Customers agree: Fiber is good for you

Telephone companies lead TV satisfaction survey

Satellite and cable television services might have more formidable competition in telephone companies than they might have imagined, judging from customers' reactions.

A study scheduled for release Tuesday found that FiOS, the fiber-optic TV service from Verizon Communications, scored the highest on a recent customer-satisfaction survey.

Adding those who are very or somewhat satisfied with their current TV provider, FiOS scored 96%. DirecTV is second with 89%, then Dish Network with 82% and Comcast and AT&T U-verse, another fiber-optic service, tie at fourth with 73%. Cablers Cox, Cablevision, Time Warner and Charter, in that order, bring up the rear.

The survey of 1,586 consumers is from ChangeWave Research.

Run by Fox News personality Tobin Smith, ChangeWave draws on an alliance of 10,000 members who are wealthier than the general public and earlier adopters of new technology. ChangeWave surveys its alliance for the purpose of locating investable Wall Street trends.

About 4% of the alliance members are fiber-optic TV subscribers, 27% are satellite subscribers and the rest are cable customers.

"What's perhaps most striking is that none of the top players in terms of customer satisfaction are cable companies," the report indicated.

When grouped by type of service, only 13% of cable customers are "very satisfied" with their TV provider, compared with 32% of satellite customers and a hefty 45% of fiber-optic subscribers.

On the flip side, cable comes out last again, with 6% saying they are "very unsatisfied," compared with 2% for satellite and fiber-optic.

When "very satisfied" and "somewhat satisfied" are lumped together, cable is at 70% and satellite and fiber-optic tie at 85%.

"Satellite subscribers appear far more content with their TV service than cable subscribers," the report found. "Although based on a smaller sample, an impressive 85% of fiber subscribers gave the newest TV technology a thumbs-up."

Naturally, the survey sought to predict the future, a profitable endeavor if ChangeWave can call it correctly. It found that 13% of its alliance are considering a change, and 44% of those plan to switch to fiber-optic.

ChangeWave director of research Paul Carton calls that "a huge eight-point jump since the previous survey."

The survey found 40% of those planning to change their service provider will switch to satellite and only 15% will switch to cable, with the majority considering Comcast and Time Warner/Road Runner.

The findings, however, are contingent on the ability of the fiber-optic providers to expand their coverage fast enough to keep up with the demand, which is no small feat.

U-verse, which got a later start than FiOS, only has about 100,000 subscribers nationwide, mostly because its infrastructure is not built out much. But AT&T has said that it will spend $6.8 billion to build its network so that it will pass 18 million homes by the end of 2008. FiOS, which passed the 1 million subscriber mark in June, already passes 5 million homes and will pass 8 million by year's end.

From 2007-11, TV provided by phone companies in the U.S. will grow their subscriber ranks by 52.5% annually to 14 million. Cable will grow at less than 1% to 67.7 million and satellite will grow at 1.7% to 30.5 million, according to PricewaterhouseCoopers.

"These findings are quite bullish for fiber-optic TV," Carton said of the ChangeWave survey. "Not all TV services are equal."