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Consumer Reports’ doghouse has Time Warner Cable and Comcast

By Scott Moritz
Bloomberg News

Merger partners Comcast Corp. and Time Warner Cable Inc. are two of America’s least-favorite cable companies, according to a new survey from Consumer Reports.

The cable giants showed up near the bottom of the magazine’s rankings in a survey of 81,848 users of television, Internet and phone plans, the magazine reported Tuesday.

In the survey, whose results aren’t directly comparable with previous versions, subscribers gave the companies low marks for customer support and for value.

“Everything else in consumer technology is getting more affordable every year — everything except communications services,” said Glenn Derene, electronics editor and the lead author of the Consumer Reports story.

Comcast is seeking regulatory approval for the $45 billion takeover of Time Warner Cable, giving it control of 30 percent of the pay-TV market nationwide.

Time Warner Cable’s unit based in Akron, which serves Northeast Ohio and Western Pennsylvania, is the company’s third-largest division.

The deal would help the companies cut costs amid declining demand in the cable industry, where average bills of almost $2,000 a year caused the number of pay-TV customers to fall last year for the first time.

Prices are climbing even with more competition from phone carriers such as Verizon Communications Inc. That’s partly because networks such as CBS-TV and Walt Disney, owner of ABC-TV, are charging cable companies higher fees to use their programming.

The Consumer Reports cover story shows the rate of cable price increases more than doubled the rate of inflation in the 15 years through 2012, Derene said.

Providers of bundled phone, Internet and cable packages have been consistently low over the past six years, and among the magazine’s lowest-rated consumer services, he said.

Comcast’s TV service ranked 15th out of 17 providers, while Time Warner Cable’s was 16th. They were also in the bottom half of phone and Internet providers and of 14 companies that offer packages of all three services.

The lowest-ranked TV provider was Mediacom Communications Corp., a cable company with 528,000 subscribers, mostly in the Midwest and South. Comcast has almost 22 million TV customers, and Time Warner Cable has more than 11 million.

Verizon’s FiOS was near the top of the rankings in every category, while AT&T’s U-verse was in the middle of the rankings.

Verizon’s prices are similar to what cable companies charge. FiOS customers pay about $150 a month, while Comcast got an average of $164 from video customers last quarter. Rising prices are one reason Comcast and Time Warner Cable, which each operate in different cities, are combining.

“As programming costs go up, the bigger companies will have the advantage,” Derene said. “If the Time Warner-Comcast deal goes through, I think you will see it kick off a wave of consolidation.”

So-called cord cutters, people who have canceled TV service and kept high-speed Internet, have found an assortment of programming from streaming services Roku, Netflix and Hulu.

The Consumer Reports article, called “Untangling the Bundle,” offers instructions on putting together a do-it-yourself “triple play” of individual services, with an antenna for broadcast TV, broadband for premium shows, and voice-over-Internet phone service from companies like Ooma Inc.



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