[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]
COMCAST AND NBC UNIVERSAL: WHO BENEFITS?
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON COMMUNICATIONS, TECHNOLOGY, AND THE INTERNET
OF THE
COMMITTEE ON ENERGY AND COMMERCE
HOUSE OF REPRESENTATIVES
ONE HUNDRED ELEVENTH CONGRESS
SECOND SESSION
__________
JULY 8, 2010
__________
Serial No. 111-142
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Printed for the use of the Committee on Energy and Commerce
energycommerce.house.gov
_____
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COMMITTEE ON ENERGY AND COMMERCE
HENRY A. WAXMAN, California
Chairman
JOHN D. DINGELL, Michigan JOE BARTON, Texas
Chairman Emeritus Ranking Member
EDWARD J. MARKEY, Massachusetts RALPH M. HALL, Texas
RICK BOUCHER, Virginia FRED UPTON, Michigan
FRANK PALLONE, Jr., New Jersey CLIFF STEARNS, Florida
BART GORDON, Tennessee NATHAN DEAL, Georgia
BOBBY L. RUSH, Illinois ED WHITFIELD, Kentucky
ANNA G. ESHOO, California JOHN SHIMKUS, Illinois
BART STUPAK, Michigan JOHN B. SHADEGG, Arizona
ELIOT L. ENGEL, New York ROY BLUNT, Missouri
GENE GREEN, Texas STEVE BUYER, Indiana
DIANA DeGETTE, Colorado GEORGE RADANOVICH, California
Vice Chairman JOSEPH R. PITTS, Pennsylvania
LOIS CAPPS, California MARY BONO MACK, California
MICHAEL F. DOYLE, Pennsylvania GREG WALDEN, Oregon
JANE HARMAN, California LEE TERRY, Nebraska
TOM ALLEN, Maine MIKE ROGERS, Michigan
JANICE D. SCHAKOWSKY, Illinois SUE WILKINS MYRICK, North Carolina
HILDA L. SOLIS, California JOHN SULLIVAN, Oklahoma
CHARLES A. GONZALEZ, Texas TIM MURPHY, Pennsylvania
JAY INSLEE, Washington MICHAEL C. BURGESS, Texas
TAMMY BALDWIN, Wisconsin MARSHA BLACKBURN, Tennessee
MIKE ROSS, Arkansas PHIL GINGREY, Georgia
ANTHONY D. WEINER, New York STEVE SCALISE, Louisiana
JIM MATHESON, Utah
G.K. BUTTERFIELD, North Carolina
CHARLIE MELANCON, Louisiana
JOHN BARROW, Georgia
BARON P. HILL, Indiana
DORIS O. MATSUI, California
DONNA M. CHRISTENSEN, Virgin
Islands
KATHY CASTOR, Florida
JOHN P. SARBANES, Maryland
CHRISTOPHER S. MURPHY, Connecticut
ZACHARY T. SPACE, Ohio
JERRY McNERNEY, California
BETTY SUTTON, Ohio
BRUCE L. BRALEY, Iowa
PETER WELCH, Vermont
Subcommittee on Communications, Technology, and the Internet
RICK BOUCHER, Virginia
Chairman
EDWARD J. MARKEY, Massachusetts FRED UPTON, Michigan
BART GORDON, Tennessee Ranking Member
BOBBY L. RUSH, Illinois CLIFF STEARNS, Florida
ANNA G. ESHOO, California NATHAN DEAL, Georgia
BART STUPAK, Michigan JOHN SHIMKUS, Illinois
DIANA DeGETTE, Colorado GEORGE RADANOVICH, California
MICHAEL F. DOYLE, Pennsylvania MARY BONO MACK, California
JAY INSLEE, Washington GREG WALDEN, Oregon
ANTHONY D. WEINER, New York LEE TERRY, Nebraska
G.K. BUTTERFIELD, North Carolina MIKE FERGUSON, New Jersey
CHARLIE MELANCON, Louisiana
BARON P. HILL, Indiana
DORIS O. MATSUI, California
DONNA M. CHRISTENSEN, Virgin
Islands
KATHY CASTOR, Florida
CHRISTOPHER S. MURPHY, Connecticut
ZACHARY T. SPACE, Ohio
JERRY McNERNEY, California
PETER WELCH, Vermont
JOHN D. DINGELL, Michigan (ex
officio)
C O N T E N T S
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Page
Hon. Rick Boucher, a Representative in Congress from the
Commonwealth of Virginia, opening statement.................... 1
Prepared statement........................................... 3
Hon. Steve Buyer, a Representative in Congress from the State of
Indiana, opening statement..................................... 5
Hon. Bobby L. Rush, a Representative in Congress from the State
of Illinois, opening statement................................. 6
Prepared statement........................................... 9
Hon. Anna G. Eshoo, a Representative in Congress from the State
of California, prepared statement.............................. 216
Witnesses
Hon. Maxine Waters, a Representative in Congress from the State
of California.................................................. 12
Prepared statement........................................... 15
Jonathan Jackson, Rainbow PUSH Coalition......................... 34
Prepared statement........................................... 36
Will Griffin, President and Chief Executive Officer, Hip Hop
OnDemand....................................................... 40
Prepared statement........................................... 44
Samuel R. DeSimone, General Counsel, Earthlink................... 50
Prepared statement........................................... 52
Paula Madison, Executive Vice President, Chief Diversity Officer,
NBC Universal.................................................. 62
Prepared statement........................................... 64
Joseph W. Waz, Jr., Senior Vice President, External Affairs and
Public Policy Counsel, Comcast Corporation..................... 74
Prepared statement........................................... 77
Submitted Material
Letter of July 6, 2010, from CoLours TV to Mr. Boucher........... 217
Comcast and NBCU's Summary of Diversity Commitments.............. 218
FIELD HEARING ON COMCAST AND NBC UNIVERSAL: WHO BENEFITS?
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THURSDAY, JULY 8, 2010
House of Representatives,
Subcommittee on Communications, Technology,
and the Internet,
Committee on Energy and Commerce,
Washington, DC.
The subcommittee met, pursuant to call, at 9:00 a.m., in
Room 2525, Dirksen Federal Building and Courthouse, 219 South
Dearborn Street, Chicago, Illinois, Hon. Rick Boucher [chairman
of the subcommittee] presiding.
Members present: Representatives Boucher, Rush and Buyer.
Also present: Representative Waters.
OPENING STATEMENT OF HON. RICK BOUCHER, A REPRESENTATIVE IN
CONGRESS FROM THE COMMONWEALTH OF VIRGINIA
Mr. Boucher. Good morning to everyone. The Subcommittee on
Communications, Technology and the Internet will come to order.
Today, at the suggestion of our subcommittee colleague, Mr.
Rush, we are in Chicago to conduct the subcommittee's second
hearing on the proposed combination of two of our nation's
largest media and entertainment companies Comcast and NBC
Universal.
I appreciate the outstanding contributions that Congressman
Rush makes to the work of our committee. He is Chairman of our
Subcommittee on Commerce and Consumer Protection, and in that
role I've had an opportunity to work closely with him as we
have together worked to fashion a set of privacy guarantees for
internet users. And, of course, he is a member of this
Subcommittee and makes a truly valuable contribution to our
work. And I want to thank Congressman Rush and his staff for
their excellent help in making the arrangements for today's
hearing. It's truly been a pleasure for me to have the
opportunity to be here. And I know that our focus today on the
Comcast-NBC Universal Merger will be aided very much by the
testimony that we receive from our witnesses this morning.
Comcast is the nation's largest multi-channel video program
distributor, the largest retail broadband provider, and the
third largest home telephone service provider, as well as the
owner of numerous cable channels and regional sports networks.
As measured by annual revenues, NBC Universal is the
nation's fourth largest media and entertainment company. It
owns the NBC and Telemundo television networks, television
broadcast stations in some of the largest markets in the United
States, cable channels, a movie studio, as well as an interest
in the online video programming provider, Hulu.com.
The key question for this Subcommittee, as well as for the
FCC, and the U.S. Department of Justice who are reviewing this
proposed combination is how the proposed combination will
affect consumers. And, of course, both of these companies
deliver a range of services, and the question is with regard to
those services how will consumers be affected.
Some combinations benefit consumers by enabling a more
efficient delivery of new and better products and services, but
there also is the potential for consumer harm due to a
limitation of choices that are available to consumers, or by
limiting competition in a way that makes services more
expensive than they would be in an open market.
