Senate bares frustration with customer service of cable industry, including Comcast

The hearing aired the findings of the Senate Permanent Subcommittee on Investigations, which reviewed 93,000 documents and spoke with dozens of company executives over the last 13 months. Senators said the companies should simplify bills, be more transparent, and refund overcharges.

Time Warner Cable and Charter, two cable giants that recently merged, faced the harshest criticism on billing overcharges. According to one of the committee reports released Thursday, 40 percent of Comcast customers who called with problems with bills could not resolve them on the first call in December 2015.

Sen. Claire McCaskill of Missouri, the committee's ranking Democrat, who had pushed for a public hearing for two years, said she had been personally frustrated with charges on her pay-TV bill and told pay-TV executives testifying Thursday that "nobody knows how to get the lowest price from you guys. . . . I think the secret sauce is to get really mad."

McCaskill also challenged pay-TV's practice over the last several years of adding fees for regional sports networks and local broadcast-TV stations to bills, and placing these fees in an area of the bills where they appear to be mandatory government charges.

Ohio Republican Rob Portman, the committee's chairman, said the inability of Time Warner Cable to refund overbilled charges amounted to a "ripoff" for consumers. He repeatedly returned to the issue through the two-hour hearing, noting that 44,000 Ohio residents had been overcharged by Time Warner Cable in 2015.

According to a committee estimate, Time Warner Cable and Charter will overbill customers nationwide $7.2 million this year.

There was no estimate of Comcast's overcharges. Comcast believes its billing-error rate was 0.3 percent, and says it bills subscribers for 287 million items, such as set-top boxes or TV bundles, in a year.

Testifying at the hearing were pay-TV officials representing companies that serve 70 million TV subscribers, including Comcast senior vice president Tom Karinshak, who runs the company's call centers. The officials acknowledged customer problems but said they were making improvements.

"We and the industry as a whole have not always made customer service the high priority it should have been," Karinshak testified. "We regret that history and have committed to our customers that we will lead the way with initiatives to change it; we are committed to making every part of our customers' experience better, and we have already begun to do so."

Last year, Comcast agreed to hire 5,000 additional call-center employees and technicians over several years, and to overhaul its customer-experience department, which the company has said will lead to happier customers.

Comcast's customer-satisfaction ratings tanked during its failed $45 billion deal for Time Warner Cable. The latest American Customer Satisfaction Index, released earlier this month, shows that Comcast's 2016 satisfaction score jumped about 15 percent in the pay-TV category, to 62 from 54 in 2015, but still ranked only 11th from the bottom.

The index is a 100-point scale, based on consumer responses to questions on price, reliability, and service quality.

Pay-TV companies generally rank among lowest-rated for customer satisfaction in the United States, according to the Michigan firm that produces the index.

"We found that customers are being charged a host of fees that are not included in advertised pricing, some of which are for programming that used to be included in a customer's video package," McCaskill said in her statement at the hearing.

"We also found that, just as many customers have long believed, some of these fees, like HD and DVR service fees, aren't a true reflection of the cost to the company of the service, but rather based on revenue goals of the company and the price a customer is willing to stomach," she said.

In an interview after the hearing, McCaskill said the committee will continue to investigate, looking at content costs and entertainment bundling that force subscribers to pay for sports channels even if they don't watch sports. She expects a second public hearing in the fall on those issues.

She said that there was no current plan to introduce legislation, and that exposure of the pay-TV practices could lead to reforms.

In 2015, the Senate Permanent Investigations Subcommittee made headlines with its probe into human trafficking, including trafficking minors for sex on the internet in the United States.

Republican Sen. Rand Paul of Kentucky said the nation has many other big problems, such as the projected trillions of dollars in deficits for Social Security and Medicare, and questioned the importance of Thursday's topic, noting, "We need to keep this hearing in perspective and not get carried away."

bfernandez@phillynews.com 215-854-5897 @bobfernandez1