Survey puts Time Warner-Comcast merger in harsh light
06/04/2014 11:34 PM
06/04/2014 11:36 PM
The American Customer Satisfaction Index has pegged Time Warner Cable Inc. as the nation’s most unloved company.
Based on phone and online surveys, it rated Time Warner Cable’s Internet service as 236th out of 236 companies in customer satisfaction – a list that included Coke, Campbell Soup, Nissan, Allstate and Verizon Communications. Time Warner Cable’s TV service rated 25th.
Comcast Corp.’s Xfinity Internet service placed at 234 out of 236 and its TV service landed at 232 in the list released in May.
Would merging these two cable giants in a megadeal benefit consumers? Comcast says that it will, and that the perceptions of its poor customer service are outdated.
Certainly, the cellar-dwelling ratings of the two companies will stoke the political and regulatory debate in Washington over the proposed merger that has faced fierce opposition.
“This doesn’t pass the straight-face test,” said U.S. Rep. Rochelle M. “Chellie” Pingree, a Maine Democrat who has posted an online petition opposing Comcast’s $45.2 billion acquisition of Time Warner Cable with 161,000 signatures. “Nobody believes that by combining these two companies they will be twice as good.
“People think they will be twice as bad.”
A Time Warner Cable subscriber at her home in southern Maine and a Comcast subscriber in Washington, Pingree says that if people are angry with their TV and Internet service providers now, they have no idea what sort of problems they may face if the two companies merge.
David VanAmburg, managing director of the ACSI LLC, the private company that produces the American Customer Satisfaction Index, said he doesn’t see a boost to ucstomer satisfaction through a Comcast/Time Warner Cable combination because they both have such low ratings.
“They are among the lowest scores of any company of any industry we measure,” VanAmburg said. Satisfaction involves a consumer’s perception of a product’s value, quality and customer service.
The index’s top-rated company was Mercedes-Benz, followed by Amazon, H.J. Heinz, Lexus and Apple. Cable and telecommunications companies rated near the bottom of the index, which was developed at the University of Michigan and then spun out into a private company.
“Where there is a lot of competition in an industry, the customer satisfaction is very high,” VanAmburg said.
In its “public interest” filing with the Federal Communications Commission, Comcast has said it would bring tangible benefits to Time Warner Cable customers with its $45.2 billion deal with faster Internet speeds and technology innovations.
Comcast also will accelerate Time Warner Cable’s conversion to an all-digital network, which would allow subscribers to install their own Internet modem or set-top box with universal TV remotes – popular features on the all-digital Comcast cable system.
As for its customer satisfaction ratings, Comcast says they have to be better but notes that competing satisfaction-tracker J.D. Power shows the company making steady improvements since 2010.
“We have made significant progress, but we know that a lot more has to be done,” Tom Karinshak, Comcast’s senior vice president of customer experience, said Friday.
Internal data show that in the past four years, repeat service visits to subscriber homes declined 20 percent and that 42 percent of equipment installations were now done by the subscribers themselves without a technician – thus avoiding wait times and scheduling.
Comcast believes that some of its low satisfaction ratings can be attributed to its “legacy” reputation.
Michael R. Solomon, a professor at the St. Joseph’s University business school and the director of its Center for Consumer Research, agrees that Comcast’s reputation could be partly molded by events beyond its control.
“Their problem transcends their own brand,” Solomon said. “It’s the nature of the beast. They made a movie – ‘The Cable Guy' – for a reason. They all poison the well for each other. We assume now that the service is terrible, so we are looking for this – that cable will ruin your day.”
Time Warner Cable acknowledged its customer woes after staggering TV subscriber losses in 2013. Even before it reached a deal with Comcast in February, its executives embarked on a plan to revitalize its network, beginning with the Los Angeles and New York TV markets.
“We’re not satisfied with these results and are working every day to deliver a better customer experience,” said Time Warner Cable spokesman Bobby Amirshahi.
“We’ve introduced one-hour appointment windows, extended our (Time Warner Cable) TV app for live TV and On Demand to more consumer devices, begun delivering dramatically faster Internet speeds, and provided our Internet customers with access to more than 250,000 Wi-Fi hot spots – and we are committed to additional customer experience improvements this year.”
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