Do the Big Companies Even Want to Get it Right?

020916-F-4728F-001The latest Consumer Reports rankings are out for telecom providers, and the results are much the same as in past years. There are many different groups that rate companies and we often hear of reports that put the cable companies at the bottom of all companies in terms of customer service.

But the Consumer Reports ranking is more comprehensive. It looks at a lot of factors such as the perceived value that customers see with the provide, reliability, speeds, and support both in the home and over the phone. And they compare all of the major telecom companies and don’t compare to other industries.

Not surprisingly, HughesNet and their satellite broadband ranks the lowest. I’ve never heard anybody talk nicely about their product since it’s slow, costly and also has a lot of latency and delays. Many people say it is barely better than dial-up. It will be interesting to see how satellite ranks now that Exede is in the market with a faster product. As I reported a few weeks ago, the issue with Exede is the low total data caps, but at least the 12 mbps download is a huge improvement.

Ranked next to satellite is MediaCom which always comes in dead last among cable and telcos. Ranked next at the bottom are the various DSL providers, with Frontier, Fairpoint, Windstream and AT&T DSL. For the most part the customers on these services have older DSL technology that is only delivering a few Mbps download speeds. There is faster DSL technology available today and better ways to deploy it by bringing the DSLAMs closer to customers, but the companies listed are for the most part not pumping much money into DSL. The exception is Frontier who has gotten a pile of federal subsidy money from the new USF fund to upgrade and expand its DSL footprint.

But right next to this old DSL technology is Comcast, followed closely by Verizon DSL and then Time Warner. Verizon barely even advertises that it has DSL anymore and it is a surprise to see it more favorable with customers than Comcast.

At the top of the list and doing the best job are the smaller cable companies and fiber providers. At the top of the list are WOW and Wave (Astound) followed by Verizon FiOS.

It just amazes me to see these large companies like Comcast and Time Warner do so poorly with their customer service. They have been at the bottom of these kinds of rankings for well over a decade now and it’s obvious that they are willing to live with giving poor service. When you look at the rankings and see that Comcast is viewed by customers to be doing a worse job than Verizon and CenturyLink DSL you just have to shake your head.

It’s very obvious that they don’t care to become better because by spending some money they could do much better. Doing customer service well is not some unreachable mountain of a task. Thousands of companies do it well. If WOW and Astound can do it well, so can Comcast and Time Warner. It’s a matter of investing in the right systems, the right training and the right management of the process. Being big is not an excuse for being crappy, and if it is a valid excuse, then this alone ought to stop the Comcast / Time Warner merger.

I would think that the management of these companies would hate seeing themselves at the bottom of these lists. But they obviously like profits more than they hate doing a poor job. And that is what I don’t get. These companies have lost millions of customers due to dissatisfaction with their service and their best growth strategy is to lure back customers in their existing markets by doing a better job.

The New Satellite Internet

Communications_satellite_(PSF)A new satellite Internet service launched earlier this year. I’ve been meaning to write about this and was prompted by seeing them in a booth at a rodeo I went to on Saturday. The service is provided by ViaSat under the brand name of Exede. They launched a new satellite, the ViaSat-1, last October for the sole purpose of selling rural broadband.

The broadband they are selling is a big step up over other previous satellite broadband, including earlier products offered by ViaSat. The basic broadband product offers up to 12 Mbps download and 3 Mbps upload. I went to the web and read reviews and people are saying that they are actually getting those speeds and in some cases even a little more. I would caution that like any broadband system, as they get more customers the satellite will get contention and the speeds will slow down.

The base product is priced at $50 per month and is a huge improvement over other satellite products. Exede’s older base product was also $50 but offered 512 kbps download and 128 kbps upload. For $79 you could get 1.5 Mbps download and 256k kbps upload.

But like everything there is a catch and that catch is data caps. The speeds are a great improvement because even web browsing at 512 kbps is nearly impossible. But the caps are a killer. For the $50 product the cap is 7 Gigabits of total download for the month. To put that into perspective, that is around 4 HD movies per month.

You can buy larger caps. For $80 per month you can get a 15 GB cap and for $130 per month you can get a 25 GB cap. If you hit the cap Exede doesn’t shut you down, but instead sets you to a very slow crawl for the rest of the month.

So obviously the satellite program is not going to be useful for anybody who wants to use the Internet for watching video or doing those kinds of things that most families use the Internet for. There can be no real gaming over a satellite connection, both due to the cap but also to the latency, since the signal bounces high above the earth and back. The latency also plays hell with voice over the Internet. You can do a mountain of emails and web surfing within that cap, but you have to always be cautious about downloading too much. Imagine if you worked from home and one of your kids watched too many videos and for the rest of the month you just crawled along at dial-up speeds.

For now this is only available on the east and west coasts and won’t be available in the middle of the country until they launch another satellite. Exede has a product in the Midwest that is $50 for up to 5 Mbps download and 1 Mbps upload, but reports are that most people there are not getting those speeds.

I am the first to say that this is a big step up in the rural areas. If I was on dial-up this would feel wonderful. But any home that gets this is not getting the same Internet that the rest of us get. One of my employees has four kids and they watch 4 – 5 hours per day of Internet video. We estimated that some months he is probably using a terabit of total download. His speeds are only half of this satellite service, but the unlimited download makes a huge difference in the way his family can use the Internet.

The scariest thing about this product is that I know that one of these days that some policy-head at the FCC is going to announce that the whole country has broadband and then they can wash their hands of the rural broadband gap. This is the fastest download speeds that anybody has brought to much of rural America. But anybody on this service is going to be so throttled by the data caps that they are not going to be able to use the Internet like the rest of us. So this is a good service, but it’s not broadband – it’s something else.