Rep. Tony Cardenas (D-CA) and 52 other House lawmakers are asking Comcast to make a commitment to carry Latino-focused channels as the cable giant seeks to acquire Time Warner Cable. When Comcast acquired a controlling stake in NBCUniversal in 2011, it committed to adding 10 new independent channels by 2019, as well as to increased carriage of independent networks. The company said in a recent diversity report that it has greatly increased on-demand and online content aimed at the Hispanic market, as well as for other groups, since the end of 2010, noted a Variety story.
In a letter to Comcast CEO Brian Roberts and Time Warner Cable CEO Rob Marcus, the lawmakers say the newly merged company will reach over 90% of the Latino households in the United States.
The lawmakers’ letter does commend the two companies for commitments they have already made to the Latino community, but says that “in today’s increasingly consolidated media environment, these program providers are facing new challenges in addition to their historic disadvantage in the marketplace,” said the Variety story.
“For most of the Latinos in our nation, merger between Comcast and Time Warner Cable would mean one company controlling their window to the world of culture and entertainment,” Cardenas said in a statement. “Unfortunately, independent Latino program providers operate on an uneven playing field that threatens to limit the Latino community’s access to their important perspectives. For years, the nation’s largest mainstream program providers have continued to attract available channel capacity and fees from cable and satellite providers while independent program providers struggle to gain access to channels, let alone fees, for their program offerings.”
The lawmakers are asking Comcast and TWC to make a “formal commitment” to carry independent Latino channels, as well as to ensure that they will be available to a wide set of audiences and that they won’t operate on an “uneven playing field.”
In response, Comcast EVP David Cohen defended its offerings of Latino-focused content in a letter to the lawmakers, calling it “best in class in the industry.” But he also seemed to suggest that the pending merger could be used as an opportunity by “parochial business interests. Through the transaction with Time Warner Cable, we are committed to bringing high-quality Hispanic content to millions of additional Americas. My only caveat is that the importance of independent and Hispanic programming, which we are excelling at delivering, should not be confused by parochial business interests seeking more money and distribution for themselves.”
The Department of Justice and the FCC are reviewing the proposed transaction. Comcast may face additional commitments before the FCC as it conducts a public interest review.
Cohen also noted that the company distributes more than 60 Latino networks in Spanish and English and and, since the NBCU merger, launched two new independent networks, El Rey and Baby First Americas with Latino ownership and management: “Since 2011, Comcast has expanded the total distribution of seven Hispanic programming networks by more than 14 million subscribers,” he wrote. “This exceeds by more than 40 percent our commitment in the NBCUniversal transaction to expand three Hispanic networks by 10 million subscribers.”
Noted Francisco Montero, Managing Partner, Fletcher, Heald & Hildreth, P.L.C.: “Large industry media mergers are frequently a platform for urging or leveraging cooperation by the merger parties to provide greater content or ownership opportunities for small businesses and minority communities. As a condition of approving the XM merger with Sirius, the FCC required setting aside channel capacity to “qualified entities”. Similarly, with Comcast’s purchase of NBCU, the FCCs approval came with so many conditions, including the setting aside millions for minority programs that Congressman Fred Upton, chairman of the House Energy and Commerce Committee referred to it as a “Chicago-style shakedown.” With the AOL-Time Warner merger, major issues in the FCC’s deliberations were whether to require AOL to open its instant messaging network to outside providers and whether to require open access to its high-speed cable networks for rival ISPs. At other times, merger parties have voluntarily agreed to spin off divestiture properties to minority owners or contribute to equity funds to invest in minority owned ventures. So the practice is not new and when there is a large merger such the Comcast-Time Warner Cable transaction coming down the tracks, it is not surprising to see public interest groups, lawmakers and regulators look for possible concessions, frequently with a focus on assisting specific constituencies such as small or minority-owned businesses or communities. In some cases the merger parties will take preemptive action and reach out to these groups to offer concessions and form supportive coalitions in anticipation of governmental review and approval of the transaction. With so many large media and telecom mergers on the FCC’s dance card this season, I think we can expect to see many interest groups express opinions on potential merger conditions to be imposed by the Commission.”
RBR-TVBR observation: Rep. Cardenas is definitely paying close attention to the pending Comcast-TWC merger. He and seven LA area Congressional representatives signed a letter last week asking the FCC to mediate the ongoing dispute over the Dodgers’ SportsNet LA network as well. Time Warner Cable, which owns the distribution rights to the channel, has not brokered agreements with most major local providers, including DirecTV, AT&T U-verse, Cox, Verizon FiOS, Charter, Comcast and Dish Network. As a result, some 70% of Southern Californians haven’t been able to watch the Dodgers unless their games are broadcast by national networks ESPN and Fox.