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Video services

Comcast Damages Go Beyond FCC's $2.3M Fine

Despite overhauling its customer service operations in an effort that goes back at least two and a half years, Comcast is still facing major challenges to its image as one of America's most hated companies.

In the latest blow to Comcast Corp. (Nasdaq: CMCSA, CMCSK)'s brand, the Federal Communications Commission (FCC) announced this week that it's assessing the company a $2.3 million fine for wrongfully charging customers for products and services they never requested. The FCC calls the practice "negative option billing," and says that Comcast repeatedly engaged in the activity by invoicing customers for premium channels, digital video recorders and other unwanted features. The FCC also says the fine is the "largest civil penalty assessed from a cable operator by the FCC."

Unsurprisingly, Comcast takes issue with the FCC ruling. The company says that not only does it not think the penalty is fair, but that it's also been "laser-focused" on improving customer service and has made significant progress in that effort over the last couple of years.

From the official statement: "We do not agree with the Bureau's legal theory here, and in our view, after two years, it is telling that it found no problematic policy or intentional wrongdoing, but just isolated errors or customer confusion. We agree those issues should be fixed and are pleased to put this behind us and proceed with these customer service-enhancing changes."

Here's the problem for Comcast: First, $2.3 million is a lot of money, but it's a drop in the bucket compared to the amount the cable company is spending to try to improve customer service. In 2014, Comcast set aside a budget of $300 million for its new Executive Vice President of Customer Experience Charlie Herrin, and there's limited evidence so far of an impact on customer perceptions. (See Comcast on Service: Why It's Different Now.)

In this year's American Customer Satisfaction Index, Comcast's score as a pay-TV company jumped to 62 out of 100 from 54 a year ago, but that number is still low, and also just below Comcast's 2013 score of 63. Likewise, Comcast's score as an Internet company jumped to 59 from 56 in 2015, but that's still below its 2013 score of 62.

Second, negative impressions of Comcast based on its customer service last a long time. Customers that feel gypped by Comcast today will remember the experience years from now and so will the people that hear their stories.


Want to know more about video and TV market trends? Check out our dedicated video services content channel here on Light Reading.


As a case in point, let me share a brief anecdote of my own.

I moved to the Philadelphia area in September of 2001 and signed up for Comcast service. The broadband connection was spectacular, but the TV service quickly turned into a nightmare. Comcast offered me HBO for free for 30 days, and because I was unemployed (new to town and facing the worst economy in my living memory), I accepted the offer figuring I'd be able to track when the trial was coming to an end.

At around day 28 or 29, I did cancel HBO, but that's when things when horribly wrong.

First, Comcast kept HBO in my lineup and charged me for it even after the cancellation. Then after hours on the phone, the company finally cut HBO... along with my entire cable TV service. After more hours on the phone, Comcast reinstated service, but with HBO still included, and the company continued to bill me for the premium channel. For months.

After many more hours on the phone -- time I probably couldn't have spent if I'd been employed -- I finally got Comcast to cut off HBO and reimburse me for the unfair charges. But the process was time-consuming and infuriating. So much so that I can still feel my blood pressure start to rise when I think about it 15 years later.

Ironically, Comcast is doing a lot of really good things today. PCMag rated it the fastest "major" ISP in the nation in August, and just today, the company announced new feature updates to its X1 sports app that solidly differentiate the video platform from other offerings on the market. (Note: the good news was somewhat undermined this morning by other reports of a Comcast Internet outage overnight.)

Unfortunately, all the positive improvements to Comcast service can't erase the negative feelings that many customers will continue to nurse for years. And that's a far greater penalty for the cable company to endure than a paltry $2.3 million fine from the FCC.