In our previous hearing, we examined the potential harms
that could arise if the merged company restricts the internet
delivery of NBC Universal-owned programs that are offered off-
line to the public for free today, to web portals that are
available only to the Comcast broadband subscribers. We sought
and we obtained commitments and assurances from the companies
that access to those programs would not be so restricted.
Today, we will focus on other potential effects of the
merger, including how it will affect the company's practices
with respect to diversity and employment, procurement, media
programming and philanthropy.
I look forward to the testimony of our witnesses on these
and other matters. And I want to thank each of our witnesses
for taking time to join us here this morning. A number of them
have traveled to Chicago for purposes of sharing their views
with us, and I very much appreciate your doing so, and being
here today.
I'm going to recognize both members of the panel for their
opening statements, and then we will turn to the testimony of
our witnesses. And I'll begin by recognizing the Republican
member of our Subcommittee on Communications, Technology, and
the Internet, the gentleman from Indiana, Mr. Buyer.
[The prepared statement of Chairman Boucher follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
OPENING STATEMENT OF HON. STEVE BUYER, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF INDIANA
Mr. Buyer. Thank you very much, Mr. Boucher.
Welcome to Chicago, welcome to the Midwest. And, Bobby
Rush, thank you for having us come here.
I brought some Indiana folks with me last night, and I
thought I would take in a White Sox game, and it rained. By my
calculation, that was probably about an $80 beer, so we sipped
it slowly and enjoyed it. And probably the best judgment of the
night was during the clearing, we made a run for the taxi.
Mr. Rush. Mr. Chairman, if I may add, we do have rain
checks in Chicago.
Mr. Buyer. Oh, OK. All right. Rain check.
I would also like to welcome Maxine Waters for giving up
her time in sunny California to come to the Midwest. Thank you,
also, for being here.
When this joint venture between Comcast and NBC Universal
was first proposed, I was most interested in the reaction, or,
I should say, the lack of reaction not only by policy makers,
but also stakeholders and others within industry.
My initial reaction, personally, was about the--in our
culture we have something that we don't think about very often,
but its silence can be interpreted as acquiescence or an
admission. And it's part of our culture. So, when this merger
first came out, there was silence. And I was--my curiosity was
I did not believe that the silence would be interpreted as an
acquiescence to the merger. And my commitment has been to keep
an open mind regarding this merger, and to allow the parties to
be able to come together and address concerns. And I thank my
friend, Mr. Boucher, for doing this. I brought this to him. He
also is feeling the same way I was, and he said yes, we're
going to have some hearings on this, and we want to go into it,
we want to dive into this.
Now, the Chairman in his comments about concerns with
regard to consumers, and he's correct. And the Department of
Justice will do their review on--because of anti-trust and the
impact on competition, but we also need an over horizon view.
The over horizon view, when you do the long view and you
look at the data points that are out there, you have to be
really careful about trying to define an image based on what we
know today. The reason I say you have to be very careful,
because as policy makers, we've done this before. And we've
tried to define what we thought it looked like at the moment of
calling, and got it wrong. And we're in such a highly dynamic
industry that we have to be really very, very careful.
I decided to do my due diligence, just as, Mr. Chairman,
you are doing yours, so since February, I've met with every
industry representative out there from broadcasters, pay TV
affiliates, non-affiliates, content providers, carriers. I've
done big cable, small cable, satellite. I've met with all the
stakeholders that I possibly could. But my take-away from all
of these meetings is that, it came out of the hearing we had
done in February, that there was a real need to define
Comcast's commitment to the network affiliated model of free
over-the-air broadcasting, especially as it pertains to
localism.
Also, protect the value of the network and preventing a
cycling of key programming, and migration of this key
programming. The other is prevent bypass of the affiliates for
first call rights to competing platforms as it pertains to
Comcast providing network programming. And, fourth, protect the
integrity of the retrans consent process.
And, primarily, my concern there lies with the small cable
companies insuring that they not get lost by big cable in the
retrans consent process leading to less competition and higher
prices for consumers.
I want to--also, as this began to unfold, I also watched
how the non-affiliates began to work out their concerns. Rather
than immediately rush to the FCC, they came together, the non-
affiliates did, and then took their concerns to Comcast, and
they were able to come together in the private marketplace
agreement.
And then not only was that done, but then Comcast-NBC
Universal had come together with their own agreements on many
diversity issues. So, it's pretty good. They recognize that
there's federal oversight, not only by the FCC, by your
Committee, Mr. Chairman, but also by DOJ, so there are a lot of
eyes being placed on this. So, the private sector are
proceeding, and my reading of both of these agreements that
have been done in the private sector, actually, they go beyond
what I was even thinking about and considering. So, I want to
congratulate the parties for leaning forward and doing what I
think is right. So, with that, I yield back.
Mr. Boucher. Thank you very much, Mr. Buyer. Thank you for
taking the time to take part during this hearing this morning.
I, again, want to thank Congressman Rush and his staff for
their excellent assistance in arranging for today's hearing,
and making sure that we could use the ceremonial courtroom here
at the United States Courthouse. And Congressman Rush, I want
to recognize you for your opening statement.
OPENING STATEMENT OF HON. BOBBY L. RUSH, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF ILLINOIS
Mr. Rush. Thank you, Mr. Chairman. And let me begin by
thanking you so much for the outstanding cooperation and
leadership which you have provided to the Subcommittee. And you
have really gone beyond what would be normally expected in
regards to this hearing. You're in the middle of a tough
campaign, and that you would take the time off to leave your
district and come to Chicago to convene this hearing. I'm
certainly grateful to be part of this. And it's a pretty
significant moment in the life of the city of Chicago, here on
the eve of the LeBron era. And I will note that I am an eternal
optimist.
(Laughter.)
But, Mr. Chairman, I want to welcome you again, welcome
your colleagues and welcome Congresswoman Waters, and my
colleague on the Subcommittee, Mr. Buyer from Indiana. I want
to welcome each of you to this hearing, and to the city that I
love so much.
Mr. Chairman, on that day that Comcast and NBC Universal
secure their last approval from federal and state regulators to
combine their highly attractive, and lucrative, distribution
and video programming assets, a very powerful and influential
media and information colossus will be born. When that will
happen, immediate power to determine what our nation watches,
what we read, from where we get our news, and even on which
electronic and communications devices those images and data
will appear.
The $28 billion joint venture between Comcast and NBC
Universal will give Comcast, already the country's largest
cable and home broadband company, total say and control over
the day-to-day operations of the NBC networks; the Telemundo
network, NBC's two dozen national cable network channels,
including MSNBC, Bravo, CNBC, and partial interests in the
Weather Channel, A&E's History and Biography channels, NBC
Network News, ``The Today Show,'' ``NBC Sunday Night
Football,'' ``Meet the Press,'' and distribution rights to a
library of more than 55,000 TV episodes, not to mention the
Universal Pictures movie studio and distribution companies.
Many of the purported benefits of this proposed
combination have been framed in terms of when and where
subscribers will realize benefits. Some of the more widely
touted subscriber benefits put forward by the parties are that
Comcast cable TV subscribers will be able to see movies more
quickly after the first showing in theaters, or that because of
this transaction TV shows will appear faster on subscribers'
cell phones, video-on-demand web sites, and other digital media
platforms and devices.
These ``whens'' and ``wheres'' are very important,
absolutely very important. And I am concerned about these when
and wheres, but I'm also equally concerned, however, about what
cable television, broadcast TV, news, public affairs, religious
and community programs, sporting events and movie content will
not be made available to subscribers of Comcast's competitors,
or to the competitors of Comcast's new affiliates.
And will the same content that is offered to Comcast
broadband subscribers be made available to all broadband users,
regardless of whom they subscribe to for broadband service?
Despite the critical importance of program access and the
equitable carriage of network affiliates on Comcast's cable
systems, the most important issue of access, as far as I am
concerned, the most important issue is minority ownership.
As the largest media and information merger since AOL and
Time Warner which, incidentally, disrupts community practices
in cable and broadcast TV programming in so many markets, the
significance of this transaction cannot be underestimated.
This represents a real opportunity that minority businesses
and investors must not miss. They must be fully engaged. And I
am cognizant of the commitment that Comcast made publically
last month for increasing diversity of ownership, and diversity
in programming. Specifically, Comcast plans on adding these
channels over the next three years. As you see, that half of
these channels are minority owned or run represents an
important and positive step for increased minority ownership. I
am delighted with the developments.
However, Mr. Chairman, I think that minorities can and
will, and must have better seats at the boardroom table, and
not just in the movie theaters and watching television in their
living rooms.
