Consumer service lacking as cable firms consolidate

Charter Communications (CHTR) on Friday vowed that customer service will improve if regulators approve its deal for Time Warner Cable (TWC), even as another survey cast both companies as especially inept at keeping consumers content.

The deal, unveiled on Tuesday, comes a month after Comcast (CMSCA) dropped its own bid to purchase Time Warner amid resistance from the Justice Department and the Federal Communications Commission (FCC), both of which voiced concern that consumers would be harmed by the diminished competition.

Similar worries could derail Charter's plans, with questions being asked of whether the company controlled by media tycoon John Malone can adequately service the customers it would gain from the proposed deal, as well as its smaller bid for Bright House Communications.

According to a survey released Friday by non-profit publisher Consumer Reports, Charter ranked 14th out of 17 in customer satisfaction, while Time Warner Cable placed 16th. Comcast, the largest cable provider, ranked last. Asked to explain the results, Jim Wilcox, the magazine's senior electronics editor, pointed to a lack of competition: "There aren't a lot of remedies for people who are dissatisfied with their service."

Other surveys including the closely followed American Customer Satisfaction Index (ASCI) have yielded similar findings.

Cable customers complain of the industry's poor reliability, poor customer service and high prices, according to David VanAmburg, ASCI's managing director. While satellite and rivals such as Dish Network (DISH) and Verizon's (VZ) FiOS fare better than the cable companies, their ratings are mediocre when compared with other industries such as retail, he said.

"No one seems to be doing a particularly good job in providing basic customer service," he told CBS MoneyWatch. "You can hire as many people as one could possibly put on the books; (but) if the model behind how they are supposed to deliver that service is wrong, you are still not going to be providing customers with good customer service."

In an interview with CBS MoneyWatch, Justin Venech, Charter's vice president for external communications, noted that the Stamford, Connecticut-based company takes customer service seriously and worked to improve its network and the services it delivers, including going "all digital" last year.

"That was the groundwork that needed to be laid to provide our customers better products and service over a more reliable network," Venech said. "The second piece of it is having in-sourced care employees, not outsourcing, not using overseas call centers but actually having Charter employees provide the service."

Charter has added 7,000 employees since 2012, most of whom are tasked with helping subscribers. The company has also invested in training, and would hire still more customer service representatives if the Time Warner Cable and Bright House deals go through, Venech said.

Sen. Al Franken (D-MN), a leading Comcast critic, has urged the FCC and the Department of Justice to examine Charter's plans and called on regulators to hold Charter accountable for the promises being made to customers.

"We're evaluating the situation, but we're definitely asking Charter and Time Warner to provide a public interest benefit for the deal," Public Knowledge, another critic of the Comcast deal, said in a statement. "We do worry about job cuts post-merger that could lead to worse customer service."

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