Charter Communications, the fourth-largest cable company in the United States, is buying Time Warner Cable, the second-largest, for $55 billion. Charter is also buying Bright House Networks, a small cable company largely based in Florida.
Together, the new company will have 24 million customers, about 3 million shy of Comcast, the largest cable company. Now the deal will face regulatory review and public scrutiny, though perhaps not nearly as intense as for Comcast’s failed bid to buy Time Warner Cable.
Before that bid collapsed, consumer groups argued that it would lead to even worse service and higher prices. Comcast insisted that the deal would do no such thing, but now we’ll never find out.
For what it’s worth, Charter is now making the same assurances to customers that Comcast did. In a statement, Charter head Tom Rutledge, who will also lead the new company, laid out all the ways the deal with Time Warner Cable will help customers:
With our larger reach, we will be able to accelerate the deployment of faster Internet speeds, state-of-the-art video experiences, and fully–featured voice products, at highly competitive prices. In addition, we will drive greater competition through further deployment of new competitive facilities-based WiFi networks in public places, and the expansion of the facilities footprint of optical networks to serve the large, small and medium sized business services marketplace. New Charter will capitalize on technology to create and maintain a more effective and efficient service model. Put simply, the scale of New Charter, along with the combined talents we can bring to bear, position us to deliver a communications future that will unleash the full power of the two-way, interactive cable network.
In reality, what the deal means for customers is probably more of the same.
The three companies don’t have any service area overlap, so it’s hard to imagine prices will come down.
It’s true, though, that the company will probably invest in broadband and streaming video. Cable companies like Time Warner Cable, Charter, and Comcast are increasingly becoming internet companies with declining side businesses in TV. In order for New Charter to remain competitive with Comcast and other companies, like Netflix, that offer alternatives to cable television, it will have to take the internet seriously. And that means investing in its future.
But what that doesn’t necessarily mean is a better overall customer experience. In all likelihood, people will continue to be seriously underwhelmed with their cable TV and internet experience. The cable guy will show up late. Your TV will cut out in the middle of Game of Thrones. Your customer service rep will not make canceling your subscription easy. But it doesn’t have to be that way.
What the new company should do is take advantage of its acquisition of Bright House, a company that consistently ranks highly in customer service surveys. Time Warner Cable is among the most hated companies in the US and is often cited as having, along with Comcast, the very worst customer service of all cable companies. Charter is not far behind.
But what if Charter is buying Bright House specifically to try to improve its customer service? Bright House brings only about 2 million customers, mostly in Florida. Perhaps the impetus behind buying Bright House was not only to have a bigger foothold in the fourth-biggest state economy in the US, but also to procure its reputation for decent service?
Comcast recently announced a sweeping new customer service initiative, with the hopes of changing its public image after the failed Time Warner Cable takeover. Whether or not anything actually changes remains to be seen, but at the very least, Comcast appears to be giving it an honest effort.
The newly combined Charter-TWC-Bright House will likely do the same, but in order for it to surpass Comcast, and not just play second fiddle, it will need to offer a superior customer service experience.