A non-customer

Comcast’s customer service isn’t just bad — it can be downright predatory.

An 88-year old South Florida woman living on Social Security promptly paid her Comcast cable bill of $29 on time each month for 13 years. The only problem is, she isn’t a Comcast Cable customer. The condominium where she lives switched to a different provider back in the year 2000, but that didn’t deter Comcast from continuing to bill her month after month eventually totaling $4,500 for non-service.

When she finally discovered the error, she ran into the Comcast “Don’t Care” Bears in the company’s customer service department.

“Give me my money back! Because I paid for them for so many years, and they’re rich. They are rich, and I’m poor,” she told a Miami TV station. Comcast told her they don’t give those kind of refunds.

Perhaps it was her fault for not recognizing the fact she was making payments in error. Comcast first offered a $20 “courtesy credit” and then stopped negotiating after making their final offer of a six-month refund — $174. After WPLG put Comcast on the 6pm nightly news, they agreed to give her a full refund.

[flv]http://www.phillipdampier.com/video/WPLG Miami Woman pays for 13 years of cable she never got 6-9-14.flv[/flv]

Whether it was colossal ineptitude or magnificent indifference, Comcast’s money collection machine grinds on, billing consumers for services they don’t receive and refusing to offer refunds until embarrassed on the evening news, which is exactly what happened when WPLG in Miami heard about this consumer’s plight. (2:12)

Comcast Cable out? No refunds, but enjoy a free movie on us if and when your service is restored.

Colorado Comcast customers suffering service outages due to defective cable company equipment are being told they are not entitled to service credits for extended outages and instead are now offered vouchers for discounts off pay-per-view events and movies.

Janice Howard sent word to Stop the Cap! customers are still annoyed with Comcast after a major outage knocked out service for more than 100,000 customers last fall because of a “router problem.”

“The outage hit right in the middle of a Broncos’ game against the Cowboys — a must-see event for any football fan in this state,” Howard recalls. “The reason I remember this now is the local paper has started a sort of movement encouraging residents to cancel Comcast service, if only because of their arrogant attitude during and after the outage, and the fact many of us just had another one.”

Howard called Comcast at the time looking for a credit on her next bill for the outage, but Comcast refused her and tens of thousands of others.

“I will never forget the surly Comcast representative who told me, and I can repeat it word for word because I recorded the call, ‘We don’t do no refunds for service outages anymore,'” said Howard. “Everyone who asked, including me, got nothing more than a pay-per-view movie voucher, which does no good if you cancel service.”

Enterprise columnist Armand Lobato confirmed that, and the fact his family finally “fired” Comcast this month:

Yes, Comcast is fired. We took a page from young adults’ playbook and canceled the phone. It seems nobody younger than 40 these days owns a land line, why should we? Even our smart friend Barbara said the only reason she hangs onto the land line is so she can use it to locate her misplaced cell phone.

No more. And no more TV either.

That was the tough one for me. But come to think of it, I don’t miss scanning through the scores of channels I never watched to get to the one I did. Nor do I miss mostly contrived reality shows or the endless blocks of foreign language stations for which we needlessly paid. No mas, Comcast.

With few exceptions, I find I don’t miss cable TV that much. We both like to read and with warmer weather, we’re outside more anyway, which it makes it easier to avoid the boob tube altogether.

I sure don’t miss the insanely ballooned, end of the month statements. Comcast’s bills, you have to admit, started to rival those hokey emails from the fictitious Zaire lawyer who promises the world if only you agree to hand over all your financials. Uh-huh.

For the record, Comcast’s official refund policy for most customers is that they are entitled to credit for some service interruptions exceeding 24 consecutive hours if Comcast is in the mood.

Howard has sympathy for Time Warner Cable customers about to be absorbed into the Comcast family.

“I feel for you because we have family back east who have Time Warner and they hate it, but we’ve always been able to prove Comcast has them beat when it comes to bad service, high prices, and customer service only a mother could love, assuming it was her child answering the phone.”

Neil Smit, CEO, Comcast Cable (left), Ryan Lawler, TechCrunch (right)

Of all the tech companies to turn up at TechCrunch’s Disrupt New York 2014 event, Comcast Cable seemed the least likely to qualify as the kind of innovative start-up TechCrunch loves to cover.

But there sat Comcast Cable CEO Neil Smit with TechCrunch’s Ryan Lawler, discussing Comcast’s mega-merger with Time Warner Cable, its peering agreement with Netflix, broadcast TV streamer Aereo, and Comcast’s legendary dismal customer service.

