Comcast Joins Time Warner Cable in Consumer Reports Doghouse

Comcast Maintenance Facility
Comcast Corp. has almost 22 million TV customers, and Time Warner Cable Inc. has more than 11 million. Photographer: Mike Mergen/Bloomberg

Merger partners Comcast Corp. and Time Warner Cable Inc. are two of America’s least favorite cable companies, according to a new survey from Consumer Reports.

The cable giants showed up near the bottom of the magazine’s rankings in a survey of 81,848 users of television, Internet and phone plans, the magazine is reporting today. In the survey, whose results aren’t directly comparable with previous versions, subscribers gave the companies low marks for customer support and for value.

“Everything else in consumer technology is getting more affordable every year -- everything except communications services,” said Glenn Derene, electronics editor and the lead author of the Consumer Reports story.

Comcast is seeking regulatory approval for the $45 billion takeover of Time Warner Cable, giving it control of 30 percent of the pay-TV market. The deal would help the companies cut costs amid declining demand in the cable industry, where average annual bills of almost $2,000 caused the number of U.S. pay-TV customers to fall last year for the first time.

Prices are climbing even with stiffer competition from phone carriers such as Verizon Communications Inc. That’s partly because networks such as CBS Corp. and Walt Disney Co. are charging cable companies higher fees to use their programming.

“We are always looking for ways to deliver improved value, reliability and service to our customers,” said Susan Leepson, a Time Warner Cable spokeswoman.

‘Making Progress’

Comcast said it has focused on improving customer satisfaction by proactively responding to complaints in social media, offering users online account management and boosting Internet speeds 12 different times in recent years.

“We are making progress,” said Tom Karinshak, Comcast’s senior vice president of customer experience. “We aren’t happy with the Consumer Reports results and we know we have more work to do.”

The Consumer Reports cover story, published today, shows just how much the pay-TV industry has infiltrated customers’ wallets. The rate of cable price increases more than doubled the rate of inflation in the 15 years through 2012, Derene said. Providers of bundled phone, Internet and cable packages have been consistently low over the past six years, and among the magazine’s lowest-rated consumer services, he said.

‘Through Hoops’

“My only gripe is the prices,” said Lee Craft, a Comcast subscriber in Nashville, Tennessee. “The product is pretty good -- it’s reliable and there’s lots of good content -- but I have to jump through hoops to get that product at a good price.”

Craft, a sports fan who prefers to watch TV on a big screen from his couch, said he has limited choices to replace his $140-to-$150 a month bundle of TV and Internet. Instead he’s forced to play what he calls Comcast’s shell game, trying to find a new deal after each temporary promotion ends.

His latest move was to take a smaller package of TV channels to keep his bill from going up.

Comcast’s TV service ranked 15th out of 17 providers, while Time Warner Cable’s was 16th. They were also in the bottom half of phone and Internet providers and of 14 companies that offer packages of all three services.

The lowest-ranked TV provider was Mediacom Communications Corp., a cable company with 528,000 subscribers, mostly in the Midwest and South. Comcast has almost 22 million TV customers, and Time Warner Cable has more than 11 million.

Consolidation Wave?

Verizon’s FiOS was near the top of the rankings in every category, while AT&T Inc.’s U-verse was in the middle.

Verizon’s prices are similar to what cable companies charge. FiOS customers pay about $150 a month, while Comcast got an average of $164 from video customers last quarter. Rising prices are one reason Comcast and Time Warner Cable, which each operate in different cities, are combining.

“As programming costs go up, the bigger companies will have the advantage,” Derene said. “If the Time Warner-Comcast deal goes through, I think you will see it kick off a wave of consolidation.”

So-called cord cutters, people who have canceled TV service and kept high-speed Internet, have found an assortment of streaming services from Roku Inc., Netflix Inc. and Hulu LLC that provide some viewing alternatives.

The Consumer Reports article, called “Untangling the Bundle,” offers instructions on putting together a do-it-yourself “triple play” of individual services, with an antenna for broadcast TV, broadband for premium shows, and voice-over-Internet phone service from companies like Ooma Inc.

Cord Cutting

Craft, the Comcast customer, uses another voice-over-Internet company, Vonage Holdings Corp., for his home-phone service.

Still, it’s hard to get away from the traditional carriers. After trying some of the online-TV options, his family still prefers the simplicity of cable over the amount of work involved in getting shows they want to watch online. He’s sticking with cable -- for now.

“The way the industry is going with streaming, I can see a day when I would cut the TV package,” Craft said.

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