AT&T has recently begun a lawsuit feud with Verizon claiming that their new ad campaign which covers cell phones, as well as service, inaccurately depicts the wireless coverage offered by AT&T’s network.  According to AT&T:

“In essence, we believe the ads mislead consumers into believing that AT&T doesn’t offer ANY wireless service in the vast majority of the country. In fact, AT&T’s wireless network blankets the US, reaching approximately 296M people. Additionally, our 3G service is available in over 9,600 cities and towns. Verizon’s misleading advertising tactics appear to be a response to AT&T’s strong leadership in smartphones. We have twice the number of smartphone customers… and we’ve beaten them two quarters in a row on net post-paid subscribers. We also had lower churn — a sign that customers are quite happy with the service they receive.”

Uh-oh.  Those are fighting words.  Verizon responded by changing the legalese at the bottom of the commercials to clarify that “Voice and data services available outside of 3G areas” are depicted in the map.  The problem AT&T has is that they feel the average consumer doesn’t know the difference between a 2G or 3G wireless network, and the consumer perceives the map to depict overall cell coverage.  In response to the suit, Verizon released three more ads depicting the lack of 3G coverage on AT&T’s wireless map.

While the results of the suit are still in litigation the question remains; did AT&T and Apple shoot themselves in the foot by hyping a 3G coverage that does not cover as much area as Verizon.

In hindsight it is easy to say that AT&T and Apple made a mistake by hawking 3G, but the reality is the response from Verizon to compete with AT&T has always been coverage.  Verizon’s rebuttal should be applauded, and the ball is now in AT&T’s court.  A law suit won’t heal the damage done to the consumer’s perception about coverage in the United States.  The average consumer is unaware AT&T has filed suit.  AT&T should be focusing its attention on creating an ad that strengthens its value proposition of coverage in the wireless market AND at the same time working to expand its 3G coverage.  I know, I know it’s easier said than done, but this is the hole that AT&T has dug.  The cell phone industry is ultra-competitive and relies on a partner with hardware suppliers as well as the network it is founded on.  Sprint has joined with Palm, Verizon with Motorola, and AT&T with Apple.  In the nationwide wireless chess game Verizon calls check, and now its AT&T’s turn.