Mr. Chairman, this is an opportunity for us. And I would
say during the course of the last few months, I am pleased and
interested and somewhat delighted by the approach that Comcast
and NBC have made towards satisfying our concerns. I'm still
not satisfied. I'm still not there yet, but I want you to know
that without any changes, we're just going to end up at the
same place. And, Mr. Chairman, with that, I yield back the
balance of my time.
[The prepared statement of Mr. Rush follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Boucher. Thank you very much, Congressman Rush. And
we're pleased to have joining us today a gentle lady from
California, Ms. Waters. She is a senior member of the House
Judiciary Committee, and while she does not serve on the Energy
and Commerce Committee, we're very glad to have her here. She
has strong interest in the subject matter we're examining this
morning. And, in fact, was a leading participant in a hearing
the House Judiciary Committee had on this subject in Los
Angeles earlier this year.
Ms. Waters, we're glad to have you here, and I'm pleased to
recognize you for your statement.
STATEMENT OF HON. MAXINE WATERS, A REPRESENTATIVE IN CONGRESS
FROM THE STATE OF CALIFORNIA
Ms. Waters. Thank you very much, Mr. Chairman. I appreciate
the opportunity that you've afforded me to come here today to
be a part of this hearing. I'm especially appreciative to
Congressman Rush for his assistance in making sure that I could
participate as a panelist here today. And I'd like to thank all
of my colleagues who are here today to participate in what I
think is one of the most important hearings relative to media
consolidation that we will have on this issue.
Mr. Chairman, thank you for organizing this Field Hearing,
and, again, allowing me the opportunity to participate. You're
right, I have been involved with this issue for quite some time
now, and my interest was basically triggered on June 7th, 2010
when the House Committee on the Judiciary held a Field Hearing.
Well, it was prior to that time, but I've been in two hearings
to date on this issue, and I do have some concern. What I'd
like to do is just take a moment and try and explain what those
concerns are, and why I have those concerns.
Over the past couple of months, I've been active in
advocating for a process in the Federal Communications
Commission's review of this merger, the opportunities for
minorities in media have been severely limited as a result of
deregulatory policies, and large media consolidations. This has
concentrated our media industry into the control of a mere
handful of corporations, constraining opportunities for
minority ownership of media licenses.
While I'm not presently, and have not indicated direct
opposition to the Comcast-NBC merger, I do recognize it as a
critical opportunity for both companies to implement a plan of
action to address their shortcomings with respect to minority
inclusion within their programming, management, ownership, and
advertising activities.
Ultimately, these diversity considerations are taken into
account within the FCC's review proceedings. While both the FCC
and DOJ have the statutory authority to review new mergers
under our Federal Anti-Trust Laws, the FCC's process allows for
a more comprehensive public interest analysis, including a
deeply rooted preference for preserving, and enhancing
competition, and generally managing the spectrum in the public
interest, in the public trust.
Therefore, my concerns about this merger are based on the
potential impact on diversity, competition, and whether
consumers will enjoy diverse and alternative sources of news
and entertainment. From what we have gathered about the
companies' organizational structures, both Comcast and NBC have
a lot of work to do.
NBC Universal has 18 corporate executives, while two of the
18 are minorities, including Ms. Paula Madison, who's here
today. Their primary responsibilities do not include managing
networks, and producing content. Despite Ms. Madison's efforts
to work with the key executives to promote diversity throughout
NBC Universal, the company continues to fall short in setting
tangible benchmarks, and achieving results in increasing
minority representation among its high-level management and
executive positions.
NBCU does not have any African American show runners over
its prime time, daytime, or late night programming. This means
African Americans are not in positions where they oversee
budgets, and the hiring of actors, writers, co-producers, and
technical employees. It is important to have diversity in these
management positions, because they create employment
opportunities for other producers, writers, directors, and
actors.
Similarly, NBC's Universal Studios do not employee African
Americans with the authority to decide which film projects are
ultimately given the necessary support to make it to the big
screen, that is green light.
The President and COO of NBC Universal Studios is a white
male. The President and Chairman of Universal Pictures and
Focus Features also white. Of the 21 films NBC Universal
Pictures released in 2009, only two simply had minority leads.
The overwhelming majority of NBC TV content is produced by
white individuals, or white- owned production companies. The
Presidents of all 12 of the NBC cable networks are white.
Ultimately, these individuals are influential in deciding what
show runners are hired to produce the television shows that
will air on these networks.
Thus, it is important to have sufficient minority
representation and programming to ensure diversity in content
the network produces.
Comcast Corporation also has problems with diversity and
inclusion. Only one of Comcast's 13 member Board of Directors
is an African American. Only two of Comcast's 28 corporate
executives are African American. Comcast has 33 division
executives, while three of these executives are minorities,
there are no African American division executives listed on
Comcast's Web site who head Comcast's programming group.
When broken down further by each of Comcast's individual
cable networks, only one has an African American President, and
that is the Style network. There is one Latino executive;
however, he is responsible for advertising and sales, not
programming.
The barriers to ownership for minorities and women have
been studied by various universities and non-profit
organizations. Currently, TV One is the only United States
cable network with significant black ownership. That is Video
One, Alfred Liggins, President and CEO, owns 37 percent of TV
One. While Comcast carries the network on its mostly widely
distributed tier, it is worth noting that Comcast owns 33
states in TV One. In 2007, minorities owned just 3.2 percent of
the United States television stations, despite comprising more
than 34 percent of the population.
In fact, of NBC's more than 200 affiliated television
stations, only one is black- owned. Ironically, while the
National Urban League and its chapters, among the first of our
nation's Civil Rights groups to support the merger, it, too,
released a study in 2005 detailing the broadcast networks'
failure to have diverse guests on their Sunday morning news
shows. The studies included that 60 percent of the Sunday
morning talk shows feature no black guest at all, and that 78
percent of the broadcasts contain no interviews with a black
guest.
Therefore, when we discuss NBCU or Comcast's lack of
diversity, it is not merely isolated, or defined as the absence
of minorities in front of the camera. Credible involvement of
minorities start at the top, and trickles down through every
job or position that is necessary to produce and distribute a
television program, or motion picture.
Therefore, it is imperative that NBC Universal and Comcast
show its commitment to diversity, and negotiate, work with
those groups to come up with a substantive plan that
incorporates minorities in all aspects of its media programming
and distribution activities. This begins with a strategy to
extend opportunities for minorities in media ownership,
management, programming, and advertising.
Thank you, Mr. Chairman. And I yield back the balance of my
time.
[The prepared statement of Ms. Waters follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Boucher. Thank you very much, Ms. Waters. Appreciate
your statement this morning.
We now will recognize our panel of witnesses, and they are
here by invitation. The witnesses are here by invitation only.
Mr. Feldman. Mr. Chairman, I had submitted to your office a
request to speak here.
Mr. Boucher. Sir, you're out of order. We are recognizing
our witnesses at the hearing at this time.
Mr. Feldman. I ask you, please, to reconsider. I have
testimony that I----
Mr. Boucher. Sir, I'm sorry. The witnesses are here by
invitation only. And we will now recognize our panel of
witnesses.
Mr. Jonathan Jackson is the national spokesperson for the
Rainbow PUSH Coalition, and is speaking today on behalf of that
coalition. Mr. Will Griffin is President and Chief Executive
Officer of Hip Hop OnDemand. Mr. Samuel DeSimone is the General
Counsel for EarthLink. Ms. Paula Madison is Executive Vice
President and Chief Diversity Officer of NBC Universal. And
Joseph Waz is Senior Vice President for Comcast Corporation.
We welcome each of you, and without objection, your
prepared written statements will be made a part of the record.
We would welcome your oral summaries. And in the interest of
time, because we only have this room until 11:00 today, we
would ask that you try to keep those oral summaries to
approximately five minutes. That will leave for us ample time
to take questions.
Mr. Jackson, we will be happy to begin with you.
STATEMENT OF JONATHAN JACKSON, RAINBOW PUSH COALITION; WILL
GRIFFIN, PRESIDENT AND CHIEF EXECUTIVE OFFICER, HIP HOP
ONDEMAND; SAMUEL R. DESIMONE, GENERAL COUNSEL, EARTHLINK; PAULA
MADISON, EXECUTIVE VICE PRESIDENT, CHIEF DIVERSITY OFFICER, NBC
UNIVERSAL; JOSEPH W. WAZ, JR., SENIOR VICE PRESIDENT, EXTERNAL
AFFAIRS AND PUBLIC POLICY COUNSEL, COMCAST CORPORATION
STATEMENT OF JONATHAN JACKSON
Mr. Jackson. Thank you, Chairman. My name is Jonathan
Jackson. I'm the spokesperson for the Rainbow PUSH Coalition
here in my father's behalf, Reverend Jesse Jackson.
