Saturday, February 28, 2015

Is Comcast really 'the worst company in America?'

TheVerge.com's 'Comcast Confessions'

Is Comcast really 'the worst company in America?'

The Comcast Center looms large in Center City. (Ron Tarver / Staff Photographer)
The Comcast Center looms large in Center City. (Ron Tarver / Staff Photographer)

TheVerge reporter Adrianne Jeffries has posted the final installment of her "Comcast Confessions" seriesPrevious segments explored Comcast's admittedly needs-to-improve customer service from interviews with 150 current or former Comcast installers, phone service workers and supervisors. The finale, The Worst Company in America, contains some new reporting (and briefly cites my 2005 book Comcasted and my ex-Inquirer colleague David Cay Johnson's 2012 The Fine Print) but mostly summarizes concerns about Comcast's planned TimeWarner Cable acquisition, and some Comcast responses. Excerpts:

Comcast’s corporate headquarters, Comcast Center, is the tallest building in Philadelphia. It’s covered in mirrors, which makes it the perfect metaphor for the company, one former employee says; no matter where you go, the glare is in your eyes...

Comcast earned Consumerist’s “Worst Company in America” title twice, first in 2010 and again this year, 2014. It ranks at the very bottom of the American Consumer Satisfaction Index, underperforming even the rest of the cable industry, where “high prices, poor reliability, and declining customer service” are endemic...

AOL executive Ryan Block's... Kafkesque (service call) has now been listened to more than 5 million times... immortalized in a New Yorker cartoon, and included in a David Letterman top 10 list (“Lesser-known Labors of Hercules”). “It hit the cultural zeitgeist something fierce,” Block says...Forums like comcastmustdie.com and the Comcast section of Reddit have been created to give customers a dedicated space to vent...

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Comcast is enormously successful. It’s the largest cable company in the U.S, the product of a deliberate, then aggressive, growth strategy... Most recently, Comcast bought NBCUniversal as part of an effort to own more of the programming it serves, making it the largest media company in the world. It is also the 57th most profitable public company, ahead of Intel, Anheuser-Busch, and Goldman Sachs... Comcast wants to acquire Time Warner Cable: America’s second-largest cable provider with a similarly poor reputation...

Comcast says the merger will allow it to deliver more programming, faster internet, and other improvements for customers, while allowing the combined company to compete against new media challengers. "We will continue to invest hundreds of millions of dollars in our network to continue to create innovative products and services for Comcast and Time Warner Cable customers," says D’Arcy Rudnay, Comcast’s head of communications. The company says Block’s call prompted a customer service review that resulted in real changes... 

A majority of Americans still oppose the merger, according to a poll commissioned by the Consumers Union, fearing that a consolidated cable industry will lead to price hikes and less incentives to improve customer service... The proposed merger is being reviewed by several regulatory bodies, including the Federal Communications Commission, Department of Justice, and New York’s Public Service Commission... 

While they don’t compete with each other, cable companies do face competition from satellite, DSL, and 3G and 4G wireless providers... "The other options are hardly worth the money," says Bonnie Smalley, who worked in customer service at Comcast and won an award for her work tweeting as @ComcastBonnie. She quit in 2011. "Right now, [Comcast] has little incentive to provide you with decent service. Who are you going to run to when you disconnect your service? Nobody, and they know it."...

Comcast (read its public policy statements here) is the seventh-largest single source of lobbying dollars on Capitol Hill, spending $18.8 million to lobby Congress and federal agencies. The National Cable and Telecommunications Association, which spends $19.8 million, is the fifth...

Internet will soon be the cable industry’s primary business... The most vocal opposition to the Comcast-Time Warner deal therefore comes from internet advocates, who are worried about three things: persistently slow and expensive service across the United States; higher barriers to entry for new internet-based companies; and Comcast’s ability to control what customers see and do on the internet...

For now, fiber is the only technology that really threatens cable. Kansas City was the first city to offer Google Fiber, which is the "single biggest frustration to agents," says one Time Warner employee who works in a retention department and is tasked with talking customers out of canceling their accounts. "I can count on one hand how many times I’ve saved a person from switching to Google in the last year," he says. "I see a [Kansas City] area code on the caller ID and I brace myself."...

Cable companies are responding by doing what they’ve always done: buying each other... In a recent company memo, Comcast executive David Cohen cited satellite, Google Fiber, and "more choice of pay TV providers than ever before" as evidence that Comcast needs to get bigger. "Comcast believes that there can be no justification for denying the company the additional scale that will help it compete more effectively," he writes. (Cohen testimony to U.S. Senate here).

(TheVerge's Jeffries) had multiple long conversations with D’Arcy Rudnay, Comcast’s head of communications, and Tom Karinshak, senior vice president of customer experience, and it’s clear that Comcast is trying to address some of its deep-seated problems. "Improving customer service at Comcast is our number one priority," Rudnay says. "We continue to work on it, we have been working on it. It’s very important to our customer experience."... 

But based on interviews with more than 150 current and former employees, part of a three-week investigation by The Verge, some issues seem intractable...

While the (Time-Warner Cable) acquisition will result in cost-savings for Comcast, the company says, those savings won’t necessarily accrue to customers. "We’re certainly not promising that customer bills are going to go down or that they’ll increase less rapidly," Comcast executive vice president David Cohen has said.

Stopping the merger won’t fix what’s broken in the cable industry. "The reality is, the poor customer service, the anti-consumer stance on net neutrality, the constantly inflating prices, these are all downstream symptoms to be expected from any company allowed to accumulate too much wealth, power, and influence, while also being totally almost completely unchecked by regulation and free-market competition," Block says... 

"This is not getting bigger to provide cheaper service, or economies of scale, or to provide better service," a billing systems manager who worked at Comcast from 2008 to 2013 tells The Verge. "This is getting bigger for the sake of bigness. This is really like, ‘I own 10 Subway stores and now I want an 11th one.’ Well, if your 10 Subway stores have Cs from the health department, I don’t know if you should get an 11th one. Maybe you should work on getting them cleaned out."

Joseph N. DiStefano
About this blog

PhillyDeals posts raw drafts and updates of Joseph N. DiStefano's columns and stories about Philly-area finance, investment, commercial real estate, tech, hiring and public spending, which he's been writing since 1989, mostly for the Philadelphia Inquirer.

DiStefano studied economics, history and a little engineering at Penn, taught writing at St. Joe's, and has written the book Comcasted, more than a thousand columns, and thousands of articles, and raised six children with his wife, who is a saint.

Reach Joseph N. at JoeD@phillynews.com or 215 854 5194.

Joseph N. DiStefano
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