Cable customer service not improving fast enough to keep up with competition, analyst says

With a Senate subcommittee panel set to grill pay-TV executives on customer services and billing practices on June 23, analysts say recent improvements in these areas by top operators like Comcast (NASDAQ: CMCSA) do not go far enough. 

"While many of these cable providers will make the argument that their customer services have improved, it is not enough to keep up with today's consumer demands and certainly not enough to keep up with their increasingly customer-obsessed competitors. This investigation is going to be a reality check for them," said Forrester analyst Rick Parrish in comments released today. 

Meanwhile, Parrish's colleague, Harley Manning, thinks questions about pay-TV customer service are not as relevant, given that competition from OTT and fiber service providers is forcing them to change. 

"Without question there is now real competitive pressure in the industry, from AT&T or Verizon or Google laying fiber down in an incumbent's market, and from the OTT providers," Manning said. That's causing all players to pay lots more attention to customer experience. But in most markets improvement has been slow, and mostly focused on fixing egregious problems. These  hearings will bring a greater sense of urgency around treating customers better and more fairly."

Improvement, Manning added, isn't coming fast enough.

"Except for federal government agencies (ironically) cable has delivered the lowest rated customer experience among all the consumer-facing industries we've studied," he said. "And we've conducted this study since 2007. Where was Congress during that time?"

A bipartisan Senate panel is getting set to grill cable, satellite and telco TV execs on their billing practices and overall customer service.

The Senate Permanent Subcommittee on Investigations panel is led by Sen. Rob Portman (R-Ohio). But its top Democrat is Sen. Claire McCaskill (D-Mo.), a longtime critic of pay-TV billing practices.

For its part, Comcast has been most aggressive in terms of making customer service improvements and recently saw marginal improvements on pay-TV customer satisfaction surveys published by the American Customer Satisfaction Index and Consumer Reports. However, both surveys reported generally low marks for the pay-TV sector. 

"As former market-by-market monopolies, cable companies didn't have much economic incentive to focus on customer experience," Manning said. "The bar was set really low by the few market players so there was little competition -- and where there was competition they weren't exactly shooting for the stars. In my opinion, this would have been the time for the Senate to act on this case."

"It is a very compelling case, since Congress had a hand in creating the current cable market landscape -- they are now investigating," Parrish added. 

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