First I'd like to say good morning, Mr. Rush, Ms. Waters
and other members of the panel. I welcome this opportunity to
speak to you today concerning the proposed merger between
Comcast and NBC Universal.
In the context of economic emancipation, I ask what is
Comcast's return on investment in assisting the economic
empowerment of African American communities, and the
underserved communities?
In other words, why is it good business for Comcast to
address two of the nation's most important challenges; one,
creating jobs, and, two, helping to connect every American,
especially people that are marginalized in our country today,
to vitally needed news, information, and broadband internet
services?
With this proposed merger comes a rare, and perhaps the
last opportunity to address critical issues in the global
communications landscape. Therefore, we take the following
positions as this merger is considered.
An opportunity exists to create a new global media platform
now. The opportunity exists to create a new minority-owned
venture that can be empowered to create sustainable
opportunities now. Diversity should be a top down priority in
every aspect of the merger. The merger should not hinder new
media, but help support it by creating new, more easily
accessible technological platforms.
On to the point of ownership. There are three minority
owners in the Chicago market, controlling a total of three
stations, or less than 5 percent of all of the commercial radio
stations in Chicago; WJOB-AM 1230, is controlled out of Hammon,
Indiana-based Vasquez Development, a Latino-female-owned
company; WLTH-AM 1370, controlled by WLTH Radio, an African-
American-owned company; and WVON-AM 1690, controlled by
Chicago-based African American-owned Midway Broadcasting
Company.
In a city that's over 40 percent African American, there's
a dearth of media ownership happening in Chicago today. What
was old media--what is new media is looking more like more of
the old media. I encourage you to let's create the opportunity
now, that the ship has now left the station, so to speak. And
what we're experiencing now is less diversity than ever before.
I can recall growing up when we saw an African American
leading the news on CNN, we saw them at the White House years
ago, and today it's none. In the City of Chicago, we have two,
five, seven, nine, CLTV, what local networks that say you're
proud to service the African American community.
We know the power of images on television. Until those
persons that have the power assume the responsibility to
project positive images, how can a community develop and
sustain itself?
Some people need to be held accountable today. If we look
at the music industry, we look at the film industry, I see that
there's too much blame fixing on the children, and on the
parents. Those corporate titans that have the power to shape
the images, to shape the culture are not being held responsible
for the music that's being produced, and the music that is
being distributed. Some people would say they're only
fulfilling the current need, that if people didn't like it,
they wouldn't buy it. Well, if people don't have a choice, they
succumb to whatever is left before them.
That is what I would encourage you to do. Let's create
opportunities today. We're going through, if you will, the
third evolution, now into the fourth evolution of wireless
technology. This Committee has missed it all. We have food
banks for over 600,000 people do not have adequate supply of
food in the City of Chicago. That's a major issue. We have
broadband deserts where people cannot register online cannot
take classes online, cannot look up information online. In the
heart of Englewood, where we've seen something very tragic
happen just yesterday of another officer being killed in as few
as two months. So, gentlemen and ladies of the Committee, I ask
you to have that in your consideration. I yield the rest of my
time.
[The prepared statement of Jonathan Jackson follows:]
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Mr. Boucher. Thank you very much, Mr. Jackson.
Mr. Griffin, we'll be happy to hear from you.
STATEMENT OF WILL GRIFFIN
Mr. Griffin. Thank you, Mr. Chairman and members of the
Committee, Congresswoman Waters, nice to see you again.
Congressman Rush. Thank you for the opportunity to appear
before you today to discuss the proposed combination of Comcast
and NBC Universal, and who benefits from it.
By way of background, I have seen the inner workings of
most of the major media companies. While in law school, my
faculty advisor was current Deputy Commerce Secretary, Dennis
Hightower, who was the first African American President of Walt
Disney Television. As the Director of the Harvard Consultation
Project, I was advised by former Motown Chairman, Clarence
Avant, who opened the door of access into the CEOs of the major
record labels which started my career in the media industry.
Subsequently, at McKinsey & Company's entertainment and
media group, I worked on project at Time Warner during its
post-merger integration with Turner, and I remember a
discussion with AOL and Time Warner the same discussion, which
was lack of broadband access, lack of diversity, and it was
going to be the end of life as we knew it for all media
companies, and it didn't work out for AOL for all practical
purposes. I think all those intentions didn't come to pass.
But, subsequently, I joined News Corporate in the Strategy
and Marketing Group, and for the past 10 years I've been an
entrepreneur in African American media producing film with
Reuben Cannon and Bishop TD Jakes, and ultimately running a
film and television production company in partnership with
Russell Simmons and Stan Lathan, where we created and launch
Hip Hop OnDemand on Comcast five years ago.
These experiences have led me to support this joint venture
with Comcast as the controlling partner for two overwhelming
reasons. First, Comcast has the best Infrastructure of
Inclusion to build upon in the media industry. And, two,
African American consumers and policy makers have more
potential leverage over Comcast than any other media company. I
do not come to this conclusion lightly, because there is no
doubt that the history of African Americans and media
consolidation creates a visceral negative reaction to any
merger or consolidation.
When I watch Congresswoman Waters' hearings or Congressman
Rush president over the legislation for Wall Street reform to
insure the Side Streets and main street are protected from the
excesses of Wall Street, I applaud. Likewise, I applauded the
field hearing in June in Los Angeles, and I believe this
hearing is vitally important, because I remember sitting in my
dorm room in 1992 when Bill Cosby expressed his desire to buy
the NBC network, a network that he turned around with African
American programming, and was told it was not for sale. It
begged the existential question, ``Why?''
Many African Americans remember when Fox launched with a
focus on African American programming. They had iconic shows
like Queen Latifah in ``Living Single,'' ``Martin,'' ``Roc'',
``New York Undercover.'' Then through a series of acquisitions,
mergers, stock swaps and expansions into Fox News, the company
has morphed into the monstrosity that we see today. From Queen
Latifah to Glenn Beck. Why?
More recently, when Viacom's UPN and Time Warner's the WB
merged, the first casualties were the African American shows,
``Girlfriends,'' ``Eve,'' ``All of Us,'' ``Everybody Hates
Chris,'' that made up the bulk of UPN's line-up. Why?
Here's my answer; because advertisers have only been
willing to pay for a limited amount of African American
impressions, and will not pay for every African American view
generated. It is why African American icons like Chicago's
legendary Johnson Publishing with Ebony/Jet are in decline, and
it should be the subject of future hearings. We are just a few
blocks from many of the companies that control the main source
of revenue in the media industry, and I think that they should
be held accountable. That's necessary if we are to remove the
primary barrier to growth and sustainability in minority media
companies. Your intervention and oversight of the advertising
industry is sorely needed.
This is true of my own experience with Hip Hop OnDemand. At
about the same time that we launched on Comcast, three other
African American channels also entered into long-term
distribution agreements with Comcast, Video OnDemand, Quincy
Jones III's channel, and TV One. Two of the other companies
quickly folded because they couldn't secure advertisers.
Fortunately, we had General Motors, the Coca Cola Company, and
Reebok as charter sponsors. Then foreign-owned Adidas acquired
Reebok and zeroed out their African American marketing budget.
Then GM experienced their problems, came to Congress to bail
them out, and re-emerged to profitability, and they have not
come back to our channel, despite the fact that we have
experienced viewership growth in each and every quarter. If my
company was paid for every one of the 500 million potential ad
impressions generated, I could have made my own run at NBC.
The root of the problem is this, advertisers' unwillingness
to allocate minority marketing budgets in proportion to
viewership ratings, which brings me to why I supposed this
transaction.
Comcast has the best Infrastructure of Inclusion to build
upon in the media industry. Some of the very systems at the
core of the Comcast media empire were birthed by African
American media owners. The Washington D.C. cable system was
founded by Bob Johnson, and funded by Herb Wilkins and Syncom.
Syncom in Chicago, along with John Johnson and George Johnson,
founded the forerunner of Comcast's current Chicago Cable
System. When the question is posed, ``who benefits,'' I think
this history is important to note. This effort is all the more
significant that a city founded by African Americans was the
first to put broadband access within the reach for so many
African Americans. Chicago was the first of the Comcast markets
to go all digital. Analog boxes were able to be traded in for
digital boxes at no additional cost to the consumer. This is
particularly relevant to African Americans, because broadband
access was considered an additional expense. When the digital
boxes came in, it became easy to buy broadband access as part
of a bundle, which I believe has contributed to helping
increase broadband access in Chicago.
