Many wary of Comcast, Time Warner deal
Outrage that these two big cable companies would join hands to form an even more massive entity spurred a cascade of sarcastic tweets and satirical memes: the killer Death Star battle station from “Star Wars,” the evil Eye of Sauron from “The Lord of the Rings,” and a “South Park” snippet where character Eric Cartman and friends are tormented by cable employees before a logo curiously similar to Time Warner Cable’s own.
Consumers weren’t buying the assertion of Comcast CEO Brian Roberts that the combination, which will have more than 30 million TV and Internet subscribers, would be “pro-consumer and pro-competitive.”
Comcast said the deal would allow it to boost Internet speeds and reliability, spread its latest Internet-connected set-top boxes over more homes and help save it money on TV programming costs.
The two companies’ expected argument before anti-trust regulators: We don’t directly compete with each other in many regions. Therefore, the deal won’t reduce competition and should be approved.
But it is that lack of overlap, and lack of choice, which is at the root of customer frustration, according America Customer Satisfaction Index managing director David VanAmburg. Cable companies that purposely don’t compete against each other to provide fast Internet or reliable TV service can get away with not fully meeting customer needs in markets where they dominate.
“It’s almost subconsciously built into their business model that they don’t have to worry so much you’re going to leave for a competitor,” said VanAmburg. “It’s definitely a big factor.”
Many consumers were skeptical about the benefits of the deal to consumers.
Michael Pinto, a 48-year-old Time Warner Cable customer in Brooklyn, N.Y., said a lot of people in the city are trapped into whatever service happens to run into their building that the landlord allows. He worries that a lot of creativity could be stifled if control of Internet and TV service is consolidated into too few hands.
“I suppose it’s good news for shareholders. You get a bigger, growing company with smaller cost structures,” said Pinto, a website designer and chief creative officer at Very Memorable Inc. “But I think as a democracy — not just a democracy in politics but in a creative sense — I wonder what new channels are we missing out on?”
Simon Eldridge, a 36-year-old media technology consultant in San Jose, Calif., is concerned about everything from the combined company raising prices to throttling the streaming speeds of online video companies such as Netflix. Comcast has said it will continue to abide by government conditions attached to its purchase of NBCUniversal in 2011 that prevent it from selectively throttling Internet speeds, at least through 2018 when the conditions are set to expire.
The British native is a Comcast Internet customer, mainly because no other provider in his area will give him the speed he needs to work from home. Eldridge pays about $80 a month for a download speed of 50 Megabits per second. He says that’s about one-third pricier than in the U.K., where there is more competition.
“This kind of a merger is going to give them a third of the Internet market in the U.S. and they can charge even more,” he said.
He’s read up about their reputation for poor service, although Comcast has been “pretty decent” to him. Eldridge is hopeful that the companies fulfill pledges they made Thursday to boost Internet speeds and reliability for consumers if the deal is approved.
“Hopefully some good will come out of it rather than the worst side of both,” he said.
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