They say things get worse before they get better, and consumers are about to get proof of that with the merger of Comcast and Time Warner Cable according to news outlets.
The $45 billion merger announced Thursday might be a win win for both companies, but it wil be a lose lose victory for their combined 30 million customers, who are already among the least-happy customers in all of Corporate America.
The two companies last year were the lowest-scoring cable companies in the American Customer Satisfaction Index, mainly because of the weakness of their customer service. That made them the least-loved companies in one of the least-loved industries for customer satisfaction. The only two industries with worse customer-satisfaction ratings, according to Consumerist, are newspapers and internet providers. By the way, Comcast and Time Warner Cable are also internet providers.
Little wonder, then, that the two companies were near the top of Consumerist's Worst Company In America contest last year, based on unscientific online polling. Comcast, which took home the title of Worst Company in 2010, reached the Final Four in 2013, after beating Time Warner Cable in the Elite Eight.
The companies, naturally, are putting the best spin face on the merger.
“The combination of Time Warner Cable and Comcast creates an exciting opportunity for our company, for our customers, and for our shareholders,” Comcast CEO Brian Roberts said in a press release. The company did not immediately respond to a request for further comment.
"When you consider Comcast’s accomplishments in delivering cutting edge television and broadband services in their markets, bringing their innovations on an accelerated basis to Time Warner Cable markets is a big win for consumers," Time Warner Cable spokesperson Bobby Amirshahi said in an email to the Huffington Post.
The history of mergers suggests customer service might only get worse for these two companies. Coupling companies typically struggle to knit together their massive systems, and customers get lost in the process. When Comcast bought AT&T Broadband for $50 billion in 2002, customer billing problems led to such a backlash that the company ultimately launched a "Think Customer First" training program.
A BusinessWeek study of 28 mergers between 1997 and 2002 found that customer-satisfaction ratings dropped significantly after the unions, with the effect lasting for years. Cable companies suffered some of the biggest drops in that study. (Strangely, a more recent study, focusing on nearly the same time period as BusinessWeek, came to a different, completely counterintuitive, conclusion.)
More recently, customer ratings for BMO Harris Bank, United Continental and Exelon tumbled after their big mergers, Joe Cahill of Crain's Chicago Business noted last April.
"So much can go wrong — computer integration snafus, recordkeeping glitches, you name it," Cahill wrote, "and almost all of it affects customers."
Satisfaction ratings do tend to snap back eventually, as companies scramble to keep customers from fleeing. But after a long history of industry consolidation, Comcast and Time Warner Cable have so little competition that their customers might have nowhere to flee.
"If this deal goes through, customers...will probably see prices rise, with no corresponding improvement in service," Harvard Law School professor Susan Crawford wrote last month, when the merger was still just a rumor.
If there's any reason to hope, it's that both companies are suffering from the broader long-term trend of customers dropping cable subscriptions in favor of other alternatives. One of those alternatives is broadband Internet, which both companies also offer -- although they are the lowest-rated providers in that space, too.