Chicago is very unique in the United States in that respect
in terms of the digital divide and the ability to use cable to
get broadband access into African American homes. As more cable
boxes are rolled out in other markets it will help bridge the
digital divide.
So, I think this history of Comcast corporate structure
with African Americans is important, because I liken this
corporate family tree to the Thomas Jefferson/Sally Hemming
descendents, it's in your DNA, you might as well embrace it.
I believe they have. I listened with great interest at the
Field Hearing on June 7th, and I also listened with great
interest to Congressman Rush's Opening Statement in a March
hearing with FCC Chairman on the National Broadband plan and
its omission of potential benefits to Small and Minority-owned
businesses.
In 2007, when Comcast allowed all of its Chicago analog
subscribers to trade in their boxes, I believe they started
going in the direction of what you were asking them in terms of
the National Broadband plan. True, it's only a start, and more
can be done, but I think this will be a big help in that
direction.
In minorities, there are substantial minorities in
management positions among its tens of thousands of minority
employees in Comcast. Moreover, in each of the last five years,
that number has continued to grow at a rate greater than that
of whites in the corporate structure. The minority composition
is vastly superior to any other media company, and is eons
ahead of the advertising, telecommunications, and financial
services industries. That context is extremely important when
we evaluate Congresswoman Waters' numbers, because what she's
saying is true. But I think if you begin to look in terms of
the direction of where Comcast is going, it's headed in the
right direction.
I'd also like to highlight some examples of how having
thousands of minorities in leadership positions at Comcast has
been invaluable to me as an African American media owner.
When we launched along with three other channels, it was
because Comcast Corporate Vice President, Payne Brown, came to
dozens of African Americans in the creative community to
educate us on the video on demand platform, and the multi-
billion dollar investment that Comcast was making to become the
industry leader in VOD. When we saw the ability to get
distribution and programming directly to our core viewers, we
were one of the few who actually raised the capital, and
secured the advertisers to pursue the opportunity. Once we were
on the platform, we began to market our channel and get support
from the African American General Managers, who run the cable
systems here in Chicago, Washington, D.C., Houston, South
Florida, and the entire Western Region of the United States,
are run by African American General Managers at Comcast. It is
no coincidence in the markets with the larger African American
populations, and African American GMs are our top performing
markets. As part of our ongoing process of making viewers aware
of our channel, we have supplied information to Comcast's
customer service teams, who are largely African American, and
supervised by an African American female Senior Vice President,
it helps when explaining our channel to subscribers.
The result is that according to a study conducted by
Starcom Media Group, African Americans are more than twice as
likely to use VOD than any other demographic.
Mr. Boucher. Mr. Griffin, you have exceeded your allotted
time. Now, if you could just wrap up, we would appreciate that.
Mr. Griffin. Sure.
Mr. Boucher. We will come back to you for questions.
Mr. Griffin. Sure. Well, I was reading the pages, but I
believe the proposed Comcast-NBCU joint venture is a step in
the right direction. Thank you.
[The prepared statement of Mr. Griffin follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Boucher. Thank you very much, Mr. Griffin.
Mr. DeSimone.
STATEMENT OF SAMUEL DESIMONE
Mr. DeSimone. Good morning, Chairman Boucher, Chairman
Rush, Representative Waters. Thank you for inviting me to
testify today on behalf of EarthLink.
EarthLink is one of the national's largest, oldest
independent internet service provider. And by independent,
we're not affiliated with facilities-based provider of
telephone, cable, or satellite services. We serve nearly 2
million customers nationwide with dial-up, broadband, and other
internet services, and frequently receive awards for our
customer service innovation.
I appear today to urge that the approval of the proposed
merger between Comcast and NBC be conditioned on Comcast's
entering into contractual arrangements with independent ISPs,
like EarthLink, for wholesale, non-discriminatory broadband
access, services at reasonable rates and terms.
Since EarthLink's founding in the dial-up in the mid-1990,
our mission has always been to provide consumers a fast,
unfiltered direct connection to the content of the entire World
Wide Web. EarthLink is one of the only ISPs out of thousands
that offered dial-up access business that has been competing in
the broadband market during the last decade.
As we look at the emerging broadband services and the
proposed merger, we believe independent ISPs can and should
play an important role in the broadband marketplace. The
proposed merger would significantly change the US media and
internet landscape. A dramatic increase in the scope and scale
of Comcast's control over the programming and content, combined
with its dominant gateway control of the broadband network
raises the risk that this will result in less competition, less
consumer choice, decreased information diversity, reduced
broadband investment and higher cost for consumers.
The merger will create even broader economic incentives for
Comcast to deny wholesale broadband access to competing ISPs.
These enhanced incentives will flow from Comcast's need to
protect the incumbent cable and anything you have to protect
the growth of online video. It is reasonable to expect the push
for Comcast to address these online stresses and formulate a
business strategy, such as, one, tying consumer access to
online content to a cable TV subscription so that the two can
either break the bundle or cut the cord. Two, engage in
broadband network practices that discriminate against competing
online video distributors. Three, withhold information
involving rivals from Comcast and NBC affiliated programming
and content. Four, enforcing conceptual description of the
current cable carriage agreements that prevent video
programmers from offering further linkages to other online
competitors. Five, increasing the slice of broadband access
especially in areas where it's the only high-speed provider to
discourage its use for online video.
Whether distinctly or in combination, these strategies
would harm consumers by forcing them to purchase bundles of
services they do not need or want, and at higher prices for
Wholesale Broadband Access Service. U.S. consumers would have
more choices of broadband providers to access this new
generation of internet services.
In these difficult economic times, this choice would give
consumers the option to break the bundle and purchase only the
services they need. Independent ISPs will have strong
incentives to bring consumers independent video without
bundling of services that dominates the market today. In such
an environment, a diverse array of independent video
programmers will also benefit because independent broadband ISP
will have no incentive to restrict access to their programming.
The resulting competition for content diversity will help keep
cable prices in check.
These arrangements should be modeled on our successful
arrangement with Time Warner Cable. Our original agreement with
Time Warner arose from conditions imposed by the FCC on the
AOL-Time Warner merger in 2000, under which Time Warner grants
us the right to provide our award-winning service to consumers
over their cable network, and in exchange we pay a mutually
agreed upon fee to Time Warner. This agreement was renewed in
2006, and continues to be mutually beneficial today. We have
found that bringing consumers a valuable, competitive
alternative helps drive broadband adoption and usage.
EarthLink's recommended solution is simple, narrow, low-
cost, easy to implement, and has already proven to be effective
in the marketplace. EarthLink believes competition would help
U.S. consumers fully realize the power of diversity, and the
possibilities of the internet. Thank you, and I look forward to
your questions.
[The prepared statement of Mr. DeSimone follows:]
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Mr. Boucher. Thank you very much, Mr. DeSimone.
Ms. Madison, we'll be happy to hear from you.
STATEMENT OF PAULA MADISON
Ms. Madison. Thank you. Chairman Boucher, Representatives
Rush, Buyer, and Waters, it's a pleasure to be here today in
Chicago to discuss the Comcast-NBC joint venture.
As the home of two iconic African American-owned media
businesses, a professional and personal friend and hero of
mine, the late, great Vernon Jarrett, the Dean of Black
Journalism, the windy city is a fitting backdrop for today's
hearing.
My written statement discusses in great detail the
consumer- and innovation-related benefits of the deal, so I'd
like to use my opening statement to highlight another important
issue, the positive impact that this transaction will have on
diversity.
Although I currently serve as the Chief Diversity Officer
for NBCU, and report directly to our President and CEO, Jeff
Zucker, my career with the company began more than two decades
ago in the newsroom as an Assistant News Director at WNBC, our
flagship station in New York City.
As I rose through the ranks of NBCU to become the first
African American female President and General Manager of KNBC
in Los Angeles, I experienced first-hand the company's
commitment to diversity. During those years, I also made it a
personal and professional priority to recruit, cultivate, and
promote talented executives of color, so when Jeff Zucker
approached me in 2007 about leaving the helm of KNBC to assume
the role of Chief Diversity Officer, it was an opportunity that
naturally complemented my career in the company.
I decided to take on the new challenge, not because I
needed to, but because I believe in NBC Universal, and remain
deeply committed to helping people of color, both new hires,
and existing executives succeed in the media and entertainment
industry.
