Why do consumers hate big companies?
Coming back to Los Angeles?
photo: MoneyBlogNewz flkcr
If you are a cable subscriber in the US it’s likely your cable provider is going to be a much bigger company by the end of the year. The Comcast offer to buy TWC for $45 billion is expected to fly. Comcast executives are already mulling over which 3 million of Time Warner’s subscribers they can divest to stay below the 30% mark required by the FTC in mega mergers. (The inside joke is that if Comcast doesn’t move fast enough TWC will lose 3 million just from natural attrition.)
Customer Service Anyone?
According to this recent WSJ article the following are the 10 most hated companies in the US:
2. Abercrombie & Fitch
3. Electronic Arts
4. Sears Holdings
5. DISH Network
7. JPMorgan Chase
Contrary to recent comments I’ve read around this topic, neither Comcast nor TWC makes the cut. But a much bigger Comcast – I predict they’ll drop the Time Warner Cable moniker – would probably yield a bigger unfriendlier entity for the average consumer. (I personally think AT&T should be on here due to their really terrible customer service.)
But what other ramifications are there to this mega merger?
Cost of Pay TV
The average channel lineup won’t go up in price right away. Comcast won’t have a true monopoly and still competes with Dish, DirecTV, AT&T’s U-Verse, and Verizon’s FIOS. The bad news is that subscription costs won’t go down either. Expect the rates to continue their slow annual increases.
Cost of Broadband
This is a different story. Internet access already varies in price around the country depending on competition. Consider the impact Google Fiber has had on TWC in Kansas City. Where Comcast is the only player in town there will be nothing stopping them from raising rates. If you don’t have U-Verse, FIOS, or a regional telco in your area expect to pay more for broadband.
There are some scary scenarios to consider when combining the recent loss of net neutrality rules. Mainly, could a super-power MSO/ISP tweak the system to make over the top viewing more difficult? In theory they could. Consider the nightmare possibility of being charged special fees to view Netflix, YouTube, or Amazon Video. But I don’t think the consumer along with these competitors would stand for this.
The Big Picture
It’s hard to believe that at one time AT&T had a virtual monopoly for land lines across the entire US. If you are old enough you may remember paying different rates for local, regional, and long distance. Ma Bell had dozens of different ways to ding you on your bill and there was not much you could do about it. Then came United States v. AT&T, the Internet, cell phones, and land lines are hardly relevant anymore.
Cable MSO’s started as small regional companies. Over the last 20 years these small companies merged rapidly. Talk to someone from TWC, Comcast or Charter and they’ll take you through a genealogy of employers that maybe six or more names long.
Technology and service providers tend to start small, merge, and become super powers until some disruptive force comes along and wipes them out. Cable in the sense of Pay TV may be getting close to that disruptive phase. And if a true disruption happens, paying $100+ per month for Cable may someday become as antiquated as paying 10 cents per minute to dial outside of your area code.