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Comcast-Time Warner merger worries consumers

After Comcast announced a deal to acquire Time Warner Cable on Thursday, it didn’t take long for consumers to start venting their frustrations over high prices, spotty service and fears of a monopoly. 

Associated Press (2008)

After Comcast announced a deal to acquire Time Warner Cable on Thursday, it didn’t take long for consumers to start venting their frustrations over high prices, spotty service and fears of a monopoly. 

LOS ANGELES — Cable subscribers don't give Comcast and Time Warner Cable good grades when it comes to customer satisfaction. So after Comcast announced plans for a $45 billion purchase of Time Warner Cable on Thursday, it didn't take long for consumers to start venting their frustrations over high prices, spotty service and fears of a monopoly.

The pairing of the nation's two biggest cable companies spurred a cascade of sarcastic tweets and satirical memes in which people likened the new entity to the killer Death Star battle station from Star Wars and the evil Eye of Sauron from The Lord of the Rings.

The jokes reflect a more serious sentiment among consumers. Market research company J.D. Power said in September that in the multiple surveys about pay TV service it had conducted over the previous year, Comcast and Time Warner Cable ranked below the industry average in every region of the country. (By contrast, Bright House Networks, which maintains a partnership with Time Warner and serves much of southwest Florida, consistently scores well in customer satisfaction surveys.)

With the acquisition, Comcast would serve more than 30 million TV and Internet subscribers. The company 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.

Comcast CEO Brian Roberts said the combination would be "pro-consumer and pro-competitive."

Comcast's expected argument before antitrust regulators: Comcast and Time Warner Cable don't directly compete with each other in any region. Therefore, the deal wouldn't reduce competition and should be approved.

But it is that lack of overlap, and absence of choice, that are 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," VanAmburg said. "It's definitely a big factor."

Simon Eldridge, 36, a media technology consultant in San Jose, Calif., is concerned that the combined company could raise prices or throttle the streaming speeds of online video companies such as Netflix. He is a Comcast Internet customer mainly because no other provider in his area will give him the speed he needs to work from home. He pays about $80 a month for a download speed of 50 megabits per second.

"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.

Comcast-Time Warner merger worries consumers 02/14/14 [Last modified: Friday, February 14, 2014 8:06pm]
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