at odds with AT&T’s own advertisements in which AT&T claims to have the “Nation’s Fastest 3G Network,” confirming that speed is a network attribute distinet from reliability. 9. AT&T's assertion that Verizon Wireless’s advertising claims are false because speed is an essential attribute of reliability for a 3G wireless network is unsupportable. Neither the normal and customary usage of the term “reliable,” nor any established industry standard, requires that speed be included in measuring the reliability of a 3G wireless network. In common usage, “speed” and “reliability” are distinct attributes. Just as the “largest 3G network” ‘would mean a network meeting the standards for a 3G network that is larger than the 3G networks offered by competitors, without further consideration of speed, so too the “most reliable 3G network” means a network meeting the standards for a 3G network that is most reliable, without further consideration of speed beyond that necessary to meet the recognized 3G network threshold. 10. — Moreover, even if speed were considered in determining 3G wireless network reliability in the manner AT&T suggests, Verizon Wireless’s claim to offer “America’s Most Newyork 2707) 3 Reliable 3G Network” would still be truthful, accurate, and substantiated. A recent independent survey showed that Verizon Wireless had the fastest 3G network, with AT&T ranking dead last among major carriers. 11, As of the filing of this declaratory judgment action, there exists an actual controversy between adverse parties within the jurisdiction of this Court. Verizon Wireless secks this declaratory judgment to protect its legal interests, to avoid future uncertainty regarding its advertising claims, and to protect the publie’s ability to receive truthful and accurate information concerning wireless telecommunications services. THE PARTIES 12. Celleo Partnership d/b/a Verizon Wireless is a general partnership organized under the laws of the State of Delaware with its principal place of business in Basking Ridge, New Jersey. 13. Upon information and belief, AT&T Mobility LLC is a limited liability corporation organized under the laws of the State of Georgia with its principal place of business in Atlanta, Georgia. JURISDICTI AND VENUE 14, This Court has jurisdiction over the subject matter of this action under 28 U.S.C. § 1331 and 15 U.S.C. § 1121 15. This Court may declare the rights and other legal relations of the parties and grant further relief pursuant to 28 U.S.C. §§ 2201 and 2202 and Fed. R. Civ. P. 57 because an actual controversy exists within the Court’s jurisdiction. 16. Venue is proper in this district under 28 U.S.C. § 1391(b). ‘The advertising claims at issue in this complaint have aired on television stations in this district and have run in 4 Newyork 273708) publications distributed in this district, and both Verizon Wireless and AT&T conduct substantial business in this district. FACTS A. The Wireless Telecommunications Industry. 17, With approximately 250 million domestic wireless subscribers and over $130 billion in annual revenues in the United States alone, the wireless telecommunications service industry is highly competitive. See Fed, Communications Comm’n, 13th Annual Report and Analysis of Competitive Market Conditions with Respect to Commercial Mobile Services, FCC No. 09-54 (2009). Verizon Wireless and AT&T are two of the four major national wireless carriers providing wireless telecommunications services in the United States. 18. Wireless carriers that offer superior network reliability are more likely to retain existing customers and attract new ones. In its January 2009 report on wireless network providers, Consumer Reports magazine found that “[overall satisfaction with the [four national wireless] carriers, reflected in their reader scores, generally corresponds to their connectivity [or “ability to access a network’] scores.” Best Cell-Phone Service, Consumer Reports, January 2009, at 28. B. _ Verizon Wireless Has Consistently Had America’s Most Reliable Wireless Network, Including America’s Most Reliable 3G Network. 