Smit’s arrival on stage to a smattering of tentative applause was a clear sign there was no love for the cable giant in the audience, particularly from many New York area Time Warner Cable customers dreading a future with Comcast.

Smit was immediately confronted with the fact Comcast was recently voted the Worst Company in America by Consumerist readers, prompting yet another promise that improving customer service was Comcast’s “top priority,” the same promise Comcast gave in 2007, 2008, 2009, 2010, 2011, 2012, and 2013.

“I think if there’s one thing to disrupt in our business, it’s customer service,” Smit added.

Smit defended Comcast’s merger with Time Warner, relying heavily on video subscribers to downplay the concentrated market power Comcast would have after the merger. Smit pointed out Netflix has the largest subscriber count of any pay television channel or platform and denied Lawler’s contention that a merger would give Comcast more than 50% of the American broadband market.

“I think the number is a little less than that — it is closer to 40% but if you include wireless than it would be less than 20%,” Smit responded, referring to the LTE 4G wireless networks from wireless carriers that come with very low usage caps and very high prices.

Smit also promised major broadband speed upgrades and other improvements for Time Warner Cable customers, but nobody mentioned Comcast’s gradual reintroduction of usage caps on residential broadband accounts.

Comcast Cable’s CEO also addressed several other hot button issues:

Smit claimed Comcast has a good working relationship with the FCC and is providing advice on whatever changes to Net Neutrality FCC chairman Tom Wheeler will propose later this month.

Despite the fact Comcast could ultimately benefit if Aereo is found to be legal by the U.S. Supreme Court, Smit recognized Comcast also owns NBC and other broadcast programmers and was concerned about the economic impact if cable operators stopped paying for over-the-air programming.

“We pay $9 billion a year for content,” Smit said. “One of the things that I question in the Aereo solution is: are they paying for content? The spend for that content has to come from somewhere.”

Smit also noted Comcast is increasingly targeting younger audiences by signing deals with college campuses to bring Comcast service to students to hook them as future subscribers. Comcast is also creating new packages with fewer channels to appeal to millennials. Smit also acknowledged many younger family members are accessing cable programming using passwords associated with their parent’s cable account.

[flv]http://www.phillipdampier.com/video/TechCrunch Interview with Neil Smit 5-6-14.mp4[/flv]

Here is the complete interview TechCrunch conducted with Comcast Cable CEO Neil Smit. (22:20)

Few were surprised more by the sudden announcement that Comcast was seeking to acquire Time Warner Cable all by itself than the negotiating team from Charter Communications.

Working for weeks to settle how Comcast and Charter would divide the second largest cable company in the country between them, they learned about the sudden deal with Comcast the same way the rest of the country heard about it — over Comcast-owned CNBC.

After Charter endured weeks of rejection from Time Warner Cable executives over what they called “a lowball offer,” Comcast had entered the fray to help Charter boost its offer and bring more cash to the table to change Time Warner Cable’s mind. In return, Comcast expected to acquire Time Warner’s east coast cable systems and much more.

That is where the trouble began.

According to Bloomberg News, the talks broke down because Charter wanted to hold onto as many Time Warner Cable assets as possible. Comcast chief financial officer Michael Angelakis expected Charter to divest more than just the New England, New York, and North Carolina Time Warner Cable systems. Angelakis also wanted control of Time Warner’s valuable regional sports networks in Los Angeles. When he didn’t get them, he stormed out of a meeting threatening to do a deal for Time Warner Cable without involving Charter at all.

The Wall Street Journal confirms the account, adding that both Comcast CEO Brian Roberts and Angelakis agreed the talks with Charter seemed to be going nowhere.

Roberts

Roberts called a secret meeting with top Comcast executives including Angelakis, Comcast Cable head Neil Smit, Comcast’s lobbying heavyweight David Cohen, and NBCUniversal CEO Steven Burke. Roberts asked each about the options on the table and their conclusion was to buy Time Warner Cable by themselves and cut Charter out of the deal.

Within days, Comcast CEO Brian Roberts reinitiated talks with Time Warner Cable CEO Robert Marcus. The two companies had talked off and on ever since Charter Communications set its sights on acquiring Time Warner Cable. It was clear from the beginning Marcus and his predecessor Glenn Britt were cool to Charter’s overtures. Not only was Charter a much smaller operation, it also had a checkered past including a recent bankruptcy that wiped out shareholder value and was loaded with debt again.