One powerful example of the diversity issue within our
company is my dear friend, Celia Chavez, the dynamic President
and General Manager of WSNS Telemundo here in Chicago, who's
here with us today. A 22-year veteran of the television
business, Celia joined Telemundo in 1995, and has served in
senior leadership roles in several major markets across the
country, including Los Angeles, San Antonio, Los Vegas and
Denver.
Since joining WSNS here in Chicago, Celia has launched
several new programs, including Hablando Claro, Speaking
Clearly, a public affairs show focused on helping Chicagoans
improve their daily lives. This city, NBC Universal, and
Telemundo are all lucky to have Celia on their team.
On the issue of diversity, enormous progress has been made
in the five months since Mr. Zucker and Mr. Roberts testified
at length before this Committee. Through a longstanding ongoing
open dialogue, we've made real progress in addressing important
issues raised by organizations representing communities of
color, as well as some concerns members of Congress, as you
heard here today.
In early June, as an outgrowth of these talks and our own
internal discussions, Comcast-NBCU announced a comprehensive
series of formal joint diversity commitments covering a wide
range of areas, workforce recruitment and career development,
supplier diversity, media ownership, programming, and community
investments and partnerships.
In recent weeks, these important careers have been
supplemented by an agreement among Comcast-NBCU, and several
prominent organizations, including the National Council for La
Raza, the Hispanic Association on Corporate Responsibility and
the National Hispanic Media Coalition.
I'd like to take a minute to draw your attention to some
key details of the joint diversity commitments, which are
attached in full to Joe Waz's testimony. Although I hope you'll
have an even closer look at these documents, which I have here
with me in order to better understand the depth and breadth of
the commitments, let me point out some of the highlights of
this document.
At their core, these commitments not only build upon the
success of past efforts at NBCU, but break new ground. Whether
it's the establishment of four new external diversity councils
to advise senior management, or the commitment to increase
diversity among executive ranks with the assistance of
professional search firms with proven track records of success,
or the continued expansion of the geographic footprint in
original programming budgets at Telemundo, or the significant
increases in minority procurement and community philanthropic
investments. These deals include concrete and tangible benefits
for those who, like me, care deeply about diversity.
As a veteran of the broadcast news business, I also want to
mention the positive impact the Comcast-NBC new joint venture
will have on free over-the-air broadcast television and news.
By permitting to invest going forward in Telemundo and NBC News
owned and operated stations, Comcast is clearly demonstrating
its willingness to support this important industry, which
millions of families, a disproportionate percentage of whom are
low-income and minority, continue to rely on for their news,
weather, sports, and entertainment programming.
This deal does not resolve all of the unanswered questions,
or solve every problem industry faces, but one thing is clear.
It is an important and significant step in the right direction.
As Vernon Jarrett famously said in his last column before
retiring, the struggle goes on. And just as I have for the past
20 plus years, I remain committed to continuing an open
dialogue with anyone and everyone who is willing to work
collaboratively and productively with NBC Universal, and the
industry as a whole, as we take positive strides forward in
advancing the cause of diversity. I look forward to answering
the Subcommittee's questions. Thank you.
[The prepared statement of Ms. Madison follows:]
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Mr. Boucher. Thank you very much, Ms. Madison.
Mr. Waz.
STATEMENT OF JOSEPH WAZ
Mr. Waz. Chairman Boucher, thank you, and thanks again for
the opportunity to be here with you and your colleagues this
morning.
You presented the topic of this hearing in the form of a
question: ``Comcast and NBCU Universal: Who Benefits?'' I
appreciate the opportunity to answer that question.
I believe that the benefits of this transaction will
promulgate to the nation's economy, to all subscribers, multi-
channel video services, whether for Comcast or our competitors
to all who rely on over-the-air broadcasting, to independent
programmers, to creators of color, and to many, many others.
I'd like to use my time to summarize some of these benefits.
By bringing together content and distribution in this
transaction, we see significant opportunities to grow our
businesses, and to preserve and grow jobs in this sluggish
economy. As our Chairman and CEO, Brian Roberts, has said on a
number of occasions, ``This transaction is a bet on America at
a time when few such bets are being placed.''
Consumers will benefit because this transaction will
accelerate the anytime, anywhere digital video future the
consumers want and demand. All consumers will benefit because
as Comcast becomes more innovative, our competitors in
satellite, phone company, and other video providers need to
innovate, too.
As Ms. Madison explained, this transaction will benefit
households that rely primarily on over-the-air broadcast TV,
which are disproportionately minorities, senior citizens, and
low or fixed income. Although broadcasting is a challenged
business, we have committed to invest in NBC and Telemundo to
make them stronger and to make the services continue to meet
the needs of over-the-air viewers, and all viewers.
Independent content providers will also benefit. We can
never possibly serve the needs of all viewers solely with the
content that this company will own. This transaction will help
open up new opportunities on our OnDemand and online platforms,
as well as our traditional cable platform, that we'll be
pleased to discuss. And we hope that this will make possible
many more success stories like those of Will Griffin and other
independent content creators and entrepreneurs.
In addition, we committed to add 10 new independently owned
and operated cable networks over the next eight years, and we
will dedicate most of those new opportunities to channels that
are already owned and controlled. Moreover, as NBCU divests one
of its Los Angeles television stations, it has committed to do
its best to insure that a minority owner will acquire this
station. And in the event that any future divestitures of
broadcast or cable assets, we will take special steps to seek
minority purchasers.
Diverse communities across America will benefit. We have
set a series of diversity goals in procurement, employment,
governance and philanthropy to build on our current records, to
help implement and monitor these initiates. As Ms. Madison
mentioned, we will establish a joint diversity council to work
collaboratively with our combined companies. The joint council
will comprise councils representing the African American,
Hispanic, and Asian Pacific Islander communities, and a fourth
council to include representatives of veterans, the LGBT
community, and people with disabilities, among others.
Labor unions and guilds who produce creative content will
benefit. We have reached out to them to convey our commitment
to honor existing collective bargaining agreements, and we are
grateful for the favorable comments on our joint venture for
the Teamsters and the Directors Guild of America. Also
benefitting in the transactions and parents and care givers,
minority entrepreneurs, and new technology, and many others.
And I hope to be able to say more about this during question
time.
Many of the public interest benefits I described flow
organically from this transaction. Others are the result of
discussions we've had over the last six months with responsible
organizations and leaders who have thoughtfully raised their
concerns, and worked with us in good faith to address them. For
example, as Mr. Buyer has noted, we had discussions with NBC
network affiliates and non-NBC affiliates. They wanted to
ensure that our commitments were sincere and we have reached a
firm that they believe that. We've also met with diversity
leaders, independent producers, and many others. We have
reached a number of mutually satisfactory agreements with
various stakeholders, and hope to announce more in the coming
weeks.
I think this shows how Comcast has always approached our
business and our public interest responsibilities through a
willingness to have open dialogue with reasonable people about
legitimate concerns. And we always sought resolutions that are
good for all sides.
Mr. Chairman, I'd like to close by noting the massive
record of support for transaction at the FCC. As of last
Friday, over 860 organizations and leaders, including 84
members of Congress, eight governors, over 115 state
legislators, over 40 mayors, and countless Chambers of
Commerce, civil rights, civic and community organizations have
filed supportive comments. More than 100 of these filings came
from Greater Chicago, and, Mr. Chairman, with your permission,
I'd like to ask that they be made part of the record.
Mr. Boucher. Without objection, that will be included in
the record.
Mr. Waz. Thank you, sir.
Mr. Boucher. Does that conclude your testimony?
Mr. Waz. One last comment, if I may.
Mr. Chairman, I'm also pleased to share with you, with Mr.
Rush's and your acquiescence a letter that our Executive Vice
President and Chief Diversity Officer, David Cohen, has sent to
Congressman Rush. The letter summarizes some further
refinements of our diversity commitments that were brought up
in our discussions with Congressman Rush. We also continue to
discuss certain concerns that Congresswoman Waters has and were
brought to our attention, as well.
And we've very excited about this transaction. Thank you
for the opportunity to share our views, and now I do look
forward to your questions.
[The prepared statement of Mr. Waz follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Boucher. Mr. Waz, thank you very much. And thanks to
each of our witnesses for sharing your views with us on the
matter this morning.
I have just a couple of questions. Mr. Waz, I know that
Comcast, as part of its voluntary undertaking on diversity
matters has committed to add at least two independently owned
channels to its lineup in each of the next three years. And
it's also committed that at least half of those channels will
have substantial minority ownership interest. Is it your intent
to put those independently owned channels on all the Comcast
cable systems, or only on part of them?
Mr. Waz. Mr. Chairman, first of all, let me begin by just
updating the commitment as we continue to have discussions with
our diversity organizations, and the agreement we have reached
with the Hispanic Leadership organizations.