19, Inaneffort to offer superior network reliability, Verizon Wireless has, for many years, invested billions of dollars to improve and enhance its network’s performance. Since 2007 alone, Verizon Wireless has invested over $13 billion in its network infrastructure, See Press Release, Verizon Wireless, Verizon Wireless Boosts Network at Key “Hot-Lanta” Locations in Georgia (May 25, 2009) (attached as Exhibit 1). eon 27 OH) 5 20. These investments have resulted in superior network reliability for Verizon Wireless when compared to other wireless network providers. 21. Since 2002, Verizon Wireless has advertised that it maintains “America’s Most, Reliable Wireless Network,” fully substantiated by extensive internal and external testing. 22. A standard measure for reliability in the wireless telecommunications industry combines two factors: (1) the ability to connect to the network (connection success or accessibility); and (2) the ability to complete a task (e.g., complete a voice call, download a file) once connected (session reliability or retainability). These factors are combined into a metric of reliability commonly referred to as “accessibility times retainability” or “AxR.” This AxR. metric has been used by telecommunications providers and others to measure the reliability of wireless voice telecommunications networks and is an equally appropriate measure of reliability for 3G wirel networks. 23. Verizon Wireless’s testing using the accessibility times retainability measure confirms that Verizon Wireless has the nation’s most reliable 3G wireless network when compared to other wireless network providers. 24. Testing by independent third parties also confirms that Verizon Wireless has the most reliable 3G wireless network. For example, in a comparison of national 3G networks (Verizon Wireless, AT&T, and Sprint), PC Magazine recently determined that Verizon Wireless ranked highest in call quality and network quality, and gave Verizon Wireless’s 3G network its Editors’ Choice award, commenting that: “Verizon works hard to built a great network, resulting in the nation’s best 3G experience.” PC Magazine further stated, “Yes, the ads are true: Verizon is the network. If you're looking for a reliable connection, be it voice or high-speed data, ewronx ra ax) 6 ‘Verizon Wireless has been the carrier to turn to for years.” See Sascha Segan, Battle of the 3G Networks, PC Magazine, June 5, 2009 (attached as Exhibit 2). 25. Based on this consistent record of superior reliability, Verizon Wireless has advertised its 3G wireless network as being “America’s Most Reliable.” This includes recent advertisements stating that Verizon Wireless has “America’s Most Reliable 3G Network,” “America’s Best 3G Network,” and “America’s Most Reliable Wireless Network.” 26. Examples of print advertisements and storyboards of television advertisements are copied below and provided attached as Exhibits 3 to 7. a. Print Advertisements awvonk 2737 (26) 7 veri on b. Televisions Advertisement Storyboard _ BETS eenrsteis2 MERIZOMwieiess os 27. The data cited above fully substantiates Verizon Wireless’ advertising claims that it has “America’s Most Reliable 3G Network, “America’s Best 3G Network,” and “America’s Most Reliable Wireless Network.” newyork a ¢ 9 C. AT&T’s NAD Challenge Relies on the Incorrect Premise That Speed Is an Essential Element of the Standard for Measuring Network Reliability. 28. On July 1, 2009, AT&T filed a challenge to Verizon Wireless’s advertising claims with the NAD claiming that Verizon Wireless makes false, misleading, and unsubstantiated superiority claims regarding its 3G wireless network. 29. Iniits challenge, AT&T alleges that Verizon Wireless’s advertising claims about 3G reliability are false and misleading because, according to AT&T, speed is an essential element of any standard by which to measure reliability of a 3G wireless network. 30. Neither the normal and customary usage of the term “reliable,” nor any established industry standard, requires that speed should be included in measuring reliability of a 3G wireless network. 