The alliance between Charter and Liberty Global’s John Malone was also unsettling. Those in the cable industry had watched how ruthless Malone could be back in the 1990s when a then much-smaller Comcast secretly attempted to acquire control of Tele-Communications, Inc. (TCI) — then the nation’s largest cable operator run by Malone. Malone was furious when he learned about the effort and went all out to kill the deal, acquiring the stake Comcast sought himself.

Malone’s cable empire would eventually fall with the sale of TCI to AT&T just a few years later. When AT&T decided it didn’t to stay in the cable business, it sold TCI’s old territories to Comcast, making it the largest cable operator in the country.

Malone

Malone’s brash attitude has also occasionally rubbed the cable industry’s kingpins the wrong way, especially in his public comments. Last year, Malone criticized Roberts’ more conservative operating style, which means Comcast pays a higher tax rate. Malone specializes in deals that leave his acquisitions with enormous debt loads, manipulating the tax code to stiff the Internal Revenue Service. In June, Malone was back again criticizing the lack of a unified national cable cartel better positioned to defeat the competition.

Under his leadership at TCI, many cable programmers didn’t get on TCI’s cable dial unless they sold part-ownership to TCI. Competitors were dispatched ruthlessly — home satellite dish service, then the most viable competitor, strained under TCI-led efforts to enforce channel encryption.

TCI-owned networks routinely required satellite subscribers to sign up with the nearest TCI cable system, which often billed them at prices higher than what cable subscribers paid. Subscribers had to buy not one, but eventually two decoder modules for several hundred dollars apiece before they could even purchase programming. The cable industry also worked behind the scenes to promote and defend enhanced zoning laws that made installing satellite dishes difficult if not impossible, and denied access to some programming at any price, unless it was delivered by a cable system.

Malone called today’s divided industry “Snow White and the Seven Dwarfs” and insisted on a new major consolidation wave to enhance “value creation” and deliver some major blows to satellite and telephone company competitors.

Despite Liberty Global’s ongoing consolidation wave of European cable systems, his lack of financial resources to put his money where his mouth was left Time Warner Cable executives cold.

Already loaded with debt, Malone’s part ownership stake in Charter could not make up for Charter’s current status — a medium-sized cable operator with dismal customer ratings primarily serving smaller communities bypassed by larger operators.

A deal with Charter would mean Time Warner Cable’s bonds would be downgraded to junk status.

Moody’s Investor Service warned Charter’s offer to acquire Time Warner Cable was primarily financed with the equivalent of a credit card, and would leave the combined entity with $60 billion in debt with bonds promptly downgraded to junk level. Time Warner Cable had always considered its bonds “investment grade.”

Charter’s first clue something was wrong came when Comcast stopped returning e-mail and phone calls. That’s always cause for alarm, but Charter officials had no idea Comcast was secretly negotiating with Time Warner Cable one-on-one. In fact, Comcast’s Roberts was negotiating with Time Warner Cable over a cell phone while attending the Sochi Olympics.

Malone finally got the word the deal was off just a short while before Comcast and Time Warner Cable leaked the story to CNBC.

Ironically, it was Malone who convinced Comcast to seek out a deal with Time Warner Cable. Comcast’s thinking had originally been it had grown large enough as a cable operator and sought out expansion in the content world, acquiring NBCUniversal. But Malone warned online video competitors like Netflix would begin to give customers a reason to cut cable’s cord or at the very least take their business to AT&T or Verizon’s competing platforms.

Comcast executives were convinced that gaining more control over content and distribution was critical to protect profits. Only with the vast scale of a supersized Comcast could the cable company demand lower prices and more control over programming. By dominating broadband, critics of the deal warn Comcast can also keep subscribers from defecting while charging higher prices for Internet access and imposing usage limits that can drive future revenue even higher.

Just like the “good old days” where customers had to do business with the cable company at their asking price or go without, a upsized Comcast will dominate over satellite television, which cannot offer broadband or phone service, as well as the two largest phone companies — AT&T, which so far cannot compete with Comcast’s broadband speed and Verizon, which has pulled the plug on further expansion of FiOS to divert investment into its highly profitable wireless division. If Comcast controls your Internet connection, it can also control what competitors can effectively offer customers. Even if Comcast agrees to voluntarily subscribe to Open Internet principles like Net Neutrality, its usage cap can go a long way to protect it from online video competitors who rely on cable broadband to deliver HD video in the majority of the country not served by U-verse or FiOS.