Commentary
Comcast (Merger) Must Die
- by Bob Garfield , Featured Columnist, February 17, 2014
Remember Comcast Must Die?
It was a blog jihad I mounted back in 2007 not to kill the cable provider, but to shame it into some modicum of customer-service responsibility. The project had not one but two jingles, a horrifying/funny video and a podcast. But what it mainly had going for it was righteousness. Thousands upon thousands of frustrated customers used the blog as a CRM tool of last resort -- and so did Comcast, which was reduced to employing a site called Comcast Must Die to fix problems it was incapable of solving through its own vast but ineffectual system.
The company reacted deplorably. Its “good cop” side tried to co-opt me with personalized, platinum customer service, while the “bad cop” bullied me and my then employer, Crain Communications, by pulling $1 million in advertising.) But it also eventually came to heel by using my site, by empowering its own frontline employees to actually solve consumer issues and by hiring top-level executives with the authority to impose internal change. In short, consumers won.
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Mind you, Comcast still ranks near the bottom in customer satisfaction -- even in a category that itself brings up the rear -- but it is light years ahead of where it stood seven years ago. And juggernaut though it may be, it is listening.
And here’s what it will be listening to for the next year: more righteous rage.
The proposed merger with Time Warner Cable -- which the company is trying to justify with an utterly dishonest piece of misdirection -- would be a disaster for the customer base and the society.
The first problem is very much on Comcast Must Die's turf: the inevitable deterioration of already poor customer service. It was the very eyes-bigger-than-its stomach problem the company used back then to explain why it couldn't get a truck to your house within a 4-hour window. It was struggling, the executives repeatedly told me, to harmonize the systems of all the disparate cable systems it had acquired to achieve such awesome scale. Now it proposes to fold in Time Warner Cable, which in itself boasts one of the worst customer-service records in America. Yeah, that should go swimmingly.
The greater issue, however, is a classic antitrust nightmare on both major ends of the business: cable TV and broadband.
On the TV side, a merged company will give Comcast far too much clout in negotiations with broadcasters and producers for acquisition of content. And by “too much clout” I mean: take it or leave it. No programmer can afford to be without the distribution, and revenue, represented by this colossus. As it is, the major networks are now de facto cable channels, depending more on retransmission fees than on the inevitably shrinking advertising pie for the future revenue.
Of course, that's a short-term problem. The real issue here is broadband market share. Even if network neutrality is restored by legislation or regulatory reclassification of broadband pipes as common carriers, the fact is that in our lifetimes virtually all programming will be entering our devices over the Internet. Giving Comcast more market share would give one company a third of the entire online infrastructure -- i.e., the core of our economy, our communications network, and increasingly, our very way of life.
So naturally, Comcast's public relations message is: don't worry! No, they assure us, there is not a single ZIP code in which Comcast and Time Warner compete!
This is supposed to make us believe they have no more leverage to jack up prices. But of course, that is hardly the point; cable companies are local monopolies almost everywhere they do business. The point is that one company would have a gigantic share of production (NBC Universal), acquisition (Comcast-Xfinity) and distribution (co-ax to your home). As a matter of public policy that would be insanity. And if network neutrality is not restored, we will have created a vertically integrated and horizontally vast megacorporation that would make the old Standard Oil look like a mom ‘n pop.
I'm not saying Comcast must die. But this merger should. And will.
Bob Garfield, former editor at large for MediaPost, is a long-time public radio personality who currently hosts Booksmart Studios' "Bully Pulpit" podcast. A 30-plus-year commentator on media and marketing, he is co-host of public radio's Peabody Award-winning “On the Media” program; senior fellow at Wharton Future of Advertising Program, SEI Center for Advanced Studies in Management; founder of the Media Future Summit and author of five books.
I, too, wouldn't worry so much about the service, though I appreciated your jihad against Comcast back in the day.
Is the issue about the share of broadband, or the vertical integration with content? Both are problematic. In the long run, duplicative infrastructure may be more inefficient; vertically integrated systems may be more stifling to the market and worse for consumer prices. It seems that it's easier to "regulate" a distribution system (and ensure network neutrality) than protect against a vertical system with its hidden pricing dynamics.
