Customer satisfaction improves for cable, internet providers

In this Tuesday, May 17, 2016, photo, the Time Warner Cable logo appears above the post where it trades on the floor of the New York Stock Exchange.
In this Tuesday, May 17, 2016, photo, the Time Warner Cable logo appears above the post where it trades on the floor of the New York Stock Exchange. AP

Customers seem to be feeling a little better about cable and internet providers following back-to-back years of declining satisfaction.

According to the American Customer Satisfaction Index for 2016, released Wednesday, internet companies scored a 64 on a 100-point scale, up from 63 last year. Subscription television services scored 65, up from 63 last year.

Forrest Morgeson, director of research for ACSI, said despite the improvements, cable and internet providers are among the lowest-ranked of the 43 companies ACSI measures. Cable and internet service providers, Morgeson said, are all “virtual monopolies within their own geographic footprints,” so switching to another provider is not a simple task.

“At the same time, a lot of the improvements that you’re going to see in the industry are going to get picked up by the other suppliers,” Morgeson said. “So when someone starts offering faster download speeds ... that’s going to be picked up by other suppliers in pretty quick order, and it becomes industry wide.”

That’s the case with service providers in the Charlotte area. Time Warner Cable, for example, last fall completed the rollout of its high-speed service that boasts speeds up to six times faster than normal broadband. In parts of Charlotte last summer, AT&T began launching its own super-fast service, which offers speeds of up to 1 gigabit per second and allows customers to download 25 songs in less than a second.

With over 500,000 customers, Time Warner Cable is the Charlotte area’s dominant cable provider. The company ranked fourth-highest among internet companies with a score of 66, up from 58 last year, according to the index. Among internet companies, it ranked second to last with a score of 59, up from 51 last year.

Earlier this month, Charter said it had completed its $55.1 billion purchase of Time Warner Cable and Bright House Networks, a deal that creates the nation’s second-largest cable provider with more than 25 million customers in 41 states. Besides changes like the implementation of customer-friendly policies (like no modem lease fees) and a planned phaseout of the Time Warner Cable name, company officials have said customers won’t notice any big changes.

But Morgeson said mergers tend to push satisfaction downward.

“During and after mergers, customers tend to be a little bit more put-out for one reason or another. Maybe their account transitioned from an old company to a new company and it doesn’t go so smoothly, there could be price changes as a consequence of the merger, (and) there’s always the simple fact that customers don’t like to be purchased,” Morgeson said.

Elsewhere in ACSI’s TV rankings, Mediacom, which was new on the index last year, ranked lowest with a score of 54. At the other end, Verizon ranked highest with its Fios service and a score of 70. Right behind Verizon was AT&T U-verse, with a score of 69.

Among internet companies, Frontier Communications was at the bottom with a score of 56, while at the top was Verizon Fios with a score of 73. AT&T U-Verse slipped in customer satisfaction to 64, down from 69 last year.

Early last year, Google Fiber announced plans to bring its high-speed internet service to Charlotte, and crews have been busy recently laying the fiber network throughout the city’s neighborhoods. Google says the service is 100 times faster than normal broadband.

Morgeson said it’s too soon to tell what effect Google Fiber, which does not yet appear in ACSI’s index, will have on other service providers in the Charlotte area, though he said he cannot imagine the effect won’t be positive.

“When they face increased competition, and the possibility of losing customers to a competitor, companies tend to pick their game up and do a little bit better,” Morgeson said.

ACSI’s scores are based on interviews with 12,710 customers this past March.

Katherine Peralta: 704-358-5079, @katieperalta