Comcast-TWC: Merger of Equals in Poor Service?
Consumers Union, the activist group and policy division of Consumer Reports, thinks the latest poor showings by Comcast and Time Warner Cable in a customer satisfaction survey should give regulators plenty of pause when considering the merger between the two companies.
The Consumer Reports National Research Center has published the new results of a survey asking consumers to rank television and Internet services. Comcast Corp. (Nasdaq: CMCSA, CMCSK) ranked 15 out of 17 for value and customer support. Time Warner Cable Inc. (NYSE: TWC) scored even worse, sliding in at 16 out of 17 for overall television service and faring particularly badly in the categories of value, reliability, and customer support.
"Both Comcast and Time Warner Cable rank very poorly with consumers when it comes to value for the money and have earned low ratings for customer support," said Delara Derakhshani, policy counsel for Consumers Union of U.S. Inc. "A merger combining these two huge companies would give Comcast even greater control over the cable and broadband Internet markets, leading to higher prices, fewer choices, and worse customer service for consumers."
In arguing for the acquisition of Time Warner Cable, Comcast has said that combining forces would allow it to innovate faster and accelerate deployment of new services. Executives have also maintained that a merger would not decrease competition because the two companies have no customer overlap.
However, even though the creation of a larger entity would give Comcast more purchasing power with programmers, the company has been quick to say that a deal does not mean its monthly subscription fees would go down. Therefore, to improve consumers' perception of value in the future, the combined cable company would have to deliver on its promises of better service, at least enough to compensate for continued high prices. (See Comcast Strikes $45B Deal for TWC and Comcast's TWC Coup: 3 Things to Know.)
Neither Comcast nor Time Warner Cable responded to requests for comment on the latest survey results in time for publication.
Expect to hear more arguments for and against Comcast's proposed acquisition deal in the near future as the merger regulatory review process heats up in Washington, DC. The Senate Committee on the Judiciary will hold a hearing to examine the impact of the deal on consumers next Wednesday, April 2.
— Mari Silbey, special to Light Reading