Business, Coastal Stuff

Investment Advice: Short Comcast

10.27.06 | 7 Comments

As I’m sure many of you deal with large companies as a customer on a daily basis, this won’t be a surprising story. What I’d like to attempt to do is to alert those of you who work in such entities that seemingly good business policy can easily backfire, as in my experience with Comcast over the past month. For those of you unfamiliar with Comcast, it’s our incumbent local cable tv, internet, and nascent telephone company on the coast.

About a month ago, I wanted to access a new channel that appeared in the lineup to, surprise, watch an Ohio State football game. I tuned to the channel and much to my surprise, it said that access was not authorized. Surprised I say, because aside from an internet access customer I’m also a Digital Platinum all-everything cable customer. The way it works is aside from pay-per-view events, if there’s a channel, you get it. As you might expect, a premium price is also associated with that package, a price I have been willing to pay for the past 7 years because Comcast met their end of the bargain making new content available to me.

Predictably, I called Comcast customer service to inquire why I did not have access to this new content. It seems the business policy had changed and that new ala carte channels were now the norm. Thus, in addition to the king’s ransom I was paying for the “all everything package” I was now expected to layer content atop that base with additional monthly charges for each ala carte channel. I escalated through the call center seeking someone who could actually articulate and understand the position of a long standing customer paying for “all everything” having that change without warning and then being asked to pay more for the everything that was supposed to come in the package.

Alas, Comcast is good a shielding the corporate policy wonks from customers…At that time, I inquired if there was a new “all everything” package. No is the answer to that. The only way to get the content is to sign up for ala carte channels. So, I informed them at that time that they left me no choice but to explore other options and act upon them. The customer service director was fine with that acknowledging it was my right to do so as a consumer. Very little time or effort was spent in attempting to convince me that there was a solution to this problem, it was a simple hide behind corporate policy and you’re screwed kind of experience.

Since there aren’t competing cable companies available here, I started looking at internet content (not there yet) and satellite cable companies, of which there are two, Dish and DirecTV. Either of them would have worked, but one of them, DirecTV, had exactly the package with the content I desired. So, after reading the horror stories of customer support and contracts, I signed up with my eyes open (after all, these companies are really no different than Comcast.) The sign up and installation went without a hitch and I had access to the content I wanted at a price that is 2/3 of what I was paying Comcast.

I then called Comcast to cancel my cable service, that’s where the next bit of stupidity begins. They are now trying to save me as a cable subscriber, after I’ve signed on to the new service and they run down the litany of why cable is superior to satellite (it’s still early days on the new service, but as yet, I see no difference in quality of service between the two products.) When it’s clear that I’m not going to be moved from the decision, they drop the bomb shell: “In that case, your internet access speed will drop by 33% and your internet access price will increase by 50%.” My jaw hit the floor, I asked if they wanted to keep my internet access business. Yes, they say. Then I ask, why would you think you would keep the business when you simultaneously decrease my service level and increase my cost. There is no answer to that other than it’s corporate policy. (Note, there is no technical reason for the service level to change.)

The Comcast policy is that you can’t have 6mb internet access service unless you subscribe to a cable package as well. The alternative to keep equivalent service levels is to undergo a 75% price hike from my current internet access charges. Needless to say, I’m now looking for an internet access company. I predict when I do make the change that they will try to save me again at that point…the point that is too late.

Let’s do some math. These aren’t the exact numbers, but are close enough and are agreeably round. This month, Comcast got $160 from me, $120 for cable and $40 for internet access. That comes out to $1920 per year. I had been a subscriber at roughly those rates for 7 years, or $13440 of revenue. Next month, I will pay Comcast $60 for degraded internet access and DirecTV will get $80. The month after that, Comcast will get $0 from me as a customer, though they would have had the opportunity to collect as much as $720/year from me as an internet access customer if only they weren’t trying to bully me into a bundle by degrading my internet quality of service while simultaneously increasing the price.

Who wins in this mess? DirecTV, a to-be-named internet access company, and me (less the hassle of having to make the changes.) When I returned the cable boxes etc. to the local office yesterday, the clerk said “switched to satellite?” I said yes, she said, “we’re losing our whole cable subscriber base here, I hope corporate will do something about this I’d like to keep my job.” There are around 25,000 people on the coast, apparently I was the 20th cancellation this week…

It all could have been avoided by actually talking to a relatively happy customer and simply meeting my needs. Good luck Comcast, if my experience is in any way typical, your policies will drive you out of business.

Ohio State’s 2006 record: 8-0 Next up: Minnesota 10/28
Tune: Give me one reason by Tracy Chapman
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