Gored!

Memory Lane

Sometime around 1989, construction crews for a cable television company owned by a New York investment firm tromped carelessly across the front lawn of a customer in Tennessee, generally making a mess of things. As it turned out, there was more at stake to the incident than an angry customer.

The workers that afternoon had unwittingly contributed to a regulatory firestorm that would end up imposing severe restrictions on the way the entire U.S. cable industry operated. Turns out that particular Tennessee front yard belonged to the mother of the U.S. Sen. Albert Gore, one of a handful of influential Senate democrats who had come to view cable as an out-of-control monopoly with growing market power and little restraint on its behavior.

It’s a stretch to think that Gore, the man who later would describe himself as the man “who used to be the next president of the United States” was moved by his mother’s complaints to challenge the regulatory approach governing an entire industry. But the incident in Tennessee certainly didn’t help. Within a few years, Gore and a core group of allies in Congress had written and managed to pass federal legislation – the Cable Television Consumer Protection and Competition Act of 1992 – that slapped cable with a parade of in-your-face rules and restrictions. Among them: prescribed performance demands for customer service.

At the time, the cable industry had a problem, and everybody knew it – not just Al Gore’s mom. The industry’s record for customer service was pockmarked by slow response to signal outages, a steady diet of rate increases fed to customers, and perhaps most frustrating of all, a seeming invisibility to customers.

For an industry that was growing fast, delivered a service much in demand by the nation and was dependent on its individual relationships with customers, the seeming inattention to basics of customer service was puzzling. But it wasn’t unique. There is a long history of industries performing miserably in terms of service. Airlines shared with cable a habit of appearing indifferent to customers, for instance. Banks regularly score poorly in customer service rankings, and so do mobile telephone companies. Each deals with massive amounts of customers with services or products that touch lives frequently and in important ways. Consumers also tend to be frustrated because they find it difficult to change providers easily.

That, more than anything else, seemed to be at the heart of cable’s service problem in the 1980s. What seemed to infuriate customers was the absence of an alternative. Although cable industry executives and public-relations people denied it whenever the chance arose, the industry looked and behaved like a monopoly. Even the most angry and fed-up of customers usually had no alternative beyond the locally franchised cable company for watching, say, ESPN or CNN.
That began to change, of course, in the early 1990s with the launch of satellite television service from Hughes Aircraft Co.’s DirecTV, the PrimeStar satellite service and later, Dish Network. For the first time in most markets, customers had a choice in multichannel television services.

The 1992 Cable Act included a series of customer service standards designed to be enforced by local franchising authorities. Among them: Calls to a cable system must be answered within 30 seconds, service appointments must occur during a four-hour time block, and customers should hear a busy signal no more than 3 percent of the time.

But the sting of falling short on a published service pledge enforced – or not – by a local franchising authority felt nothing like the sting of losing a customer to a new competitor, especially at a time when thumbnail calculations of cable asset values began to soar past $3,000 per subscriber. The onset of meaningful competition, more so than the ’92 Cable Act, propelled improvements in cable’s customer service routines and the infrastructures behind them. Service windows shrank. Long hold times vanished. Pay rates for CSRs rose.

True, the industry has a long way to go. In the most recent American Customer Satisfaction Index published by the University of Michigan, cable remains behind its satellite rivals for overall customer service rankings. As cable’s multiplicity of products grows, so have challenges in meeting customer expectations. But on balance, the industry is doing a better job today than it used to, mainly because there’s no choice. Competition’s tough, but it also has made cable better. It’s also worth remembering that satellite television wasn’t around with any degree of scale when construction crews dug up Mrs. Gore’s lawn. If it had been, it’s entirely possible Al Gore would have found another issue to pursue.

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