1. “Customers are fed up with us.”
Cable giants Comcast and Time Warner Cable ranked among the top-ten most hated companies in America in 2012 (coming in fourth and seventh), according to the American Customer Satisfaction Index, which rates companies based on surveys. Cable customers have no shortage of issues to gripe about, from installation appointments missed to new charges added to bills. New York and New Jersey customers sued Cablevision for $250 million in November, alleging the company billed customers for TV, Internet and phone services they didn’t receive because of superstorm Sandy. (Cablevision said in a statement that the lawsuit misstates the facts and is without merit, adding that its customers can request a credit by phone or online.) Time Warner Cable, meanwhile, was hit by a lawsuit of its own in mid-November from customers claiming that the $3.95 monthly fee for leasing modems violated customer agreements prohibiting such fees. Plus, some customers haven’t forgotten an incident in 2010, when Time Warner accidentally aired pornography on some children’s channels. Time Warner Cable says such technical glitches are rare and that it works with customers individually when content appears on the wrong channels.
Time Warner Cable declined to comment on the lawsuit, but said that such fees are commonplace in the industry. In addition, a pricing study from the Federal Communications Commission reported that cable operators often need to update their equipment from year to year to maintain or improve quality, which could explain the need for new fees or price increases. Both Time Warner Cable and Comcast pointed out that they’re working on improving customer satisfaction by introducing new products for customers, including smartphone apps and services for viewing videos on other platforms like cellphones, tablets and laptop computers. Some of the fees, such as Time Warner Cable’s new modem fee, can be avoided if customers buy their own equipment. And customer service representatives might give customers a break in the form of a discount or waived fee if they pick up the phone and complain, says Phillip Dampier, editor of StopTheCap.com, a group that fights usage caps from Internet and cable providers
2. “Good service exists...just not in your area.”
Not all telecom providers get the thumbs down from customers. It’s just that those companies that do manage to get high ratings are only available in limited areas, according to a Consumer Reports study from June. For instance, WideOpenWest, a regional cable company in the Midwest, got top ratings for its TV, Internet and phone services, and for its bundled packages of all three services. Another top-rated provider, Verizon FiOs, is available in 12 states and Washington, D.C. Verizon’s top ratings are partly due to its method of running high-speed fiber-optic network directly to a house, instead of switching to existing copper wiring as some providers do, according to Consumer Reports.
Some more bad news, those cable customers who don’t already have access to one of these popular regional networks may not get connected for a while. Verizon, for instance, expects to stop building out its fiber-optic network in 2013, after it reaches its goal of being available to 18 million households (with the remaining expansions planned primarily for New York and New Jersey), says Verizon spokesman Bill Kula. WideOpenWest says it expanded to the Southeast after acquiring a smaller cable company, Knology, in July.
3. “We don’t have a monopoly, but we may be your only option.”
After the enactment of Telecommunications Act of 1996, which was intended to increase competition among telephone and cable companies, some experts expected relief for customers seeking better service and lower prices. But 15 years later, a 2011 survey by the Federal Communications Commission showed that 61.5% of customers still only had one main choice of cable provider. Mergers between cable companies and partnerships between providers have hampered competition over the years, experts say. The commission also found that those cable subscribers who have other options for TV service, either from a satellite provider or a rival cable company, also have a greater selection of channels — 49 basic service channels on average, compared with an average of 41 in noncompetitive neighborhoods. They also tend to see smaller price increases.
Of course, most people also have the option of signing on to satellite television, and in some areas, service from phone companies, which sometimes offer competitive pricing and expanded programming for cable and Internet services. And those aren’t the only threats to cable’s dominance: Brian Dietz, vice president of communications at the National Cable & Telecommunications Association, a trade association for the cable industry, says cable companies have lost market share in the past 20 years, not only as consumers have switched to phone or satellite companies, but as some have given up cable services up altogether to use Web-based streaming services like Netflix, Hulu and Amazon Prime.