How to Misuse American Customer Satisfaction Index Data to Try to Block a Merger

[Commentary] Opponents of the Comcast/Time Warner Cable merger have scrambled to show that companies with larger market shares will hurt consumers, proposing theories built around flawed assumptions.

One metric that they have stumbled upon is data from the American Consumer Satisfaction Index, which gives Comcast, Time Warner Cable, and other television and Internet service providers low scores as compared to other industries.

First, the ACSI data actually shows that providing reliable, high-quality Internet and television services across a national network is much more difficult than taking a hamburger order or shipping products bought online. Where a lot can go wrong, much of it beyond the control of the provider, it’s tough to keep customers happy.

Second, greater size does not equal poorer service. Even though the British marketplace contains more competitors, UK television and Internet providers get scores just as low in comparison to other British industries and US TV and Internet providers. The similarity in the US and UK scores is striking, and the fact that UK ISP scores are similar, even with type of wholesale ‘open access’ regime cable critics long for, is a key point. What drags down scores for both Internet and TV providers are scores for call centers and web-pages.

Finally, ACSI data shows that broadband and TV providers are steadily improving. Ratings for the pay-tv industry as a whole grew 3 percentage points from 2012 to 2013 (ratings from 2012 for Internet providers were not available). Constraining Comcast and Time Warner Cable from utilizing economies of scale to lower costs for consumers will not magically make automated call centers more fun to navigate.