The marriage of Comcast and NBC is bad news for consumers. But Washington and Wall Street have already bought into the idea that it's a done deal. That's why Americans need to speak out now and stop the mega-merger!
Local journalism received a major blow Monday when a U.S. court allowed an old media ownership rule to go into effect, permitting businesses to own more media outlets in one market – and essentially, more runaway media consolidation in our communities.
The U.S. Court of Appeals for the Third Circuit lifted a “stay” on the application of a rule adopted by former FCC Chairman Kevin Martin in 2007. A “stay” is a tool that a court uses to maintain the status quo when the legality of a new rule is called into question.Martin’s rule eliminated the ban on the common ownership of a local newspaper and broadcast television station in the same market, and replaced it with a more lenient rule that allows cross-ownership of newspaper and broadcast stations in some markets under certain conditions.
This is bad for two reasons: First, it allows more consolidation at the local level, and evidence suggests that merging newspaper and broadcast newsrooms hurts jobs and journalism. Second, although the Martin rule is not as bad as one that his predecessor Michael Powell tried to shove through (despite protests from Congress and the public), it does contain significant loopholes that companies can exploit and manipulate to serve their own ends to the detriment of local communities.
There are, however, a few silver linings. The decision is only an interim one. The court must still hear the case before it issues a final decision about whether this relaxed rule actually serves the public interest goals of competition, diversity and localism. The court could end up throwing out the rule or directing the FCC to improve it.
More importantly, the FCC still has the ability and opportunity to rectify its own mistake of adopting the flawed rule in the first place. As required by law, the FCC has opened its 2010 review of the media ownership rules and will soon be asking for comments from the public. With a new administration and a fresh start, the FCC can fix this. But they are going to need to hear from concerned citizens like you. Stay tuned for opportunities to tell the FCC what you want.
At last month’s House hearing on the proposed Comcast-NBC takeover, execs from both companies shamefully acknowledged their diversity problems. Comcast CEO Brian Roberts sheepishly divulged that his company’s board of directors includes only one woman and one person of color, and NBC’s Jeff Zucker confessed that the network has no Black programming. Watch the video.
Seeing Roberts and Zucker sweat under heavy fire from Congress got us wondering: What else should we be asking about these companies’ woeful commitment to diversity?
The merger would likely exacerbate existing structural flaws in the media system; consolidation has historically been bad news for media ownership diversity. Free Press has done studies showing that as media markets consolidate, the likelihood of media ownership by a woman or person of color decreases.
Media mergers have also proven bad for local and diverse programming. In fact, when NBC bought Telemundo in 2001, the network pledged more local news. But a few years after the merger was approved, NBC created cheap regional newscasts that phoned-in canned coverage, with an insert or two of actual local news. Nine years later, we should ask, will this happen again? How do we ensure that news coverage serving communities of color won’t be further cut? How can we ensure that it improves?
One thing we cannot do is accept these companies’ promises that they’ll “do better.” That’s just lip service to win merger approval. They’ll re-neg as soon as the ink dries on the deal. Rather, we need to begin asking for remedies that will change the structural status quo in ways that benefit people of color and women as entrepreneurs, owners, media professionals, and audiences and consumers. In other words, getting NBC to feature more people or color as guests on its news programs is a step in the right direction, but it is not as effective as getting the company to commit to providing more hours of local Spanish language news, or requiring Comcast to carry an independent cable channel that’s owned by a person of color.
But we’ll never get to those changes if we don’t start asking more aggressive questions. Here’s a start:
Why are Comcast’s commitments regarding Telemundo so pathetic? As part of its voluntary merger concessions, the company promised to add Telemundo programming to Comcast’s on-demand library — but that merely involved moving Telemundo re-runs to a cable platform. That’s a way to generate new (and expensive) cable subscriptions, but it does nothing to enhance broadcast localism or program diversity for the underserved Spanish language market.
Comcast also promised to create a new channel that will air Telemundo’s “library of programming. “Library” is industry code for – yet again — re-runs. Comcast has essentially promised to create a Telenovela channel rather than invest in new programming or more local news. Why won’t Comcast invest in localism for Spanish language stations?
