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Instant Analysis: Comcast Corp. Still Has Major Customer Service Problems

By Rich Duprey - Jan 5, 2016 at 11:16AM

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The Internet service provider receives exponentially more complaints than its rivals.

What happened?
Technology website Ars Technica filed a Freedom of Information Act request with the FCC to get access to all the complaints lodged against Internet service providers in 2015 and found that Comcast (CMCSA -2.56%) received over three times more complaints than its nearest rival and had twice as many as the next three largest ISPs combined.

Does it matter?
Customer service horror stories are legion when it comes to Comcast, and it has been named by an annual Consumerist poll as the "Worst Company in America" -- twice. While any large corporation is going to get a large share of consumer complaints, Ars Technica's review indicates there is seemingly a disturbingly ingrained culture at the cable company that doesn't exist elsewhere.

According to the tech and IT website, between Jan. 1 and Nov. 9 Comcast was the subject of 11,812 complaints, mostly about its 300 gigabytes-per-month data cap and overage charges. The second most-complained about ISP was AT&T (T -0.78%), which received 3,896 complaints, followed by Verizon (VZ -0.96%) at 1,588, and Time Warner Cable (NYSE: TWC) with 1,240.

According to data from Leichtman Research Group, as reported by Ars Technica, Comcast has 22.9 million broadband subscribers, AT&T has 15.8 million, Time Warner has 13 million, and Verizon has 9.2 million. While Comcast is by far the largest cable operator, it is not so big that it ought to be outstripping its rivals so heavily in the complaints generated department.

For each complaint filed with the FCC, the oversight agency forwards it to the ISP, which then has 30 days to respond to both the agency and the customer about the complaint. Ars Technica notes that many times customers use the process to get a company to act on a complaint they feel it hasn't been responsive enough to previously.

Some of the more high-profile and outrageous examples of poor customer service at Comcast that have received widespread publicity, have probably emboldened and encouraged other consumers to lodge complaints against the ISP. But the sheer volume above and beyond its rivals suggests there is a systemic problem here, and bodes ill for its efforts at expanding. Its failed merger attempt with Time Warner is a case in point.

Although there were many reasons for the regulatory agencies impeding that effort, Comcast did itself no favors by incurring the wrath of consumers. The high volume of complaints filed against it speaks to a pressing need to reform itself and its image, particularly if it has future acquisition plans.

Rich Duprey has no position in any stocks mentioned. The Motley Fool recommends Verizon Communications. 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.

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Stocks Mentioned

Comcast Corporation Stock Quote
Comcast Corporation
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Verizon Communications Inc. Stock Quote
Verizon Communications Inc.
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AT&T Inc. Stock Quote
AT&T Inc.
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