Comcast(NASDAQ:CMCSA) does not believe its past (and recent) history of horrifying customer service transgressions should impact the Federal Communications Commission and its decision to approve or not approve the $45 billion merger with Time Warner Cable (UNKNOWN:TWC.DL).
In some ways, that is like a person going on a dating website and asking prospective partners to focus on their career and bank account while ignoring an extensive criminal history. It is basically saying that past transgressions should not be used as a way to judge future behavior.
That makes sense for Comcast and Time Warner Cable, which have track records of treating subscribers poorly. Just looking at relatively recent history shows both companies with a number of customer-related scandals including:
- Comcast not letting people cancel their service and training "retention" specialists to more or less berate people into staying.
- Both companies changing names on bills to derogatory (and sometimes vile) terms for subscribers who complain to customer service reps.
- Comcast has been accused of hitting customers with huge bills when they decide to terminate service.
It is also worth noting that Comcast and Time Warner rank at the bottom of the American Consumer Satisfaction Index for their categories which is awful when you consider that pay television and Internet service providers are the lowest rated categories. That essentially makes these two companies the worst of the worst when it comes to customer treatment.
"Cable giants Comcast and Time Warner Cable have the most dissatisfied customers. Comcast falls 5% to 60, while Time Warner registers the biggest loss and plunges 7% to 56, its lowest score to date," according to the most recent ACSI survey.
Ignoring those woes when debating the merger would require the FCC to ignore some pretty damning evidence, which suggest that the deal may not exactly benefit customers.
What Comcast said
Executive Vice President David L. Cohen, who heads up lobbying efforts at Comcast, told The New York Times that he believes customer service issues are not relevant to the FCC decision.
"We have done an outstanding job of creating an extremely strong record that this transaction should be approved," he said. "And that is the record the regulators are going to make the decision on."
He did acknowledge that the company has issues with how it deals with customers.
"The atmospherics around our customer service clearly stir some antipathy among some consumers," Cohen said. "And it does provide a basis for opponents of the transaction to gin up three-sentence, nonsubstantive communications to the FCC saying that they don't like Comcast or they don't like Time Warner Cable."
The executive may have a point. It is certainly possible that some of the negative comments made to the FCC are generated (or at least encouraged) by rivals, but it is hard to blame competitors for what has been a long, documented history of poor customer service.
The company is trying
While past and ongoing customer relations problems have been well-reported, it is also important to note that efforts are being made to improve the situation. CEO Neil Smit has said repeatedly that improving service is a priority, and he has shown a willingness to devote resources to the issue including:
- Longtime, well-regarded executive Charlie Herrin has been put in charge of customer service.
- Comcast has released an app which allows customers to track when a service representative will arrive at their home.
- The company has beefed up its social media team to handle customer service issues over Facebook and Twitter.
Those are all moves in the right direction, and the company deserves credit for making an effort to fix such a large problem. What it does not deserve is the presumption of success from the FCC.
Just checking in to see if your Comcast services are working properly? -DB @pundrikax— ComcastCares (@comcastcares) April 2, 2015
What will the FCC do?
Comcast may be right that the FCC should look at its record when deciding whether to approve the deal, but Cohen is wrong when he suggests that the agency should not consider customer service as part of that record. The company deserves credit for making an effort to fix these problems, but those efforts are at least a little suspect when you consider their timing.
The cable and Internet giant comes off sincere, but turning your attention to customer service while waiting for a decision from the FCC is a little bit like a child improving his or her behavior in December to impress Santa Claus.
The FCC has a rare opportunity to pre-emptively protect consumers, and it should do just that. It is fine to accept Comcast's pledge to improve at face value, but it is more important to put measures in place to protect the public if the company does not follow through.
Daniel Kline owns shares of Facebook. He has never used an online dating site. The Motley Fool recommends Facebook and Twitter. The Motley Fool owns shares of Facebook and Twitter. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.