Los Angeles Wave: Comcast-NBC Universal merger examined at special House hearing
By LEILONI DE GRUY
The proposed merger of cable giant Comcast and NBC-Universal could prove detrimental to underrepresented groups, according to several people who testified Monday at a special hearing of the House Judiciary Committee.
But to others who spoke during the hearing, held at the California Science Center, it may be the start of a landmark venture that could boost minority participation in mass media.
"While I am not opposed to this merger," said Rep. Maxine Waters, who helped persuade the Federal Communications Commission to extend public comment on the corporate maneuvers by 45 days, "I have long maintained that the Comcast-NBC merger raises serious questions and should not be rushed through an expedited review process."
Due to deregulation and federal agencies' approval of media mergers, today only five companies own the major broadcast networks. Ninety percent of the top 50 cable networks produce three-quarters of all prime time programming and control 70 percent of the prime time television market share.
In 2007, minorities owned only 3.2 percent of the U.S. television stations and 7 percent of the nation's radio stations, despite making up more than 34 percent of the population.
The hearings, convened by Waters, were called to examine the implications of the merger and provide better understanding of what effect it could have on consumers in an already heavily-consolidated media marketplace.
More importantly, Waters added, its purpose was to look at several factors, including "a deeply rooted preference for preserving and enhancing competition, accelerating private deployment of advanced services, promoting diversity of license holdings, and generally managing the spectrum in the public trust."
Under the terms of the agreement, Waters said, Comcast stands to gain majority ownership and control of NBC Universal's two broadcast television networks — NBC and Telemundo — along with 26 locally-owned and -operated broadcast television stations, multiple national cable programming networks, a motion picture studio, an international theme park business and NBC's online content business.
Today, Comcast owns cable franchises in 39 states and has 23.9 million customers: 15.3 million high-speed Internet customers, and 7 million voice customers.
On a list of post-merger commitments, Comcast has pledged to add two new independently-owned and operated cable networks to its system for each of the next three years. This would be accomplished by allowing at least half of six networks to be substantially owned by minorities. NBCU has also committed to a major effort to identify qualified minority buyers for KWHY-TV, an independent Spanish-language broadcast station in Los Angeles.
Comcast and NBCU would also establish four external Diversity Advisory Councils representing African-Americans, Latinos, Asians, Pacific Islanders, and other diverse communities. Upon approval of the merger, the councils would meet with Comcast and NBCU executives twice a year to discuss their progress.
NBCU has also pledged to expand and continue to support five diversity programs targeting different aspects of entertainment production, including program development and management. Another six diversity programs would target news production. In addition, NBCU would expand its participation in the Emma Bowen Foundation, which is dedicated to preparing minority youth for careers in the media industry, by sponsoring at least 50 students per year for the next five years.
In terms of philanthropy, Comcast and NBCU said they are prepared to increase investment in minority-led and minority-serving institutions by 10 percent each year for the next three years. Lastly, the companies have pledged to do more business with minority-owned vendors by encouraging top suppliers to purchase goods and services from them.
While some panelists viewed the list of enhancements as a start, Waters noted that they were not part of the proposal until the legislators intervened, and she questioned how they would involve minority communities in the process.
According to Paula Madison, executive vice president for diversity at NBC Universal, the company has a record of contributing to minority communities and recruiting minorities for positions, but also saw a need to "expand upon earlier commitments."
"Quality content is expensive to produce. Comcast's investment in NBC Universal will ensure that we continue creating compelling programming and bringing new jobs to Southern California," said Madison. "I sit here today proud of my company and the leadership we have [shown] and continue to show in opening the doors of opportunity for those who want to pursue career paths both in front and behind the camera."
Writer, producer and actress Sally Hampton, who has been in the entertainment industry since the early 1980s, said she has seen past mergers approved on similar promises. But once the have acquisitions are complete, she said, progress invariably stalls.
Those were the exact sentiments of panelist Samuel Kang, managing attorney for the Berkeley-based Greenlining Institute, a nonprofit consumer advocacy group. According to Kang, both NBC and Comcast struggle with employing minorities in their workforce and placing them in management positions, and have a history of systematically dismantling Spanish-language stations.
In a written response by Comcast, in response to questions submitted by several members of the U.S. House of Representatives, it was revealed that the company employs 106 executives of color — 48 African-Americans, 29 Asians, 21 Hispanics, five Native Americans, and three of two or more races. White executives, however, amount to 871. Of these figures, 729 are male and 248 are female.
"The reality is that despite their substantial holdage, none of their channels are minority owned," said Kang, "when management actually have the ability to hire and influence contracts."
Kang said in December 2006, NBC Universal eliminated locally-produced Telemundo stations and newscasts in seven market, replacing them with regional content transmitted from consolidated hubs. As a result, he said, the ranks of reporters, camera operators, production team members, and producers were gutted. Due to outrage, NBCU brought back four local television newscasts in 2010, though they do not rely on locally generated content.
In 2008, Comcast consolidated its east coast operations, cutting roughly 300 positions. The proposed merger, some witnesses and audience members argued, will lead to further decreases in the workforce, and boost the cost of broadband services and cable packages.
Jim Weitkamp, vice president of Communications Workers of America, said his dealings with both companies left him with the impression that they routinely engage in anti-competitive and anti-union behavior. With too little competition, he said, cable rates will rise and companies will bundle less desirable programming, while limiting access to content in the online video market.
The consolidation of content and distribution in entertainment and media has significantly diminished opportunities for minority professionals rather than accelerate and increase it, said Suzanne de Passe, co-chair of de Passe Jones Entertainment and a former Motown Records executive.
With few exceptions, the same networks that broadcast shows like "The Cosby Show," "Fresh Prince of Bel Air," "In Living Color" and others now only offer a minority cast members here and there, said de Passe. Further, she argued that they attempt to appease underrepresented communities by providing long lists of contributions to charities under the catch-all word "diversity."
"Today when we walk into movie studio, network, and cable meetings to pitch a project, we already know that we are going to be required to give up all ownership in exchange for reduced fees and the likely possibility of being fired off the project without cause at the discretion of the studio or network," said de Passe. "In other words, we bring a hit project, retain no ownership, lose control of the intellectual property, get paid less, likely generate significant revenue for the studio or network and end up getting bounced out the door with no further participation in the ongoing success."
While de Passe takes these views, she believes Comcast has both the financial and distribution resources to use the merger as an opportunity to create meaningful and institutional change — but only if Comcast takes its leadership seriously, as it relates to opening more doors for people of color as it cited in its list of commitments.
Alfred Liggins, CEO and president of Radio One, believes both companies are "good" and "solid," and will provide programs that uplift and inspire the communities they serve.
According to Will Griffin, CEO of Hip Hop on Demand, both Comcast and NBC Universal have "the best infrastructure to build on," but also recognized that a large issue lays within advertisement, which racks up a large profit. Griffin contends that advertisers will only give a certain percentage African American shows.
"It is my hope," said Waters, "that the parties to this merger can find ways to mitigate the potential harm this deal could have on consumers, competition, and minority communities' access to quality and affordable broadband service."