And even while Roberts and Zucker sputtered on C-Span that they’re trying to improve diversity on multiple fronts, I haven’t seen any move to make this a true priority. For instance, Comcast has committed to adding independent channels to its post-merger lineup, but why hasn’t it committed to making sure any of the channels are owned by women or people of color?
When put under the magnifying glass, Roberts and Zucker appeared to be embarrassed about their companies’ diversity track records, but was that enough to motivate a change? Probably not. If we want a system that gives us local news, diverse programming for diverse audiences and minority media ownership, we have to change media ownership in this country – and it can begin with refusing to let these two companies merge.
American broadcasters, magazines, newspapers and other publishers take in more than four billion dollars a year in drug advertising. The drug money is a rare bright spot in an otherwise dismal downward revenue spiral for media of all types. Last year was a horrible year for advertising spending in this country, which fell 12.3 percent. Spending in seven of the top ten leading ad categories fell compared with 2008. The only exceptions were in the industry categories of telecommunications, food and candy, and pharmaceuticals, which showed the largest increase of all.
Wonder why? Perhaps it’s because the US is one of only two countries in the world — along with New Zealand — that permits direct-to-consumer (DTC) advertising of prescription drugs. Yes, your country is one of only two outliers when it comes to allowing those incredibly annoying and ubiquitous “ask-your-doctor” spots. But if you were hoping a modicum of media reform, aimed at reducing health care costs and delivering better services, might be packaged among all the other goodies and giveaways in the Obama Administration’s forthcoming health care reform bill, you can forget it. Lobbyists long ago succeeded in turning back all efforts to end the special interest business-tax deductions that Big Pharma drug makers can take for advertising.
In an early round of reform negotiations, the drug industry actively considered giving up the advertising deductibility as part of the $80 billion dollar deal they made with the Obama crowd to reduce pharmaceutical spending over ten years. But media lobbyists quickly swooped in and killed the idea, turning back nascent efforts in both the House and the Senate. “Advertising deductibility safe!” American Advertising Federation executive Clark Rector wrote in a press release late last year, when the deal went down. Ending the tax break for drug spots “would be a disastrous choice, both economically and politically.”
Supporters like Rector claim the commercials not only educate consumers but also save lives. But critics contend they simply drive up health care costs by encouraging you to take expensive and sometimes less effective drugs — often for newly invented diseases!
Prior to 1998, the Food and Drug Administration (FDA) prevented pharmaceutical companies from shopping prescription drugs to the public. A 2006 Government Accountability Office investigation found some of the newly permitted marketing efforts “false and misleading” and faulted the FDA—which is responsible for oversight—for failing to maintain standards of accuracy and to protect the public. Some of the products can cause liver or kidney damage, high blood pressure or other adverse effects that would have to be countered with still more drugs—each with its own side effects and risky interactions.
But as In These Times reported, “One undeniable side effect of DTCs is increased sales and profits for drug manufacturers.” Every dollar the industry spends on DTC advertising yields an additional four dollars in drug sales, according to the Kaiser Family Foundation – billions of dollars in total. A majority of doctors report that DTC ads caused patients to “confuse relative risks and benefits” or to believe the drugs “worked better than they do,” according to the FDA. Almost three out of four said patients were spurred by the ads to ask for unnecessary prescriptions and to expect a prescription for every condition. Nonetheless, despite their ambivalence about efficacy, safety and appropriateness, doctors turned down requests for a brand-name prescription only 2 percent of the time, the FDA found.
Spending on prescription drugs is America’s most rapidly increasing healthcare cost. One would think that a four billon dollar giveaway to Big Media and Big Pharma, which drives up health care costs that are already spiraling out of control, would be part of ‘health care reform’ aimed in part at cutting costs. Think again – when it comes to lobbies and politicians, apparently no price is too high to preserve their privilege and power…
This post was orginally published on Rory O’Connor’s blog.
As more and more content has moved online, and the sources for news and information expand and multiply, many have wondered if it matters who owns our media anymore. Pew’s 2010 report is a startling reminder of just how much sway Big Media has over just about everything we watch, read and hear – even in the digital age.