We plan to enhance the commitment so that we're now
prepared to add 10 independently owned and controlled channels
over a period of eight years. We intend for four of those to be
owned by the Latinos. And per the letter that we were sharing
with Mr. Rush this morning, we have also committed to make a
minimum of four of those channels, channels that are owned and
controlled by African Americans. We intend to give them
substantial carriage according to what I'll call customary
terms and conditions in the industry. Each new network needs an
opportunity to establish itself, and we've worked with--I'll
give you an example of a network in which we had an ownership
stake, and that is TV One.
I think TV One stands out as, actually, exactly the sort of
opportunity that Congresswoman Waters and others are pointing
to, which is what can a company, a significant media company do
to help promote media ownership, media distribution
opportunities for African American programming? And I think as
he was alluding in his testimony in Los Angeles, he stated how
important and how sincere the Comcast commitment was to help
them grow that effort.
Even that network at conception did not appear on all
Comcast systems. And even today, we continue to add it on
Comcast systems. So, I would anticipate in each case with each
of these networks that we talk with, we will reach terms and
conditions for appropriate levels of introduction of these new
networks in markets as appropriate across the country.
Mr. Boucher. Well, I guess my question is, have you
determined what markets are appropriate, and what assurance do
we have that while the commitment you have independently come
to, for example, minority ownership interest in a number of
these channels, new channels added, that we are given to
understand that there are actually going to be carried on a
very large majority of your cable systems. Can we get that
assurance?
Mr. Waz. I can assure that we intend to work with each
independently owned channel, just as we work with several other
new independently owned channels, more than a dozen of whom I
believe have put letters on the record with the FCC saying that
it's independently owned and operated channels. They work very
successfully with Comcast in order to do this.
Mr. Boucher. OK. Let me ask you another question. As was
indicated by Mr. Jackson in his testimony earlier, there is a
notable lack on major networks of prime time programming with a
minority presence. And we don't have anything on any of the big
four networks today that remotely resembles the ``Cosby Show,''
for example.
I'm wondering if the diversity commitments that you have
voluntarily made, which I view as extensive, would serve to
increase diversity programming on prime time network
programming, in your opinion?
Mr. Waz. I'm hopeful that that will be among the many
salutary results of--if I may, if I can defer to Ms. Madison,
who will offer her opinion.
Mr. Boucher. Ms. Madison, do you care to comment on that?
Ms. Madison. Yes, Mr. Chairman.
We entered into an agreement back in 2000 with four
external watchdog groups, and we've been reporting up to them
annually, and quarterly, actually, for the past three years. In
that time period, we have continued to add diversity both up
front and behind the counter. There's no question that the
industry has a long way to go, and this is not a situation
that's limited to just NBC Universal. But having said that, and
specifically regarding the ``Cosby Show,'' we have at NBC
Universal increased the numbers of on-camera actors who are
diverse year over year, so much so that this season coming up
beginning in September, we have our most high-profile new drama
called ``Under Cover,'' which has two blacks as the leads in
the show. There's a cast of four people, of that cast, two are
leads, one is also African American, who is also in that cast,
and there's one white male. We also have the President of the
United States cast as an African American in a lead role in
another program called ``The Event.'' And we also have a famous
actor, Jimmy Smits cast as a former Supreme Court justice in
another one of our major dramas that's called ``Outlaw.'' So,
we are moving----
Mr. Boucher. So your answer is, the trend is positive.
Ms. Madison. Yes, it is.
Mr. Boucher. And we would see this confirmation on the
voluntary commitments that it entails as, perhaps, accelerating
that trend?
Ms. Madison. Yes. I think that's reasonable.
Mr. Boucher. Mr. Griffin, let me ask a question of you. As
I'm sure you're aware, NBC, you, and Comcast have made a number
of voluntary commitments respecting diversity in the areas of
corporate governance, employment, procuring programming, et
cetera. You support the confirmation. Is it your view that
these voluntary commitments might encourage other media
companies to step up and follow suit? Could we expect this to
become an example that other media companies might be expected
to follow?
Mr. Griffin. Yes. I think that's the secondary benefit, but
I think the primary benefit would be among advertisers and
private equity and venture capitalists, because they will step
up and say there is a distribution commitment to this type of
programming. And then they will come into the market and say if
it's over a decade, and we know we can invest our client's
money into these companies and then they will get support,
that's a direct benefit to the industry and the programming.
Mr. Boucher. All right. So that level of investment would
increase the volume of independent programming that might
encourage, entice some of the other media companies, but select
the programming they think is the most attractive and
appealing. You have more volume and more companies might be
willing to accept your content. Would that be a fair
conclusion?
Mr. Griffin. Supply and demand.
Mr. Boucher. Mr. Jackson, would you care to comment on
these letters?
Mr. Jackson. Well, yes. I'd like to share with you that I
tried to purchase Eye on Media this past December when they
were in bankruptcy. I went in with a hedge fund to purchase the
debtor in possession paper. The current management had offered
$150 million. Our package was $250 million, at which time we
went through appeal, and went through the courts in the New
York area, and there were aggressive bankruptcy practices
issues that they had. And we were unsuccessful.
But here's another case where minorities, and I was leading
the group, showed up with more money than the current
organization that failed in its operation of 64 radio and
television stations, but we could not have equal access. So,
I'm just a little bit concerned about the conversation that's
happening now, because I'm not really concerned talking about
diversity, I'm talking about equal opportunity in that access
to stations that affect the public interest.
What I'm talking about is equal opportunity, not diversity.
I think it would be too much of a burden to place upon the
owners of Comcast and NBC to have, to be able to select
philanthropy. I think there's enough entrepreneurs in the
community that like to shape our own destiny without having
someone else that needs to work up the bottom line for their
company to be concerned about how they will diversify. If we
had access to ownership, we can diversity ourself. We can hire,
and we can reverse diversity where blacks can hire Caucasians,
or not necessarily Caucasians have to put blacks in front of
the screen. I think that's very important.
And I will tell you that in Chicago, a community that's
over 50 percent female, there's less than 6 percent ownership
in television and radio by females. So, in order to move
America forward, I think women and children have to have a
place on the agenda. So, it's not about getting a black on the
screen, or whatever. It's also effecting what the demographics
are.
I've seen more fictitious programming on a child that was
not in a balloon, dealing with CNN and everybody running their
programming that over 50 million Americans facing hunger, more
than a million American students going to school that are
technically described as homeless by the Department of
Education, so where's the real news, where's the real content
coming from, not just the window dressing. So, I would like the
conversation to be about opportunity, not philanthropy, not
about just diversity, but about the divestiture, so we can have
equal opportunity, and equal access to create more.
Mr. Boucher. OK. Thank you very much. My time has expired.
The gentleman from Indiana, Mr. Buyer, is recognized.
Mr. Buyer. Mr. Jackson, you kind of pulled me in. Do you
want me to believe that minority ownership directly relates to
minority programming? Is that what you want me to believe?
Mr. Jackson. That minority? Say it again, I'm sorry.
Mr. Buyer. Minority ownership directly relates to minority
programming.
Mr. Jackson. Could you further explain?
Mr. Buyer. No, is that the statement that you want me to
believe based on your statement?
Mr. Jackson. Yes. Correct.
Mr. Buyer. And in order to achieve that, are you saying
that we're to ignore economics principles?
Mr. Jackson. No.
Mr. Buyer. OK. And if we say no, then how is it achieved?
It's almost like with Mr. Griffin, your testimony. I was
following you all the way up to where you made your comment,
``If my company was paid for every one of the 500 million
potential ad impressions, I could make my own run at NBC.''
Well, that's if everyone would buy every widget every
manufacturer made in my congressional district, they'd make a
lot of money. I mean, I don't know how--I know I followed you
all the way up until you made that statement, I want you to
know.
I also want to put this on the record, Mr. Griffin. I want
to congratulate you. I think you've had an extraordinary
career. And I read your statement last night. I've also
followed you, so I want publicly to say, and I wanted to take
the opportunity to say it personally, that I respect you, and
congratulate you on your career.
Mr. Griffin. Thank you.
Mr. Buyer. Your statement with regard to some of the
programming with regard to--that fell out, ``Girlfriends,''
``Eve,'' ``All About Us,'' ``Everybody Hates Chris,'' there is
something else in the marketplace, is there not, Mr. Griffin,
that the total audience reach must be great enough to cover the
cost of production. Isn't that a basic in your business?
Mr. Griffin. Yes.
