Consumers to Cable: You Stink
The two industries together score 62 on the 2007 index. Although they're up a point from last year, they're actually down a point from their average going back to 2002.
To get an idea of how bad a score of 62 is, look at other industry sectors. Airlines score a point higher, at 63. The U.S. Postal Service: 72. Banks: 77. Health insurance: 72. Cigarettes: 78!
A commentary by Prof. Claes Fornell of the University of Michigan cites several reasons for the abysmal performance. One is reliability. When companies win new customers via acquisition, integrating them may cause bumps in service. And consumers who sign up for the hot triple-play packages get upset when they discover outages affect more than one service at a time.
Another factor cited by Fornell is "monopoly-like pricing in the cable industry: basic cable services rose 5 percent in 2006 and 93 percent over the past decade, nearly four times the rate of overall consumer prices during the period. Such pricing power usually comes with some level of monopoly protection and most cable companies have little competition at the local level. This also means that a cable company can do well financially even though its customers are not particularly satisfied."
One big question: Will the telcos do better?