The Pew report found that “80% of the traffic to news and information sites is concentrated at the top 7% of sites,” and that “the vast majority of the top news sites (67%), moreover, are still tied to legacy media.” Thus, the same Big Media companies that dominate offline, dominate online.
In fact, many of the sites that are not owned by Big Media are simply aggregating content from Big Media and repackaging it. Pew notes that “13% of these news sites are aggregators, whose content is derived from legacy media. Only 14% of these sites are online-only operations that produce mostly original reportorial content rather than commentary.”
Media ownership clearly still matters. Even in a world of a million choices, the majority of people still rely on a relatively small universe of news producers. Allowing even more consolidation in our media – either horizontal (think Clear Channel) or vertical (think Comcast/NBC) will mean fewer choices on and offline.
The Pew report points out that media ownership is not just important in relation to what makes the news. Our consolidated media ownership model is largely to blame for the crisis in journalism that has seen so many newsrooms close and so many journalists left jobless.
“For companies that had borrowed heavily in the middle of the decade to expand by acquisition, managing debt was a brutal problem. Best case, they needed to plow back most of what the newspapers earned in operating profit to pay debt service and debt reduction (the case at McClatchy). Many needed to refinance debt coming due at a much higher rate, thus increasing interest expense (the New York Times Company). For others the debt was overwhelming and filing for bankruptcy protection was the only option (Tribune Company, MediaNews).”
We need new models for news, but even more important, we need new media ownership policies that can create space for these new models to emerge. The Pew report makes clear that we can’t create a new media system from the edges alone. We need to create fundamental, systemic change, and need to start by changing the bad policies that created this system in the first place.
This week we asked our members to contact members of the Senate Commerce Committee before Thursday’s hearing on Comcast’s proposed takeover of NBC Universal. In turn, hundreds of people called their senators and made the case for why the Comcast deal would be bad for local consumers and citizens.
Judging by Thursday’s hearing, the Senate got the message. Senators on both sides of the aisle voiced concerns about this mega-merger.
Early in the day, Sen. Maria Cantwell took a strong stand against the takeover. “At this point, I can’t support the merger,” Cantwell said. Quoting local organizations, citizens and newspapers — all of whom had come out against the merger — Sen. Cantwell pointed out, “obviously we like media diversity in the Northwest.” She then reminded the audience that the last time the FCC came to Seattle, more than a thousand people turned out (with less than a week’s notice) to argue against further media consolidation.
When it was Sen. Claire McCaskill’s turn at the mic, she warned, “This is pointed, but that’s kinda my job here.” She then went on to call out Comcast on its hypocrisy and broken promises. “If you are relying on the program access rules to reassure people about this deal – isn’t it true you are in court challenging those very program access rules as we speak?” Comcast CEO Brian Roberts danced around the issue, without giving much of an answer.
Sen. Amy Klobuchar is the only Senator on both the Judiciary and Commerce committees, so this was her second time in the ring with Comcast CEO Brian Roberts (the Judiciary Committee held a hearing last month). Her focus was on how this deal would impact consumers. “What assurances can you give that this merger will not result in higher prices for consumers?” she asked. She also pointed out the real threats the merger would pose for competition: “There are concerns over the leverage you would have over both your video distribution competitors, your program distribution competitors” Without clear protections, she warned, Comcast could have an unfair advantage over competitors.
Tired of seeing so many media mergers pass through Washington with little or no scrutiny, Sen. Olympia Snowe cut right to the chase, “Obviously there has been a perception in the past that some of these mergers have been rubber stamped especially amongst media related mergers.” The results, she argued, have been troubling. “The number of independent radio produces has plunges by 39 % in last 11 year years. Between 1995 and 2003 owners of the top TV stations have increased their ownership of stations from 144 to 299.” In response, Christine Varney, the Department of Justice staffer who is leading the Comcast investigation, assured Sen. Snowe, “There is no rubber stamp at the Department of Justice.”
Sen. Mark Begich’s line of questioning focused more on getting some facts on the table, and those facts were startling. He asked Comcast’s Roberts to outline the total combined revenue of NBC and Comcast ($50 billion) and the total number of cable subscribers Comcast has (24 million). Begich also asked Roberts to guess how much they are planning to make on this deal in the long term. Roberts responded that they are expecting a “double digit” rate of return on their investment in NBC.
