In Depth

Complete Letter Sent By Los Angeles Rep. Maxine Waters to FCC Chairman Julius Genachowski on Dec. 20, 2010 About the Pending Comcast-NBCU Deal

December 20, 2010


Julius Genachowski
Chairman
Federal Communications Commission
445 Twelfth Street, SW
Washington, DC 20554

Re: Applications of Comcast Corporation, General Electric Company and NBC Universal, Inc. For Consent to Assign Licenses or Transfer Control of Licensees, MB Docket No. 10-56

Dear Chairman Genachowski,

As a Member of the U.S. House of Representatives, I write with further inquiry into the proposed Comcast-NBCU acquisition, and the standards under which the Federal Communications Commission (FCC) determines whether a merger will serve the public interest. According to the Supreme Court and the Commission’s precedent, factors considered to be in the public interest include, “a deeply rooted preference for preserving and enhancing competition; promoting a diversity of license holdings, and generally managing the spectrum in the public interest."(1)

While Comcast Corporation and NBC Universal (NBCU) have filed a number of memoranda of understanding (MOU) and voluntary diversity commitments they have reached with the African American, Asian American, and Latino communities, many of the proposed conditions appear to be a series of vague goals and nominal gestures – lacking specificity and binding authority on the applicants. I am further alarmed by the fact that Comcast-NBCU has not filed any of these diversity pledges as official amendments to its application. Since the Commission has had difficulty enforcing diversity conditions in previous proceedings (most recently the order requiring Sirius XM channel set asides), I believe it would have been a reasonable good faith gesture for the companies to file these pledges as amendments, signaling their genuine intent that the Commission condition the merger’s approval upon the merged entity’s fulfillment of these voluntary commitments. Because Comcast-NBC negotiated these diversity pledges as stand-alone agreements, there is no real assurance that the merged entity will honor them.

Although the civic organizations and community leaders who helped forge these agreements likely negotiated in good faith, absent further action by the Commission, I am afraid that these commitments will result in yet another set of broken promises between communities of color and large corporations. Even as these groups enter into new MOUs with Comcast-NBCU, earlier this month, the National Latino Media Council proclaimed that all of the networks (including NBC) “pretty well failed Latinos in their progress on diversity practices.” It appears that NBC Universal has not made much progress since signing an earlier MOU(2) with the civil rights community in 2000, and we have nothing to indicate that these new MOUs will change what has been a steady decline in diversity among all the major broadcast networks. To that end, I remain very concerned about how the Comcast-NBCU merger will further erode the Commission’s capacity to promote diverse, independent, and competing sources of information(2). Therefore, as a matter of guidance for the public and Members of Congress, I urge the Commission to clearly define ‘diversity’ and the types of public interest conditions that promote “diversity of license holdings and broadcast viewpoints.” If the Commission ultimately approves the Comcast-NBCU merger, it must be conditioned upon substantive and enforceable commitments that are in conformity with the agency’s statutory standards and goals(4).

Since the Comcast-NBCU merger was announced last year, I have participated in the Commission’s public proceeding as well as several congressional committee hearings. I have repeatedly encouraged the companies to use this unprecedented merger as a vehicle to advance credible opportunities for minorities and women in media ownership, programming, management, and advertising. Yet, at every turn, the companies have sought to proceed through the regulatory review process without having to diverge too far from their contemplated post-merger plans. For example, upon being asked by Multichannel News how Comcast and NBCU felt about the public interests commitments and conditions they have presented in efforts to gain federal agency approval, two key executives from within the corporations (speaking under anonymity) replied: “It was easy for us to agree [to the commitments] because it was just a way for us to make them feel better about the transaction without us giving up anything in terms of our contemplated operation of the combined Comcast-NBCU.”

Indeed, as various stakeholders and civil rights organizations have taken an interest in the merger, Comcast and NBCU have made haphazard attempts to address their diversity concerns through memoranda of understanding and other diversity proposals. However, due to the FCC’s lack of clarity on diversity, many participants within this proceeding have conflated media diversity with charitable giving and investments in new Comcast subsidiaries. While charitable gifts serve a critical social utility, they are not a proper gauge for whether a corporation is fulfilling its commitment to the public interest, as is statutorily required of FCC license-holders. In any case, many of the provisions within these proposals are unenforceable, and recent reports of Comcast’s alleged anticompetitive business conduct do little to instill confidence in their intent to fulfill these diversity commitments as filed with the Commission.

In fact, as Comcast-NBCU continues to laud its commitment to launch ten independent channels over eight years as a landmark concession (without going into detail about carriage and placement), the Commission continues to receive program access and carriage complaints from larger and more established networks and companies. I hardly believe Comcast will abruptly decide to negotiate in good faith with smaller and/or new independent channels, when networks such as the NFL Network, Wealth TV, and the Tennis Channel have had carriage complaints against the company.

Moreover, while the companies continue to commit to “improve” diversity in executive management, when incoming NBCU Chief Operating Officer Stephen Burke announced the new executive leadership on November 18th, there were no minorities announced to oversee any of Comcast-NBCU’s cable, motion picture, or Internet properties. Notwithstanding the announcement’s impropriety, this could have been an opportunity for Comcast to signal to the African American, Asian American, and Latino communities its expressed commitment to promote qualified minorities to high-level executive and management positions. Of the 30 new executives (some pulled from the current NBCU team) announced in the Los Angeles Times article(5), there was only one African American listed (NBCU’s current diversity officer will retain her position). Altogether, only four of the new Comcast-NBCU executives listed in the article are minorities. However, none of these individuals are on tap to lead the merged entity’s massive cable, content, and programming operations.