31. Moreover, even if speed were an aspect of reliability—contrary to the normal meaning of the words—AT&T’s newly concocted formula for considering it is improper, in no Way reflecting an industry standard let alone the only appropriate standard, and can lead to nonsensical results. 32. Finally, even if speed were an attribute of reliability, AT&T’s claim that it has the fastest 3G wireless network is not true. A recent test conducted by found that Verizon Wireless operates the nation’s fastest 3G wireless network, and that AT&T’s 3G network ranked the slowest of the four national wireless carriers based on forward or download performance: ‘A smartphone broadband test conducted by found that AT&T customers reported the slowest average 3G network speeds, while Verizon subscribers posted the speediest results. Conducted in May [2009], our interactive 3G speed test attracted about 15,000 participants—12,000 of whom reported valid, usable results. The study focused Newyork 72178728) 10 on 3G networks deployed in the United States by AT&T, Verizon, Sprint and T- Mobile. Verizon came in first place with an average download speed of 1,940 Kbps, as reported by 856 participants. T-Mobile's average rate was 1,793 Kbps with 1,189 reported T-Mobile users. Third was Sprint with 1,598 Kbps, based on data from 1,570 users. In dead last was AT&T with an average of 901 KBps—but an overwhelmingly large user sample of 8,153 test takers. Brian X. Chen, Verizon Leads, AT&T Runs Last in’s 3G Speed Test, Wired, July 10, 2009 (emphasis added) (attached as Exhibit 8). 33. Verizon Wireless uses an accepted and proper standard for measuring 3G wireless. network reliability and, under that standard, testing establishes that its advertising claims of “America’s Most Reliable 3G Network,” “America’s Best 3G Network,” and “America’s Most Reliable Wireless Network” are truthful, accurate, and substantiated. Even if speed were a factor of reliability, that testing would still establish that those claims are truthful, accurate, and substantiated. COUNT ONE—DECLARATORY JUDGMENT 34, Verizon Wireless repeats and realleges the prior allegations of this Complaint. 35. By reason of the facts alleged herein, an actual controversy exists between Verizon Wireless and AT&T within the jurisdiction of the Court pursuant to 28 U.S.C. § 2201. 36. Verizon Wireless is entitled to a judgment declaring that its advertising claims of having “America’s Most Reliable 3G Network,” “America’s Most Reliable Wireless Network,” and “America’s Best 3G Network” are truthful, accurate, and substantiated and not in violation of Section 43(a) of the Lanham Act, 15 U.S.C. § 1125. ewyoRK 727 OH) ul PRAYER FOR RELIEF 37. WHEREFORE, Verizon Wireless prays that the Court: A. Declare that Verizon Wireless's advertising claims are truthful, accurate, and substantiated, and do not violate the Lanham Act; B. Award Verizon Wireless its costs and reasonable attomeys’ fees from AT&T pursuant to the Lanham Act; and C. Provide such other relief as the Court deems just and equitable. DEMAND FOR TRIAL BY JURY Verizon Wireless respectfully requests a trial by jury on all matters so triable. Dated: New York, New York July 27, 2009 WHITE & CASE LLP By: GA om George J. Terwilliger, ITT Christopher J. Glancy 1155 Avenue of the Americas New York, New York 10036-2787 Telephone: (212) 819-8200 Facsimile: (212) 354-8113 Attomeys for Plaintiff Celleo Partnership d/b/a Verizon Wireless 12 ewvonx maT a) Exhibit 1 Verizon Wireless Boosts Network At Key “Hot-Lanta” Locations In Georgia Page 1 of 2 veri onwirciess Residential, Business Wireless News Center News Center ‘Nows Archive Modia Contacts Test Men and ‘Women’ Print this page Pint this page ina pntr-frnaly format. Print Now Verizon Wireless Boosts Network At Key “Hot-Lanta” Locations In Georgia Customer Inquities For customer inquires, please call 800-922-0204 or goto Contact Us Media Contact info Caran Smith Garan, 678-339-4891 052512008 ATLANTA, GA — Verizon Wireless has enhanced wireless voice and data coverage in key areas of downtown Atlanta, making the country's largest and most able network even batter. The company's investment provides Verizon ‘Wireless vote and Mobile Broadband data In-ulding coverage tothe Georgia Dome and the Georgia Wortd Congress Center. The enhanced system covers 32 milion square fect and uilzes more than 130 antennas to make sure Visitors stay connected while atthe verue. Enhanced Mobile Broadband data capacty has also been added tothe Verizon Wireless in-buiking system atthe Hartsfild-Jackson Alarta Alport giving travelers even greater access to the company’s 3G high-speed wireless network (EV-DO Rev. A) terminals and at ates. Mobile Broadband allows greater access to he company’s V CAST service — hich allows customes to stream video clps, play cutting-edge 3D games and owe full song tracks over the air, VZ Navgator(SM)~ a location-based service ofering maps, aude driving directions, trafic updates, gas station locations and pricing; ard the newest, most reiable Push To Talk technology, |nadation, custome using the company’s Mobile Broadband data service to Wirelessly access ther mall and calendars, the Internat and other information, ‘can expect average download speeds of 60 kiobts per second (kbps) to 1.4 ‘megabits per second and average upload speeds of §00-800 kbps. At those ‘speeds, customers can upload or download a 1 Megabyte e-mail attachment — the equivalent ofa small PowerPoint® presentation ora large PDF fie ~in less than two seconds. “These important Atlanta locations are key for local business, residents and visitors alke,” says Jeff Mango, president ~ Georgia/Alabama Region, Verizon Wireless, Our customers need and want access to our high speed services. In the fourt quarter of 2008, Verizon Wireless customers nationwide sent more than 99 bill text messages 1.8 bilion picturelvideo messages and completed 136 millon downloads of music, videos, games, ringtones, ringback tones, and ‘exclusive contere. Our network must stay ahead to suppor the demand.” ‘The company's continued Investment in Georgia — which was more than $30 ition inthe rst quater of 2009 ~is part of Verizon Wireless ongoing effort to ‘expand coverage, improve capacty and enhance the quality of ts wireless! 7/27/2009 Verizon Wireless Boosts Network At Key “Hot-Lanta” Locations In Georgia Page 2 of 2 voice and data network throughout the country. Verizon Wireless has invested ‘more than $50 bilion sine i was formed ~ $5.5 bllon on average every year ~ tolincrease the coverage and capacity of ts national network and to add new ‘serves. 2007 and 2008, Verizon Wireess invested $8.5 bilion nationwide to ‘expand and advance ts network. ‘About Verizon Wireless \Verizan Wireless operates the nation's most relabe and largest wireless voice and data network, serving mare than 86.6 mifon customers. Headquartered in Basking Ridge, NJ. with more than 86,000 employees nationwide, Verizon Weless is a joint venture of Verzan Communications (NYSE: VZ) and Vodafone (NYSE and LSE: VOD). For more irformation, vst ‘wn To preview and request broadcast quality video footage and high-resolution stile of Verizon Weless operation, og on to the \Verizon Wireless Mutimedia Library at, 00k http://news.! 7/27/2009 Exhibit 2 Battle of the 3G Networks Page 1 of 5 i u eA Let your users sync wirelessly " igae] from virtually anywhere. ‘BlackBemy" Battle of the 3G Networks ARTICLE DATE: 0605.08 By Sascha Segan une isa blockbuster month for ‘smartphones. Incessant buzz has made the Pai Pre and Apple's rex-gen iPhone red-ht, But there's fe thing that may cool down these super smartphones: thei networks. Buzz up! Inthe US, the Pre is only on Sprint for now, and the Prone is exclusive 1 ATAT for the foreseeable future “roubles, athough both caries have large nationwide 36 data networks, nether Ras placed well in ‘wo independent nationwide surveys ranking cll quay, network qualty, and customer ‘service Ina hea categories, both ‘Sprint and ATET are bested by the third natonal 3G data network Verizon Wireless, (T-Moble i stil bulging ‘ut its 36 network, and Cricket and MetroPCS, though solid cholces, aren fully national carer.) ‘To compare three national 36 networks, we locked closely a their coverage maps, tested network speeds ‘with