It was these sorts of facts that made Sen. Byron Dorgan concerned that this deal was just another case of Big Media getting even bigger. Dorgan, who has been a long-time advocate for strong media ownership laws to limit media consolidation, promised that “If [the merger] is approved it would have be approved with conditions.”
We have all heard the old saying, “If it bleeds, it leads,” and most of us have seen the results of this flawed approach on our evening TV news. However, sometimes it’s what we don’t see that’s most worrying. If stories of crime and car accidents make headlines, what stories are left untold?
A new study from the Norman Lear Center at the USC Annenberg School for Communication & Journalism tries to capture what is lost when our news is full of crime, weather, fluff and sports. For example, in L.A., crime stories led in one out of every three stories, but reporting about L.A.’s budget crisis “topped local news only one time out of 100.” The study also explored how L.A.’s TV stations compared to the L.A. Times coverage of local city government.
In the video below, Marty Kaplan, Director of the Normal Lear Center, discusses some of the report’s findings.
Comcast and NBC Universal executives were back in Congress last week to answer more questions about the proposed mega-merger of the two companies. Comcast CEO Brian Roberts and NBC’s Jeff Zucker tried to paint a rosy picture for the House Judiciary Committee about how the deal will be great for the industry, and shrugged off questions about future layoffs.
But Larry Cohen, President of the Communications Workers of America, wasn’t impressed. Neither was the President of the Independent Film & Television Alliance, Jean Prewitt.
The CWA, which represents network and content providers, has members who work for Comcast and NBC Universal. Cohen blasted Comcast for their strong anti-union tactics and trail of broken employee promises. He warned that the merger would “aggravate — not encourage — current anti-competitive behavior in the current television industry.”
Prewitt described to the committee how vertical integration has forced independent producers out of the TV industry and created the dearth of diverse and socially relevant programming that exists today. Five major conglomerates that now own the major broadcast and cable networks produce over 80 percent of all entertainment programming on primetime and on the three major children’s networks. Prewitt said that the percentage of independently produced series on the networks has declined from 50 percent in 1989 to 5 percent in 2008. And she expects those numbers to get worse with the Comcast-NBC deal.
Cohen and Prewitt urged lawmakers to create strong conditions for the merger that will protect consumers, workers, unions and independent content creators.
You can listen to Larry Cohen’s opening statement (audio 4:51) here. Jean Prewitt’s statement (audio 4:54) is here.
When we talk about the possible merger of Comcast and NBC-Universal, we are talking about a deal that will reshape our media system. As we consider the threats and opportunities this merger presents, we should ask ourselves what we want our media to look like in five years, in ten years, and even further into the future. If we envision a democratic, diverse media system, then this merger should raise some red flags.
Both Comcast CEO Brian Roberts and NBC CEO Jeff Zucker claimed in their opening remarks that they had made diversity a priority in their companies. But when pushed by representatives at the hearing, this commitment to diversity began to look as hollow and empty as all their other promises. Zucker claimed that NBC can’t find any good programming that includes African American themes and issues. Brian Roberts had no excuses for why his board includes just one woman and one person of color.
Watch:
Rep. Maxine Waters (D.-CA) summed it up when she said, “You’ve got a diversity problem, you’ve got a labor problem and you’ve got an ownership problem… So I don’t know why I should be supportive of your merger.”
But then, this is not a new issue for Comcast. In his book Comcasted, Joseph Distefano from the Philadelphia Inquirer, chronicles how Comcast built its media empire:
If we’re disturbed by how our media looks now, we should be even more worried about what will happen when these two companies team up. If we let this merger go through, this is what the future of our media system looks like. I personally don’t like what I see.
Monday, March 1st, 2010 by Felix Sanchez and Joseph Torres
Latino leaders are gathering in Philadelphia on Monday to meet with the top brass at Comcast and NBC Universal.
They’re being sold on why the merger of the biggest cable TV and residential broadband company in our country with one of the largest television networks and programmers allegedly would be good for the Latino community and the public interest.
