Captive Audience: The Telecom Industry and Monopoly Power in the New Gilded Age (33 page)

Cohen was Brian Roberts's right-hand man for the merger. In meetings with Hill staff, Cohen routinely interrupted Roberts and took over the discussion. Roberts did not seem to mind; he understood that Cohen knew what he was doing. Roberts wanted the scale and scope that the NBC Universe content would bring Comcast; Cohen was trusted to run the politics and to know where the next right place to be was.
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As Robert Huber wrote in
Philadelphia Magazine
in 2009,

But even Cohen wasn't ready for what came next.

That February, during a House Judiciary Committee hearing held the same day as the Senate Antitrust Subcommittee meeting, African American members of Congress complained that NBC programming was not sufficiently diverse; the network had not a single African American–targeted show. When Rep. Maxine Waters (D-Calif.) asked NBC Universal president Jeff Zucker why this was, he replied, “we have not found that [African American] show.” When Waters continued pressing, Zucker assured her that NBC was continuing to look for a good African American program. “Let me say that it is very difficult to accept that you cannot find the kind of program I'm talking about,” Waters said. “It is unacceptable to say you don't know … when it could happen. … I don't think black viewers would like to hear that kind of answer.” The same went for the news: Rep. Sheila Jackson Lee (D-Tex.) noted that there is no diversity on the Sunday morning talk shows, including NBC's
Meet the Press
. Waters and Jackson Lee also asked Brian Roberts why Comcast had just one woman and one African American man on its board; Rep. Luis Gutierrez (D-Ill.) noted that the board had no Hispanics. Roberts was forced to admit that he didn't have a good answer.
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A few months later, things heated up considerably: Waters and sixty-eight other members of Congress, many of them members of the Congressional Black Caucus or the Congressional Hispanic Conference, asked the FCC to extend its public comment period and hold public hearings on the merger.
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Hiring policies, board membership, and programming diversity had no relevance to the competition and concentration issues raised by the merger, but these comments hurt Comcast's public image and were important to the larger public-interest concerns at the FCC. Comcast needed to avoid the kind of interest-group politics that could destroy reputations and scuttle carefully laid plans; indeed, it had attempted to forestall objections through the public-interest commitments in its original filing. Apparently those were not enough.

After the FCC declined to hold the hearing Waters wanted, John Conyers (D-Mich.), chairman of the House Judiciary Committee, arranged for a field
hearing in Los Angeles in June. It was Waters's hearing; it was well-attended, raucous at times, frequently interrupted by applause, and nearly four hours long. Taking NBC to task for not having adequate diversity among its executives, Waters said, “If you're telling me how many janitors you're hiring, how many clerks you're hiring—that's not good enough. We know we can always get some numbers at that lower level. So having said that, let's just understand each other. This is about ownership, this is about programming, this is about executive management, this is about advertising.”
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Roberts and Zucker were conspicuously absent, but less senior Comcast executives listened politely. (John D. Rockefeller also made it a practice not to show up at hearings that promised to be unpleasant.)

During that same hearing, Stanley Washington (representing a new group called the National Coalition of African American Owned Media, which appeared to have been formed by the law firm where former FCC chairman Kevin Martin worked) described Comcast as a “plantation” and charged that the company had not done enough to ensure the viability of African American–owned channels. He called for a minority boycott of Comcast.
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There was some question of whether Comcast was carrying any African American content. An earlier effort, the Black Family Channel, had not wanted Comcast to take a stake in its operations as a condition of carriage and had ended up shutting down, leaving just one American cable network with significant black ownership: TV One. “While Comcast carries the network on its most widely distributed tier,” Waters said, “it is worth noting that Comcast owns a 33% stake in TV One.” Washington's group asserted that African Americans make up as much as 40 percent of Comcast's subscriber base but that none of the 250 channels Comcast offered was 100 percent African American owned.
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Comcast had made many contributions to minority charities, and the charities—hundreds of them—sent in letters and calls of support to lawmakers and agencies. (“It is crumbs, and they know it is crumbs,” said Washington at the L.A. hearing.)
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Waters was not moved. “And while we take the opportunity to say to Comcast, we appreciate the donations,” she said at the field hearing, “that has nothing to do with the competition or ownership that we're talking about today. So they should continue to give
the 50 cents to the Boy Scouts. But we're talking about competition or ownership. So if there's anybody here today who wants to talk about how much money you have given to the NAACP, the Urban League, to Al Sharpton, to anybody else, this is not the place to do it.”
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The hearing was so striking that NBC's
30
Rock
commented on it a few months later, with Queen Latifah playing a fictional congresswoman who chastises NBC for its lack of diversity.
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Waters seemed to think the merger could be blocked: “We have worked long enough at this, we have enough self-confidence to look Comcast in the eye, NBC in the eye and say, not this time, not this time.”
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Waters also said that Comcast had contacted her to ask how the company could satisfy her demands; the
Los Angeles Times
suggested that she was hinting that she had been offered a bribe. And she intimated that people were afraid to testify: “As some will note, there are a few people who are missing from the panel who were previously scheduled to attend. It is somewhat troublesome that many independent and minority programmers, producers, writers and directors have been afraid to voice their concerns for fear of blacklisting or other forms of retaliation within their industries.”
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Comcast was briefly rattled. Representatives of the company swiftly called legislative offices to take the temperature of the leadership. Would these issues be a problem?

