| BUSINESSWEEK ONLINE : OCTOBER 18, 1999 ISSUE | ||||||||
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| COVER STORY
Some Sorry Scores from AT&T's California Testbed AT&T CEO C. Michael Armstrong knows the importance of customer service. Even after AT&T closed its deal to acquire cable player Tele-Communications Inc. in March, he didn't want to change the corporate name right away. The reason? He knew many TCI customers despised their cable service, and he didn't want to tarnish the AT&T brand. Instead, he set up a system of about a dozen quantitative measures to test customer satisfaction. At first, a measly 56% of TCI's customers were ranked as satisfied. But by the end of June, that had soared to 94%. "That's when we repainted the 30,000 trucks and changed the uniforms," says Armstrong. Hold those paintbrushes: Armstrong's work, as it turns out, is far from over. In Fremont, Calif., where it is testing new telephone and Internet access services, AT&T is drawing fire. Some customers who use its local-phone service that runs over the cable network have complained of billing, quality, or service problems. Many others are upset with the service from Excite@Home, the Net access provider in which AT&T gained voting control as a result of its TCI acquisition. "It's fascinating to see how a company can ruin a great brand," says Sanjay Waghray, a 41-year-old software engineer at Intel Corp. who uses Excite@Home. "The negative brand, TCI, is rubbing off on the good brand, AT&T." DRASTIC ACTION. There's no question consumers want the services AT&T is offering. AT&T's local-phone service can be 25% or 30% less expensive than Pacific Bell, the dominant local-phone player. But cheaper isn't always better. Schoolteacher Alisa Daskarolis, for example, says the quality of sound on her phone line is worse than it used to be with Pacific Bell. Fremont resident Robin Hobbs lost his phone service in September when a cable was cut. Although the accident was caused by another company, he was disappointed with AT&T because he felt the company was unresponsive -- until he took drastic action. "I called the local newspaper because I thought that might speed things up," he says. "It seemed to work." Service was restored in about 20 hours. That pales in comparison to the problems with Excite@Home. The many techies residing in Fremont, near Silicon Valley, love the prospect of getting hooked up to the Net at speeds 20 times faster than traditional modems. But they've run into a gaggle of problems: lost e-mail, billing snafus, irregular connection speeds, and hold times on telephone help lines that can exceed an hour. On Oct. 1, for example, Waghray says he lost 70 e-mail messages. He called customer service four times to complain and was on hold for 90 minutes. As if poor service isn't bad enough, some of his bills have been wrong. "They've overcharged me every month for the past three or four months," he says. Now the Excite@Home glitches are beginning to reflect on AT&T's phone service. Bruce J. Brown, the owner of a tech consulting firm, says the reliability of Net access is so spotty that he turned down the opportunity to be part of the phone-over-cable trial and receive $150 a month. "God, no, I'd never touch that," he says. "As far as I can tell, their infrastructure can't support reliable Internet service. Why would it provide reliable phone service?" NEW REGS? Even the city of Fremont is getting into the act. In the wake of customer complaints, the city council on Oct. 7 voted to impose performance standards for Excite@Home. The vote came just two days after Dan Schoenholz, an analyst in the city manager's office, recommended that the city council adopt the same standards for Net access that it has for cable television. That would mean, among other things, customer-service calls would have to be answered within 30 seconds 90% of the time. AT&T says it's working to correct the service issues. It has hired 200 people to improve call-answering times at Excite@Home, and it thinks the problems with cable telephony are minimal. "I think it's going extremely well," says Curt Hockemeier, who is overseeing the telephone service rollout. And there are plenty of happy fans. One of the biggest supporters of Excite@Home is Joseph M. Smith, an engineer for AT&T competitor MCI WorldCom Inc. The 45-year-old has been using the service ever since it became available nearly four years ago and likes the blazing speed. "It's great," he says. Yet even he had a quibble: He called customer service on a recent night at 10:30 and was on hold for 40 minutes. As AT&T moves beyond the long-distance business, Armstrong will have to work overtime to keep his brand intact and the complaints at bay. By Peter Elstrom in New York, with Peter Burrows in Fremont, Calif. _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ BACK TO TOP |
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