— Mari Silbey, Senior Editor, Cable/Video, Light Reading

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kq4ym 10/22/2016 | 12:33:09 PM
Re: Customer confusion? It does seem pretty arrogant for Comcast to say the problem is one of " isolated errors or customer confusion." Now, there's a blame someone else excuse if I've ever heard one. Granted there may be some real defense for some complaints, but how does that explain their high customer dissatisfaction ratings?
mendyk 10/17/2016 | 12:32:52 PM
Re: All the things wrong with broadband services in the US Your original post pins all the blame for the Bay Area's broadband deficiency on policy makers. But local laws (as opposed to policies) have a lot to do with the situation. So do the economic realities of delivering competitive broadband service. Also, I'm not sure what being a taxpayer has to do with any of this.
kjsing 10/17/2016 | 12:23:23 PM
Re: All the things wrong with broadband services in the US Mendyk,

Please read my original post. It has NOTHING to do with a user's individual needs. See my reply to Brooks7. No need to carry this discussion further.
kjsing 10/17/2016 | 12:20:57 PM
Re: All the things wrong with broadband services in the US Brooks7,

You keep missing the point. The article was about a fine levied for bad customer service. In that context I highlighted my personal experience of Comcast unilaterally breaking its agreement. If you pay for something against a promise, how is that unjust entitlement or arrogance?


Anyway, it is obvious that there is no point in carrying this discussion further, but suggest that you be more careful in reading and analyzing a post and if you can't contribute constructively, then don't contribute at all!
mendyk 10/17/2016 | 11:14:53 AM
Re: All the things wrong with broadband services in the US If you cut through the pointless acrimony, the point is a simple one: In the U.S., broadband service (or lack thereof) is determined by a wide range of factors, the least of which is the needs of an individual user. Municipal networks are hampered by a number of obstacles, including in some cases state laws against such initiatives. Also, Comcast's "monopoly" applies only to the narrowly defined cable service provider sector. For Internet service, there are other options.
brooks7 10/17/2016 | 10:18:39 AM
Re: All the things wrong with broadband services in the US @ksing,

It is arrogance to demand people do what you want because you say so.  Nobody is in business to serve you personally.  If you think that someplace has the important thing to do then move there.  It is the height of playing a victim to assume that people need to do things because you want them to.

Chattanooga will be viewed 30 - 50 years from now.  Now 1 - 3 years in.  And again, muni networks have failed as often as they have worked.  And yes, non-incumbent networks have problems.  Which is why if you would read what I wrote means we need to turn access carriers back into Utilities.  That is why cities don't build power lines.  

seven

 
kjsing 10/16/2016 | 1:46:34 AM
Re: All the things wrong with broadband services in the US If telling me to relocate to Chattanooga, because I'm commenting on issues in my neigborhood, is not demeaning, then you've lost all reference to what respect for another's opinions means. As for having earned forum entitlement because of having been on LR since the site began, I will leave that to LR.

Your arguments against muni netrworks apply equally to non-incumbent companies, including Sonic. So far Chattanooga's Gigabit initiative has drawn only positive reviews as one may find many references of on the Web, and UTOPIA seems to have learned from previous mistakes and continues its build-out.

What I highlighted in my post was that Comcast went back on an agreement it had with a customer and continues to do so, because it holds a monopolistic position in the bay area for broadband Internet services. How dare you insinuate that it is I who demonstrates arrogance? You clearly have entirely missed the point of my post.
brooks7 10/15/2016 | 6:10:38 PM
Re: All the things wrong with broadband services in the US  

@ksing,

I have a very simple point and it is not demeaning.  I have been on LR since the site began, so I doubt I am going anywhere.

Municipal networks have a spotty record.  Palo Alto built its own network and it failed.  We have not idea if Chattanooga will work.  It is not a success until it lasts 15 - 20 years AND shows economic benefit for the city.  That is not a given and it is definitely not a certainty.

Many of the IOCs are really muni networks.  They have a number of challenges like getting the worst pricing on the planet, because they have such low volume.  A city has to maintain its infrastructure and that means hiring people to operate the network, just like they hire road crews.  And on top of that you have a presumption that these other networks will have better pricing or customer service, again this has yet to be shown over the long term in real world examples.

What you have asked for in your posts is for profit companies to do what you personally want.  You want to take no action to support your view.  That seems like extreme arrogance to me, to the point of entitlement...hundreds of ISPs should battle for your usage.  Really?

seven

 
kjsing 10/14/2016 | 5:50:48 PM
Re: All the things wrong with broadband services in the US Brooks7, your attitude is demeaning and not constructive. This is a discussion forum and not a podium for individuals to demean and insult others! Hope the Lightreading moderators pay attention.
brooks7 10/14/2016 | 5:04:19 PM
Re: All the things wrong with broadband services in the US  

So move to Chattanooga.  Since it will be the economic capital of the world.

seven

 
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