Good luck getting them to pay attention to you this time ;-)
If it's any comfort, Bob, the new behemoth would depend on the shaky proposition that consumers will continue sticking to cable-broadband bundles. IETV will challenge that approach. Comcast &/or Time Warner will have to compete with Amazon, Apple, Verizon, et. al. It's going to be interesting to see how this plays out.
Regarding "too much clout in negotiations with broadcasters and producers for acquisition of content" - if the merger had the effect of slowing down the rapid escalation of retrans and affiliate fees that might be considered a consumer benefit. Unfortunately diminished competition is more likely to have the opposite effect: Comcast does better under continued fee escalation (passed on to captive customers) - not only because it owns NBCU, but because this supresses market transition to an unbundled streaming model in a scenario where consumers have limited choice of broadband providers and see minimal savings from cord cutting.
I'm sure Brian Roberts has had armies of lawyers review this deal, but given our history of trust-busting the railroads, steel companies and AT&T, I cannot imagine that anyone would give this deal a better than 60-40 chance of passing.
This deal must die!
This is so damn funny, and tragic. Most of us remember when the feds broke up ATT because of their monopoly. Now, no one cares about land lines, but we all care about cable and internet, our principle means of inbound and outbound communication. Comcast has gotten better, and their local advertising platform is awesome, but I cannot understand how this merger is going to help anyone. With greater competition, we would achieve better customer service and support. With less, the opposite will surely take place.
Most companies have to follow trends and update their business in order to thrive. They have to make customers happy, and meet needs at a favorable price. However, Comcast has a different model - which is to become a monopolist for delivery of content to the home, and then hold both the content providers and the end use customer hostage to their control of the pipe. This will surely lead to even worse customer service and more unhappy people while the family controlling Comcast becomes increasingly wealthy. Bad news for everyone except them. We can only hope that regulators see the obvious and force Comcast out of monopolizer threatening mode and into competitive business like most companies http://onforb.es/1iKMl9w
Local monopolies? You're living in the past. Satellite is nibbling at their bottom-line and Netflix is stealing their thunder. Cord-cutters are real. It's not 2007 anymore and consumers have real options.
Brian Roberts’ pretty rhetoric about this “pro-consumer, pro-public interest, pro competition” deal is a bunch of baloney. Pick a hundred cable customers off the street and ask them who they think will benefit the most from this merger; I’ll put in half my next paycheck if more than 5 of them say it will be the consumer. The good news, though, is that even if the merger is approved, “the loser now will be later to win, for the times they are a-changin’….” As technology offers more alternatives and broadband cable customers open their eyes to what else is out there, the losers just might become the winners. Personally, I think we’re going to see that sooner rather than later.
Bob...
Guess who President Obama has played golf with a few times... Yeah, Brian Roberts, CEO of Comcast. This deal is "Too Big To Fail." Is this a great country, or what?
George "AdScam" Parker
I get my phone and internet service from one provider, last year service was down for six hours, tried to get credit for the down time was told since I failed to report it no credit would be given. I wanted to cancel and seek service from another provider, I guess you know there was no one to turn to...
Satellite is irrelevant as far as broadband is concerned and there is no real competition to cable monopolies and guess what, Netflix rides on those cable pipes into your home. What options--cable or OTA TV, with OTA TV in danger of termination via FCC mandated "voluntary incentive auctions"...what a farce.
Comcast/TWC doesn't care if you cut your cable cord--they just charge you an an extra $20/month for your high-speed Internet.
I hear both sides here...OK but answer this question...why don't we put this much effort into what the oil companies have been doing to us for years and CONTINUE to today...There's a ton of options in the Connected world and more to come...let's get real and get on oil...it's where the real money is...and we Really need to Drive !! You can get TV "Everywhere".
Yes by all means Comcast merger must die. Way too much clout without competition. And they just continue to get away with poor customer service and this is supposed to be the future of awesome? I don't think so.