Comcast (NASDAQ:CMCSA) stock had an up and down year, which makes sense given that the company saw federal regulators scuttle a major deal. In addition, the brand continued to fight both the reputation and reality of how it treats it customers.
For the past 12 months, Comcast, like the rest of its industry, struggled with what it will be going forward. It learned one piece of its future when it had to abandon its deal to buy Time Warner Cable (NYSE:TWC), after federal regulators made it clear they wouldn't pass it, and it struggled to deal with another matter as the customer-service scandals kept coming.
Comcast was all over the news this year and much of it was not good, but the cable and Internet giant did gain some direction regarding its future.
The TWC deal meets its end
Had Comcast been able to complete its $45 billion acquisition of Time Warner Cable, it would have been the unquestioned leader in providing Internet cable in the United States. The combined companies would have had about 36 million broadband customers -- more than a third of the total, according to research from Leichtman Research Group. It also would have served around 33 million pay-television customers out of nearly 94 million in the U.S., according to a different LRG report.
Had it been allowed to make the deal, Comcast would have controlled so much of the market that it may not have had to reform its customer service as broadly as it now plans to. That, perhaps, figured in the the Federal Communications Commission's decision to force the company to abandon the deal by making it clear it would not be approved.
"Today, we move on," said CEO Brian Roberts in a late-April statement. "Of course, we would have liked to bring our great products to new cities, but we structured this deal so that if the government didn't agree, we could walk away."
This was bad news for Comcast that ended its hopes of simply growing its way to dominance. Now it actually has to up its appeal to consumers, which might be a problem.
Cable, ISPs, and Comcast are not well liked
Pay television and Internet service share the dubious distinction of being the lowest-rated industries covered in the American Consumer Satisfaction Index. In the 2015 report, both industries maintained their low standing, with pay TV being ranked 3.1% lower than last year, while satisfaction with ISPs stayed the same year over year.
Comcast scored near the bottom in both categories, and it was below the average in both categories in the June report. The cable and Internet giant scored a 54 for its cable service, with only Time Warner Cable earning a lower score. It did even worse as an Internet provider, coming in dead last with 56. Both numbers were drops over the previous year, which shows that the company is going in the wrong direction as far a consumers are concerned.
This may be the reason why
After being rocked in 2014 by a number of high-profile customer service disasters, Comcast suffered more blows in 2015:
- A customer, Mary Bauer of Addison, Ill., whom Ars Technica reported had faced repeated difficulties with her service, received a bill addressed to "Super Bi*** Bauer."
- Numerous other customers have reported having their names changed to derogatory terms, according to Consumerist, with one man having his changed to A***ole Brown and another whose online profile name was changed to "Dummy."
- A Reddit post went viral in which a person details how a Comcast rep told a customer that Internet data caps are "mandated by law." (They are not, which the now-former customer knew, leading to a whole new scandal for the company.)
There were others, but these give you a flavor of the problems. Comcast was on its best behavior for much of the year -- at least since its May 5 announcement that it would be undergoing a major overhaul of its customer-service operation.
Better things ahead?
Comcast is in a tough position because consumers simply don't trust it, Even one rogue agent or a small hint of negative customer interaction leads to a whole new round of stories about all the company's past problems.
Still, Comcast has committed to being better, and it has begun hiring the more than 5,500 customer-service workers it pledged to add over the next year. It has also eliminated the four-hour appointment window and launched an app that lets people know when a technician will arrive.
And, while it's reasonable to question the company's motives, it has started to make big changes. That could ensure that its headlines in 2015 are less negative and more focused on its actual business.
Daniel Kline has no position in any stocks mentioned. He has never been called a name, at least in printed form, by his cable company. The Motley Fool has no position in any of the stocks mentioned. 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.