Verizon Leads Pack of ISPs, but Weak Customer Satisfaction Persists

The American Customer Satisfaction Index found wireless customers are happier as service improves and smartphones deliver the goods.

Customers are happier with telecommunication services and technologies than they were a year ago, but they are not so pleased with their Internet service providers, a new report has found.

The annual Information Sector report from the American Customer Satisfaction Index (ACSI) found that inaugural measures for the Internet service provider (ISP) industry found a customer satisfaction benchmark of 65—the lowest score among 43 ACSI industries.

Only Verizon's FiOS and the aggregate of all other smaller ISPs broke out of the 60s with identical ACSI scores of 71. Cox Communications managed to beat the average at 68, followed by AT&T U-verse and Charter at 65. The low end belongs to CenturyLink at 64, Time Warner Cable at 63 and Comcast at 62, according to the index.

"High monthly bills combined with problems across a broad spectrum of customer experience benchmarks—such as service reliability, data transfer speed and video-streaming quality—leaves customers less than satisfied with their ISP service," Claes Fornell, ACSI founder and chairman, said in a statement. "But in a market even less competitive than subscription TV, there is little incentive for companies to improve."

On the flip side, the report found wireless customers are happier as service improves and smartphones deliver the goods. The wireless phone industry performed an about-face in 2013, reversing a two-year trend of declining customer satisfaction with a 2.9 percent gain to an ACSI benchmark of 72. However, despite matching its 10-year high, wireless service remains well below the national ACSI average.

Verizon Wireless led the larger carriers thanks to a 4 percent jump to 73, leapfrogging a stalled Sprint at 71. Nearly in line with Sprint, AT&T Mobility inched up 1 percent to 70, while the sole decliner, T-Mobile, dropped 1 percent to 68. With smartphones representing just over half of all phones purchased, the report noted the industry is delivering better features and more apps consumers want.

Despite a 2 percent drop in satisfaction, Apple still dominated the ASCI survey with a score of 81—a little under Apple's benchmark score of 86 for its personal computer products. Samsung jumped 7 percent to 76 after launching Galaxy S III, but still lags significantly behind Apple's iPhone. Nokia, which rose 1 percent, also earned an ACSI score of 76, while Motorola leapt up 5 percent to 77. Handset maker HTC fell 4 percent to 72, and LG dropped 5 percent to 71. Meanwhile, newly reformed BlackBerry seems lodged in last place with a score of 69.

"Customer satisfaction with the Information sector is improving, but none of these industries score higher than the national average," Fornell said. "Limited competition combined with high consumer expectations for information services are a formula for relatively weak buyer satisfaction, despite the gains."

The report also found customer satisfaction with computer software for desktops and notebooks continues to fall. The category's ACSI score this year fell 1.3 percent to 76. Market-share leader Microsoft and the aggregate of smaller software makers both slid 1 percent to 74 and 76, respectively.

"With global PC shipments having their largest quarterly drop in 20 years, the market remains thorny," the report noted. "Windows 8, criticized by users for its interface, has not derailed customer satisfaction for Microsoft, but it has not helped either."