In the News

Published September 1, 2006

Consumers Say Cable Providers Satisfy Better than Telcos

Cable companies are outperforming telephone companies in customer satisfaction, according to a study by J.D. Powers and Associates. The result points to a 10-year turnaround in the perception of cable service, which has come under increasing competitive pressure, first from satellite service providers and, more recently, telephone companies. Just 10 years ago, cable company service was culturally personified by Jim Carrey’s sociopathic “Cable Guy” character.

The 2006 Residential All-Distance Telephone Customer Satisfaction Study, released in July, found cable companies rank highest in customer satisfaction in five of six U.S. regions. Cox Communications ranks highest in the Northeast, Southwest, and West regions; Bright House Networks leads in the Southeast Region; and Time Warner Cable takes top honors in the North Central Region. Verizon is the sole traditional telephone company receiving the highest rank in a region, the Mid-Atlantic.

The survey showed price playing a large role in customer satisfaction. On average, customers reported paying $52.40 per month for local and long distance service, up from $50.70 in 2005. Cable customers report paying an average of just $42.40 per month, while average spending with traditional telcos averages $53.59.

The study found customer satisfaction with telcos declining most dramatically in the areas of customer service and image and billing. Other areas measured, including performance and reliability, cost of service, and offerings and promotions, also showed declines in satisfaction.

Shareowners Press Microsoft on Net Neutrality Stance

The Free Enterprise Action Fund (FEAF), a $5.5 million mutual fund dedicated to providing “financial and pro-free enterprise ideological returns,” has asked for a shareholder vote that would force Microsoft Corp. to explain its support for network neutrality.

Reuters reported in July the fund has proposed that Microsoft prepare a report analyzing the business and economic rationale, regulatory effects, legal liabilities, and any impact on product development and customers of its network neutrality position.

The fund owns 4,000 shares of Microsoft, as well as other companies on both sides of the network neutrality debate. FEAF claims that in a similar effort this spring, 24 percent of JPMorgan Chase & Co. shareholders supported its shareholder proposal to question the bank’s involvement on behalf of greenhouse gas legislation, noting the bank did not appear to have any significant expertise on the topic.

According to Reuters, Microsoft has written to the Securities and Exchange Commission to argue the neutrality debate is part of its normal business operations and SEC rules permit it to exclude such proposals from its annual shareholder vote.

A Hobson’s Choice for Cable Companies?

Late this summer, Rep. Dan Lipinski (D-IL) and Rep. Tom Osborne (R-NE) introduced The Family Choice Act, a bill that gives the cable industry the so-called choice of selecting one of three approaches to ensuring “family-safe” programming–or else face the same standards that apply to over-the-air broadcasters.

The bill’s options for cable providers are: 1) apply FCC broadcast indecency standards to programming between 6:00 a.m. and 10:00 p.m.; 2) allow customers to choose from an a la carte menu of services, allowing them to block certain channels and receive a bill credit; or 3) offer a family programming tier. The latter is defined as including all the channels in the Expanded Basic Tier, except those that show programming unsuitable for children between 6:00 a.m. and 10:00 p.m. (programs rated TV-Mature or TV-14) unless that programming is a news program or live sporting event.

Broadcasting & Cable magazine reports the likelihood of such a bill passing is slim, given the bipartisan 20-2 defeat in the Senate Commerce Committee of a bill introduced by Sen. John McCain (R-AZ) that would have forced a la carte service on cable providers.

Sharon J. Watson ([email protected]) is a freelance writer specializing in coverage of IT issues.