The merger would give Comcast unprecedented control over the commanding heights of our nation’s media system. If allowed to go forward, Comcast would own the broadcast networks of NBC and Telemundo, part of at least 30 cable networks, eight regional sports networks, more than two dozen local NBC and Telemundo TV stations and a movie studio.
If this takeover goes through, the control that Comcast would exert over our TV and Internet experiences will be considerable. We can expect cable rates — which already have increased three times the rate of inflation since 1996 — to spike even higher. We can be sure it will be even harder for independent and diverse programming to find a spot in the cable lineup. And we know mergers almost always mean job cuts.
And let’s not kid ourselves. If this merger is rubber-stamped, it won’t be long before we see another wave of mergers among companies like Verizon, AT&T, CBS and Disney. That’s what always happens, even though these deals historically have been disastrous for consumers – and especially for people of color.
Historically, that’s why leading Latino organizations have been very skeptical of runaway media consolidation. When NBC announced its plan to buy Telemundo in 2001, many of our nation’s leading Latino groups opposed the transaction. They urged the FCC to reject the deal, claiming it wouldn’t serve the public interest or promote diversity.
But now that Comcast wants to buy NBC — which includes the Telemundo network — it will make this deal one of the most consequential media mergers in our nation’s history. But Latino civil rights groups have been strangely silent.
A decade ago, NBC made all sorts of promises about how the Telemundo deal would benefit local communities – and then it reneged on them. For starters, it cut the local Telemundo newscast in 2006 in major cities like Dallas, Houston, San Jose and San Antonio after promising to compete against Univision.
It also stated that the deal would “benefit NBC’s English-only audience by creating new possibilities for the cross-fertilization of ideas and viewpoints.” But those benefits never materialized.
Comcast, too, has a long record of making promises it doesn’t keep. For example, after promising to respect collective bargaining deals, it has turned around and busted the unions of companies it has taken over. That’s cold comfort for the union workers at NBC and Telemundo.
And we can’t overlook the programming. During a congressional hearing on Feb. 24, Rep. Luis Gutierrez (D-Ill.) lambasted NBC for the misogynistic and homophobic programming that airs on Telemundo, and he criticized Comcast for not having a single Latino board member.
In that same hearing, Rep. Maxine Waters (D-Calif.) ripped Comcast for only having one African-American on its board, and took NBC to task for having only one African American and no Latinos among its top executives. Maybe that’s why there’s no black- or Latino-oriented programming on the network.
Comcast wants Congress to believe its bad actions are all in the past. But even in sworn testimony to Congress, the company is talking out of both sides of its mouth.
Comcast Chairman and CEO Brian Roberts promised Congress his company would abide by a series of self-imposed “public interest” concessions. But the list of promises they’ve offered is just a bunch of things they’re already doing, things they were already planning to do, or things they’re required to do by law.
It should be noted that Comcast has given generously to support the work of many leading Latino groups. But this does not justify or rectify the damage this merger would cause for consumers, for the public and for our community.
Comcast wants help from Latino groups to push through this mega-deal. But before offering their stamp of approval, we hope Latino leaders will ask some important questions: Will the merger increase cable prices? Will Comcast try to reject labor agreements? Will the merger increase the representation of Latinos on network and cable programming? Will it result in greater Latino ownership of broadcast stations and cable networks? Or will it increase the barriers to ownership?
Will Comcast make sure the open Internet stays that way so that small business can prosper and independent voices can be heard, even though it is in court trying to strip the FCC of its authority to protect an open Internet? Will we be better able to speak for ourselves or will this deal just create an even bigger gatekeeper?
Comcast and NBC Universal will undoubtedly make all sorts of promises about how Latinos would benefit from this massive merger. But they don’t have a believable answer for how this merger will actually benefit our community.
That’s because it won’t.
Felix Sanchez is the chairman of the National Hispanic Foundation for the Arts and Chief Executive Officer of TerraCom, a government and public relations firm. Sanchez does not represent nor is receiving direct or indirect compensation to take a position on the merger.
Joseph Torres is the government relations manger for Free Press and former deputy director of the National Association of Hispanic Journalists. Free Press is a nonpartisan, nonprofit group that does not accept money from businesses, the government or political parties.