USS modeme, sectnized product ines and technologies, and gave heavy weight fo two surveys Conducted in mi-2008: our oun Service and Reliability Survey (SBR) and te JD Power ang Assooates ‘stomer satisfaction survey. Commitment to network quslty and hot phones, it seems, dont go hand in hand. you pick the Pre, youre ‘ing for a network with decent nationwide coverage and good speeds on out tests, but abysmal user ratings cross the Board In bath the JD Power and SAR surveys, Sprint customers gave the carrer low matks for cal {ualty, customer care, and technical support To its cred, Sprint has sald I's working hard to improve. Customer service, and Sprint medems clocked some ofthe fastest download and upload fines on ur tests, [Phone users’ complaints about AT&T are well documented. AT&T's 3G network is spotier than both Sprints and Verizon's, and the Phone creates heavy enough load onthe network fo create capacty problems from time to time. The company’s user ratings inthe SER and JD Power surveys have also been mediocre at best On the postive side, AT&T's technology is theoretically the best ofthe bunch—there just doesn't seem tobe enough oft installed yet ‘Sprints and AT&T's comparative mediocrity cancel eachother out. youre switching between the two for an 'Phone ora Pre, your camer-elated leve of usiraton may not change much. But f youre etching from ‘Verizon Wireless, you might want fo think again. ‘Verizon's 36 data is our Editors’ Chole, but unfortunatly for those who want the hottest phones, Verizon seems to care more about is network than about ts handsets, On the other hand, Verzon's coverage map ts the other two carers to shame, and ts user ratings are inthe stratosphere 'S0 you have a choice to make: Do you want a rock-solid network ora super-sexy phone? Check out our ‘recently updated reviews ofthe major 96 networks before you deci: "National 36 Data Networks: [AT&T Mobity 86 High-Speed Data (HSDPA) [ATEIT has a tere range of handsets running on a very advanced network technology, butts coverage oesatt measure up to Verizon’ Wireless High-Speed Data (EV-DO) oo http://www pemag.cony/print_article2/0,1217,2%253D241029,00.asp 712712009 Battle of the 3G Networks Page 2 of 5 ‘Sprint’ high-speed network has decent coverage and is fast—whon it works. The company has commited to solving ts welt known customer service problems. Verizon Wireless High-Speed Data (EV-DO) Verizon works har to bull a great network, resulting inthe nation’s best 9G experience. But the company ‘ahvays seems a ite behind the curve when kteames to top smartphones. AT&qT Mobility 3G High-Speed Data (HSDPA) REVIEW DATE: 06.03.09 BOTTOM LINE: [ATAT has a wide range of handsets and devics ruming on sli technology, but in much ofthe county is coverage lsrit as good as Verizon's PROS: ‘Quaitytecinology wth a strong upgrade path. Excllent intematonal roaming Tec handset options cons: Inconsistent network qulty. Spoty coverage, COMPANY: Arar Wireless EDITOR RATH By Sascha Segan [ATAT's 3G HSDPA network shouldbe the finest 3G network in the land. AT&T has the best phone selection, the most advanced technology, and the most comprehensive international roaming, But also has a spotty coverage map and mediocre customer salstacton ratings, which can make AT&T's network frustrating 1 Use. ‘There ar only two other national 3G networks to compare with ATATS in the U.S : those from Verizon \Weless and Sprint, T-Mobile says it wil have a nationvide network by the end of 2008, MetroPCS and Cricket are also building out 3G networks, but nether has yel reached national status. [AT&T's network uses the HSDPA/HSUPA standard onthe &50- and 1,900-MHz frequency bands. Right now, ‘ATT i in the midst of upgrading ftom HSDPA 3.6 to HSDPA 7.2, which would raise theoretical download ‘speeds from 3.6 megabits (Mbps) to 7.2 Mbps. The carrier's claimed upload speeds reach about 2 Mbps. (The network has the potential to reach HSDPA 14.4 and beyond inthe future) “These speeds are faster than those on Sprints or Verizon's networks—but only in theory. In practice, ATET's

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