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Comcast-TWC: Merger of Equals in Poor Service?

Mari Silbey
3/25/2014
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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

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Mitch Wagner
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Mitch Wagner,
User Rank: Lightning
4/18/2014 | 4:32:22 PM
Let's pretend
Here's an interesting report: Time Warner Cable Pretends Customer Complaints Don't Exist

That's one way to improve customer satisfaction -- pretend nobody's complaining. 
DHagar
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DHagar,
User Rank: Light Sabre
3/26/2014 | 1:03:12 PM
Comcast-TWC: Merger of Equals in Poor Service?
nasimson, I fully agree.  All I see is the opportunity to have a bigger player that delivers poor service - with a market dominance that limits consumer choice. 

But I also agree that the consumer is likely to be the loser because I don't think they will rule against the merger.
nasimson
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nasimson,
User Rank: Light Sabre
3/26/2014 | 12:15:52 PM
casualty in this merger
Two losers dont make a winner. Fewer larger media conglomerates is not good for freedom of information and american people at large. So customer service is not the only casualty in this merger.
gconnery
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gconnery,
User Rank: Light Sabre
3/25/2014 | 10:12:21 PM
Karma
Seems unlikely this is relevant to the business case, but it would certainly be Karma if the two company's extraordinary inattention to service came back to limit their ability to function as a business.  Appropriate really.
Mitch Wagner
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Mitch Wagner,
User Rank: Lightning
3/25/2014 | 5:16:31 PM
Re: Synergies!
I agree. I'm not seeing much of anything here that will dissuade the federal government from approving this merger.
mendyk
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mendyk,
User Rank: Light Sabre
3/25/2014 | 4:59:26 PM
Re: Mergers of equals
In the case of what passes for content, it's more like 200 turds, not just two.
FbytF
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FbytF,
User Rank: Light Sabre
3/25/2014 | 3:53:03 PM
Mergers of equals
"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" Of course they won't go down, they'll in fact go up. Why? Because they can, that's why. 

Two turds make a pile!
spc_isdnip
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spc_isdnip,
User Rank: Lightning
3/25/2014 | 3:41:25 PM
Another day, another service disaster
Comcast doesn't seem to have its act together any more.  Their phone service across our area went out today.  Not outbound calls -- there was dial tone -- but inbound calls all failed.  This took at least four hours to fix, though I don't know when it began.  Back in the day, what telco would have let thousands of lines not be reachable for hours?  Of course the ILECs today have no qualms about that either, noting how Verizontal left a lot of lines in New York City down for several weeks recently (more recently than Sandy), and tried to use it as a sales pitch for FiOS.

They think they save money by diverting service calls to the Phillipines and the like, where low-paid workers read a script about rebooting your PC or sending a reset signal to your cable box.  But it is a farce; it is just poor service.  It was well after I had spent some time on the phone wtih a filipina call center dweeb that they put on a recording saying there was a major service outage in my area.  Sloppy, and a big waste of fmy time.  RCN's phone service is much better.
mendyk
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mendyk,
User Rank: Light Sabre
3/25/2014 | 2:58:25 PM
Re: Synergies!
Being stupid isn't a crime (thankful for that), and being less than competent isn't a good enough reason on its own to prevent two businesses from merging.
kq4ym
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kq4ym,
User Rank: Light Sabre
3/25/2014 | 2:21:13 PM
Re: Synergies!
Unless a lot of public outcry comes to the FCC regulator's table, it's going to be unlikely a customer dissatisfaction survey will gain much traction to prevent a merger. But, it's certainly ironic that low rated Comcast and TWC hope to join forces to give better service to customers. 
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