David Cohen had apparently learned from experience that the way to work with interest groups was to continue making promises. To cool the criticism following the Los Angeles field hearing, Comcast prepared for the next hearing—to be held in July 2010 in Chicago under the leadership of Rep. Bobby Rush of Illinois—by making more public-interest commitments. It would add two new independent cable networks to its lineup for three years, with substantial minority ownership for at least one of them each year.
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At the Chicago hearing, Jesse Jackson, president of the Rainbow Push Coalition, called for Comcast to commit to making at least 10 percent of its basic tier consist of minority-owned networks and to set “aggressive benchmarks” to get more minorities both in front of the camera and running budgets and shows.
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Okay, Comcast said—how about four cable networks whose majority owners are African American? It would
create “diversity advisory councils” that would meet with Comcast-NBCU executives.
Broadcasting & Cable
reported that the company had made unspecified pledges about employment, programming, procurement, governance, and corporate giving to a host of Latino organizations. Comcast pledged to add a Hispanic member to its board; expand training, internship, and scholarship programs for minority students; and extend carriage of current African American programming “in key market systems” within six months of the deal's close. Most important, it would pay $20 million into a new venture fund for expanding opportunities for minority entrepreneurs.
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Comcast had turned a bug into a feature while diverting attention from the central issues of market domination: it had managed to make the public's review of the merger focus on diversity instead of market power. The Hispanic groups were on board. Bobby Rush, well known for receiving contributions from the telecommunications industry, announced that he was for it, noting his enthusiasm about the deal's prospects for minority media owners and entrepreneurs. Will Griffin of Hip Hop on Demand asserted that Comcast had the best “infrastructure of inclusion” to build upon in the media industry, and that African American consumers and policy makers had more potential leverage with Comcast than any other media company.
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Some observers noticed Comcast had not promised to provide diverse content; when Rep. Rick Boucher (D-Va.) asked about specifics guaranteeing such content in primetime slots, Comcast's Joseph Waz could only say that he was “hopeful,” and NBC Universal's Paula Madison pointed to a “positive trend” in diverse content.
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Waters was having none of it; she noted that Comcast's commitments to diversity were only being made—and very quickly—because she had raised the issue. In her view, Comcast was making concessions only to obtain approval for the merger.
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But none of this mattered. The two-hour hearing was really an occasion to present the press release from Comcast: $20 million was coming, and the groups had signed off. Waters continued to press against the deal from time to time, saying in October 2010 that the proposed $20 million capital fund for minority entrepreneurs was “a marginal amount considering the scale of modern media ownership and associated operational accounts.”
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But in the fall of 2010, she had her own ethics problems to deal with: a House investigation began into whether Waters and Mikael Moore, her chief of staff, had acted inappropriately when they attempted to assist a minority-owned bank, OneUnited, during the 2008 financial crisis. The investigation was postponed in November 2010 and was revived in early 2012, but it appears to be moving slowly in the face of recusals by Ethics Committee members.
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But in the months after the $20 million went on the table, together with Comcast's other commitments, minority opposition to the deal—the only thing that worried Comcast during the yearlong review of the merger—melted away.
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David Cohen and Comcast had made friends and influenced people.

Comcast was nothing if not flexible when it came to small, nonstructural favors. At the House Judiciary Committee hearing, Jean Prewitt, president of the Independent Film & Television Alliance (IFTA), testified that “what is good for Comcast and NBC is not good for the American public.” For Prewitt, the merger was about “the very future of creative life, cultural expression and the free exchange of ideas.” The merger “places at risk the opportunities for diverse, original and independent programming to reach the public through traditional media and new platforms.” The government should not approve the merger, she argued, without strong commitments that independent filmmakers would be able to distribute their works through the new network.
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Comcast listened. About a month later, NBC Universal announced that it would increase support for independent programming under an agreement made by NBC Universal, Comcast, and Prewitt's IFTA. The deal called for NBC to spend one million dollars annually and NBC Universal's cable networks to spend another half million for four years after the merger closed. The companies also said they would find ways to smooth licensing of independent programming for new-media distribution. Jean Prewitt was happy: the agreement, she said, “has the potential to create business opportunities for independent producers that have long wanted to produce for television in the United States again.”
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No more opposition from IFTA.

Another group that could have caused problems for Comcast was the 210 NBC network affiliates, the stations not owned by NBC that carried its programming. The affiliates worried that the Comcast-NBCU merger would cost them advertising revenue since direct-to-cable distribution of high-value NBC programming—sports coverage, for example, which made the affiliates millions in ad revenues—would mean that cable customers would get Comcast's best shows and the local affiliates would not get a cut. (Networks used to pay their affiliates to air network shows, but these payments have gotten smaller over time; now the affiliates are more likely to broadcast shows for free and make their money through commercials. If affiliates are not allowed to sell commercial slots by the network owner, their margins will dwindle and their existence will be threatened.) Affiliates also wanted to ensure they could continue to charge fees for the local programming—mostly news—they allowed the cable networks to redistribute.
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