During the congressional hearings on the merger, many individuals from within the creative arts community have stressed the importance of having diversity in these executive positions as they have the potential to extend opportunities to a diverse pool of writers, directors, actors, producers, and programmers. While the regulatory agencies are not in place to micromanage corporate hiring practices, the FCC is charged with promulgating policies that promote diversity of broadcast viewpoints and responsible spectrum allocation. In this regard, it is within the Commission’s jurisdiction to consider whether a company’s current practices further or impede those goals in analyzing the potential harm the Comcast-NBCU merger may have on the public interest. It has long been a basic tenet of national communications policy that “the widest possible dissemination of information from diverse and antagonistic sources is essential to the welfare of the public(6). ”

Therefore, in addition to clarifying its definition of ‘diversity’, I strongly urge the Commission and the Department of Justice (DOJ) to consider public interest proposals advanced by the FCC Advisory Committee on Diversity for Communications in the Digital Age as a framework for substantive and enforceable diversity conditions. For example, the S-License Proposal would promote greater media ownership diversity(7), furthering the Commission’s goal to ensure efficient spectrum use and diversity in the media. This proposal would allow Comcast-NBCU to sublease or otherwise permit full-time or part-time use of portions of its multiplexed program feeds for the transmission of programming by unaffiliated entities which would be separately licensed by the Commission under its own share-time rule(8). In voluntarily committing to this proposal, Comcast-NBCU could narrowly tailor the program to new market entrants, serving local multicultural and multilingual audiences, or simply limit the program to socially and economically disadvantaged businesses(9). This proposal would afford diverse entrepreneurs the opportunity to enter the market in a way that closely resembles traditional broadcast ownership, and it is more substantive than Comcast-NBCU’s current commitments to employ minorities in subordinate positions and create additional Comcast subsidiaries.

I commend the Justice Department and the FCC for its extensive review and ask that you take the necessary amount of time to consider the voluminous record of unprecedented public and congressional participation. I also recommend that the Commission encourage the applicants to file the MOUs they have reached with civic and professional organizations as amendments to their application. If the Commission and DOJ approve this merger, the public will heavily rely on your conditioning this acquisition upon substantive conditions that mitigate the potential harm many believe this merger will cause to our nation’s media landscape. I look forward to your responses to the questions outlined above and urge you to closely examine the very serious public interest concerns that I and other Members of Congress have raised in previous correspondence. I respectfully request that you include this letter in the record, as well as the attached transcripts from the congressional hearings on the Comcast-NBCU merger and a report prepared by my office on the companies’ cable and content properties.

Sincerely,

Maxine Waters
Member of Congress


cc:
Commissioner Michael J. Copps
Commissioner Robert M. McDowell
Commissioner Mignon Clyburn
Commissioner Meredith Attwell Baker

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1. FCC v. RCA Communications, Inc., 346 US 86, 90 (1953)

2. Television Networks Fail Latinos in Diversity, Hispanically Speaking News, December 3, 2010 (http://www.hispanicallyspeakingnews.com/notitas-de-noticias/details/television-network-fail-latinos-in-diversity/3316/). In 1999 - 2000, the Multi-Ethnic Media Coalition, a group comprised of the National Latino Media Council, the National Asian/Pacific American Media Coalition, the NAACP and the American Indians in Film and Television, signed Memoranda of Understanding with the four major television networks, ABC, CBS, FOX and NBC.

3. See In the Matter of Section 257 Proceeding to Identify and Eliminate Market Entry Barriers for Small Business, Report (http://www.fcc.gov/Bureaus/OCBO/fcc00279.html). The FCC has said that it is committed “to implement the spirit and mandate of Section 257 of the Communications Act to promote policies ‘favoring diversity of media voices, vigorous economic competition, technological advancement, and promotion of the public interest, convenience, and necessity.”

4. See, e.g., Turner Broadcasting System, Inc. v. FCC, 512 U.S. 622, 663 (1994) quoting United States v. Midwest Video Corp., 406 U.S. 649, 668 n.27 (1972). Specifically, under the Public Interest Test, the FCC considers whether the transaction is consistent with the Commission’s policies to advance diversity. It has long been a basic tenet of national communications policy that “the widest possible dissemination of information from diverse and antagonistic sources is essential to the welfare of the public.”

5. Meg James, Comcast Unveils Management Team for NBC Universal, Los Angeles Times (2010).

6. See, e.g., Turner Broadcasting System, Inc. v. FCC, 512 U.S. 622, 663 (1994) quoting United States v. Midwest Video Corp., 406 U.S. 649, 668 n.27 (1972).

7. Section 309(j) of the Communications Act of 1934 reflects the directive of Congress that the FCC further opportunities in the auction of licenses to provide spectrum-based services for small businesses and businesses owned by women and minorities.

8. 47 C.F.R. §73.1715

9. Section 257 of the Communications Act of 1934 (added as part of the Telecommunications Act of 1996) mandates that the FCC identify and eliminate market entry barriers for small telecommunications businesses.