On Tuesday morning, Verizon announced its plans to acquire AOL for $4.4 billion in cash. The deal generated its fair share of surprise; with many wondering why. But the amount of people still paying for dial-up and how much they pay is just as surprising.
Cable television subscribers dodged a major bullet when Comcast’s proposed merger with Time Warner Cable fell through earlier this year. Even so, Comcast remains the largest cable television provider in the U.S. In both 2010 and 2014, Consumerist named Comcast “Worst Company in America” thanks to its ever-increasing prices and endless stream of consumer complaints. And year after year, Comcast finds itself at the bottom of the American Consumer Satisfaction Index (ACSI). In a free-market system, customers who are treated badly should be able to take their business elsewhere. However, that’s easier said than done when options are so limited.
2. Time Warner Cable
In early 2013, Time Warner, the U.S.’ second largest cable television provider, announced it was launching a $50 million ad campaign in hopes of winning back customers it had lost, including 140,000 subscribers in 2012’s third quarter. Clearly, Time Warner was worried about customers switching to DirecTV for television or from cable broadband to Verizon FiOS for their high-speed Internet needs, but when it comes to cable, Time Warner dominates the market in many areas, and that lack of real competition has resulted in terrible customer service. According to ACSI, Time Warner Cable has ranked consistently low for customer satisfaction.
As some of Verizon’s FiOS customers see it, the telecom giant does have one redeeming quality: it isn’t Comcast. In May, Verizon agreed to pay a $90 million penalty after the FCC and the Consumer Financial Protection Bureau went after it for cramming, the unethical practice of adding unauthorized third-party charges to a customer’s bill in exchange for a commission. The cramming charges, which show up on the bill as a fee or tax, could range from a few cents to several dollars.
In 2012, Lifehacker.com conducted a survey on customer service and compiled a list of the five worst companies. Comcast, not surprisingly, came in at #1, and #2 was AT&T (the other three were Time Warner Cable, Verizon and PayPal). The most common complaints included slow data connections, dropped calls and billing errors. And if customers grow fed up with AT&T’s poor service and decide to go elsewhere, it comes at a heavy price: another major complaint was AT&T’s exorbitant fees for early termination.
5. United Airlines
In the U.S., there have been so many mergers that only four airlines—United, American, Southwest and Delta—now control 85% of domestic air travel. The result of all this consolidation: higher fares and worse customer service. According to the Department of Transportation, airline-related complaints increased by 26% in 2014. The number of lost or delayed bags increased by 17% between November 2013 and November 2014. And the larger United has become, the more customer service has suffered. In a November 2014 commentary for the New Yorker, Tim Wu listed a variety of ways in which the United/Continental merger had been terrible for consumers, from soaring baggage fees to ruder flight attendants to escalating fares (some as much as 57% higher on routes that became uncompetitive thanks to the merger).
6. American Airlines
If one dislikes the customer service at United, American Airlines isn’t likely to be much better. According to OSPIRG’s report, American “has generated increasingly more complaints per 100,000 customers since 2009” and “is now one of the most complained-about airlines.” Canceled flights were a common complaint in OSPIRG’s report, while “other top problems were about baggage, customer service” and “issues with reservations, bookings, and boarding.”
7. Bank of America
On May 6, Vermont Sen. Bernie Sanders unveiled a bill that calls for breaking up the largest banks within a year, including Bank of America. Sanders’ bill has zero support from Republicans in Congress, but the very fact that he is making such a proposal is a plus. BofA, one of the behemoths that was considered “too big to fail” during the Panic of 2008, has been allowed to keep growing larger, and the larger it becomes, the worse its customer service gets. In March 2013, the Wall Street Journal reported that nearly one-fourth of all consumer complaints CFPB was receiving were BofA-related.
8. Wells Fargo
In May, two major lawsuits were filed against Wells Fargo: one in a federal court, the other a state lawsuit filed by Los Angeles City Attorney Michael Feuer. In both lawsuits, Wells Fargo is accused of exploiting customers by opening unwanted accounts in order to generate fees. Matthew Preusch, an attorney in the federal case, alleges: “We have heard from Wells Fargo customers in multiple states who have been charged fees or faced collection actions for accounts they did not sign up for.”
The Affordable Care Act of 2010, aka Obamacare, has brought some desperately needed reforms to the health care insurance industry in the U.S. One of the goals of Obamacare is injecting more competition into that industry. However, the ACA needs to be expanded considerably, and doesn’t do enough to rein in companies like Aetna, which has a long history of raising premiums considerably while subjecting Americans to abysmal customer service.
10. Anthem Blue Cross/Blue Shield
In 2011, the American Medical Association reported that 19.3% of health insurance claims were being processed incorrectly in the U.S. Anthem Blue Cross/Blue Shield, aka Anthem, Inc., was among the worst offenders: only 61% of its claims were being processed correctly. But despite its bungling and atrocious customer service, Anthem Blue Cross/Blue Shield wasn’t exactly known for reasonable prices. In 2009, Anthem Blue Cross raised rates as much as 68% on some individual policies in California only to announce that there would be additional rate hikes of up to 39% in California the following year.
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Verizon Communications announced Tuesday official plans to buy AOL,
Inc. in $4.4 billion cash deal that will merge the nation’s largest
wireless provider with the once dominant internet-media provider.
Allowing the two companies to coalesce into one giant telecom axis of evil could have amounted to a disaster, especially since the result would have been a formidable cable monopoly that would have crushed competition across the nation. Had the merger gone through, Comcast/TWC would have controlled 40 percent of the broadband market in the United States—and benefited from duopolies with Verizon and our old friend AT&T in many other markets. Confronting the AT&T merger, however, is slightly more complicated. Setting aside the nation’s dislike of the telecommunications provider, the connection between television services and the future of the Internet might not seem obvious.
Verizon announced Tuesday morning that it plans to buy AOL for $4.4 billion. The all-cash deal between the telecom giant and the owner of The Huffington Post will reportedly be completed this summer, pending regulatory approvals.