The merger between cable providers Comcast and Time Warner Cable in New York City is currently up in the air, as a vote to approve the merger is being delayed. The New York Public Service Commission (NYPSC) was set to vote on a 45 billion dollar transaction last Wednesday, but the vote was pushed back until November 13th. Why are regulators against the merger of two successful companies? The answer is an often-ignored part of business deals, the quality of customer service. The reputation of both Time Warner Cable’s and Comcast’s customer service is so poor that the NYPSC are unsure if they want to go through with the merging. Outrage over the customer service of these companies has gone as far as anti-Time Warner Cable groups on Facebook dedicated to fuming customers reaching thousands of likes.
According to Kalb (2013), a writer for the Business Insider, Time Warner Cable lost 140,000 subscribers to other competitive businesses due to their reputation of poor customer service. The writers of this post have also had bad experiences with TWC and Comcast respectively so it’s understandable that NYC is not in a hurry to merge the companies. This is explained by Homans (1958) in his Social Exchange Theory, which is weighing the costs and benefits of relationships. There are many economic benefits of merging of companies, but there are also severe costs, such as a potential unsatisfied customer base. This theory entails that the New York Public Service Commission is the main decider who is dealing with the cost and benefits of this situation. They must go through a process that will show that the benefits of this merge will outweigh the costs of what could happen if these companies meshed together. However, due to the commission rescheduling the vote, they clearly have not seen that the benefits of this merge will outweigh the costs that could affect a numerous amount of viewers as a whole.
How is this damaging to Time Warner Cable’s and Comcast’s individual brands? The fact that a potential expansion of their companies’ reach is being challenged due to consumer’s opinion is a colossal issue. When a company has a poor reputation in relation to the way they handle clients it damages their overall credibility as a brand. Based on the idea of commodity culture, as consumers we identify and define ourselves with the brands we join and part take in. With TWC’s and Comcast’s poor reputations of not dedicating their employees to helping their customers to their full abilities, why would new and upcoming consumers want to join its brand and organization?
-Margaret Cafasso, Kierstin Geary, Connor Gold, Olivia Sadler, Hannah Zeskind