Mr. Buyer. Yes. And if it doesn't work, they're going to
cancel the show. That happens a lot, doesn't it?
Mr. Griffin. Well, yes, but there are three parts of this.
One part is the cost of the programming. The other part is the
availability of distribution, and then the third is revenue
generate, or here's the profit.
Here's the problem. When you have a success, like when you
have a ``Seinfeld,'' you make a--if there are 10 million
viewers, advertisers will pay you for all 10 million viewers.
If you have ``A Different World,'' which was as big as
``Seinfeld,'' but it was on and 10 million viewers, advertisers
were only paying you for 8 million, because the African
American budget stops at a certain amount, so the minority
budgets at advertisers are smaller, which means their money
runs out, so you don't get paid the same. So, you're actually
being paid less money per viewer than you would for a white
household because the budgets are smaller. And what that means
is there's a defect in the market.
Now, when there are market defects, it creates
opportunities for some people to take advantage of. What we're
trying to say, what we've been saying to Comcast, at least on
the OnDemand platform, what should be independent areas, and
what independent is, there is an opportunity now to capture
more of that market because of the defect, but in order to
solve the defect, we have to go to advertisers and get them to
commit to pay us for every view or impression generated. I
mean, what you're saying is a textbook argument, which is hey,
not enough money, cancel the show. Yes, but the issue, you
know, I think Congresswoman Waters said it, why isn't there
enough money. Because Coca-Cola, General Motors, Johnson &
Johnson will not pay for every African American impression.
That's the bottom line. There's a defect in the market. It's
not working efficiently, so that creates an opportunity for
Comcast and Universal to go capture it.
Mr. Buyer. Mr. Waz, in the non-affiliates agreements--first
of all, let me also take the opportunity, once again also
compliment what you did in the marketplace.
Mr. Waz. Thank you, sir.
Mr. Buyer. I got a lot of these different companies
together, what I thought was going to happen, even those
outside the non-affiliates would attach their concerns into the
non-affiliates consortium, but you can't get everybody in the
same room. And not everybody, necessarily, agrees, so you end
up with sort of a, even though we have a non-affiliates
agreement that made it to the table, those three only brought
issues which were of consensus. So, even though there's a piece
of paper in front of us, I believe that there's still work yet
to be done. That's just my own personal sensing from this. And
you have to believe that, too.
Mr. Waz. As with all the agreements that we have reached,
or hope to reach, I'm sure there will be continued discussions
about this.
Mr. Buyer. Is broadcasting still relevant in the new media
environment?
Mr. Waz. Broadcasting is still the way to attract mass
audiences. It's the place where special events in America,
where America still gathers collectively to watch major events:
sports, inaugurations and other events. So, we believe
broadcasting absolutely has a place, and we're investing to try
to make broadcasting in the form of NBC and Telemundo stronger
and sustainable in the future. And working with the affiliates
today.
Mr. Buyer. Thank you, Mr. Chairman.
Mr. Boucher. Thank you very much, Mr. Buyer.
The gentleman from Illinois, Mr. Rush, is recognized.
Mr. Rush. Thank you, Mr. Chairman.
Let me, first of all, begin by asking Mr. Jackson a
question. In your exchange with my colleague from Indiana, Mr.
Buyer, what is your counsel for the need to have more
minorities to own networks, media, and you said that if the
minorities owned the media, then the possibility, or the
proclivity, or reason for this conversation that more minority
ownership would mean higher ads and there would be more
minority programming. Is that correct?
Mr. Jackson. Yes, sir.
Mr. Rush. Now, that's very important, and I agree with you.
But would you limit your ownership, or limit those same results
to--let me put it like this. If an African American owned a
station that was aimed at say a mostly white market, would that
African American be successful owning that station, or is it
just limited to an African American market to have to provide
media opportunities and media services to the African American
community?
Mr. Jackson. That's a great question. It would speak to the
local demographics, that the NBA can be majority owned by
Caucasians, and predominantly having the players to be African
American. They can have an international market appeal. Well,
that speaks to the demographics as it relates to basketball.
The same thing would happen, if you're in a rural area
being mostly Caucasian, naturally, you would adjust the
programming. And the same thing would happen here in the City
of Chicago, where the local content and news, we have very
pressing issues, could reflect the community interest.
Mr. Rush. Just because it's African American owned network
does not mean that that network should be, or has to be geared
toward an African American demographic. Is that right?
Mr. Jackson. Correct. And I would cite the example of
Motown, and the music that it created. There are general
markets that we--I don't know if Mr. Buyer was asking me a
question, or made a statement, but I would say that as far as
local, about African American ownership and content, that I
would look at--I don't know if it was denied, or if it was an
oversight, for the first time my son saw the word ``hate'', and
asked me could I share with him how it was a bad word. He was
looking at an outdoor billboard, and the billboard read
``Everybody Hates Chris.'' And he's a young African American
male child, and he sees ``Everybody Hates Chris,'' but
``Everybody Loves Raymond.'' So, if we had access to
opportunity for ownership, we could help shape that imagery
ourselves.
And I would refer you to the FCC document that Mr. Griffin
was----
Mr. Rush. No, you're on my time.
Mr. Jackson. Sorry, sir.
Mr. Rush. I'm being charged with it, so let me move on.
Mr. Buyer. Mr. Rush?
Mr. Rush. Yes.
Mr. Buyer. Will you yield to me an extra minute?
Mr. Rush. Yes.
Mr. Buyer. I just want to touch this, because you referred
to something that I would make comment on.
The reason I had made that perhaps as a statement, I wanted
to get a sense of what you're urging not just us, but people to
believe based off your testimony. OK? Well, I can agree with
you that you say a minority owner can increase minority
programming, I do not believe that a minority owner would say
that that only means minority programming. I don't believe
that, because it's economics. You're a businessman. That's why
I compliment Mr. Griffin. You're going to follow the dollar.
You're going to also follow the eyes. You're going to also
follow the advertising. You're also an artist, and you can
build things, and want to be creative. You want to deliver into
the marketplace. And that's what's important, especially
capturing the new wave on the delivery of video services. And
that's what Mr. Rush----
Mr. Rush. I'm reclaiming my time, Mr. Chairman. I know my
timing and I do have some very important questions I want to
ask.
First of all, I want to--after listening to, and discussing
and sometimes heated exchanges with a number of interested
stakeholders, Mr. Chairman, I want to ask for unanimous consent
for this Committee to accept additional information in the form
of a letter, as mentioned by Mr. Waz earlier as to the
agreement that Comcast submitted to the FCC that outlines their
specific plan for including the minorities in a more robust and
regular basis.
Mr. Boucher. No objection.
Mr. Rush. All right. And a little more with the letter just
entered into the record. Can you expound more on, if you will,
on the Venture Capital Fund that you have included in terms of
this letter? Can you expound more on that? What--can you give
us more of the details, and what problems are you attempting to
solve going forward?
Mr. Waz. Mr. Rush, thanks for the opportunity to talk more
about it. I've been a friend of David Honig, the Minority Media
Telecommunications Council for probably three decades now, and
he has fought and tried for many years to try to create more
opportunities for minority ownership, pursuing policies such as
tax certificates, which have been supported on a bipartisan
basis at various points and other efforts to support minority
ownership in traditional media.
Over the last few years, he and I have been talking a lot
about what are the opportunities in new media and in technology
for minorities, and this is an excellent time to be moving
forward to ways that in an internet-based world where frankly
there are fewer barriers, fewer distribution barriers, that
there could be more innovation, more opportunities for minority
entrepreneurs.
I know that Commissioner Clyburn of the FCC has mentioned
on a couple of occasions that she knows someone, an African
American who started a very successful Web site for, I believe
the number is $256, that may be on the high side, those numbers
she cited, but it was--you can do a lot with a little in this
market.
What we think would be beneficial is to create more
opportunities specifically to seek attractive young talent,
people who would be interested in moving into the new
technology fields from the minority community, and coming up
with appropriate funding base to get them started. So, the
notion we've laid out in the letter to you this morning says
that we are prepared to make $20 million of investment capital
available through a new program within Comcast that will look
exactly to those sort of opportunities, and work with a diverse
leader of that fund effort to identify funding opportunities.
Mr. Rush. Will you address and expound upon, or you have in
your letter divestiture of 40 assets and minority ownership.
What do you mean by that, and what is that aimed at?
Mr. Waz. In connection with this transaction, the only
anticipated divestiture of asset is the Station KWAY in Los
Angeles. That station is currently owned by NBCU-Comcast until
its closing and what happened at KWAY. But NBCU has made a
special effort, in fact, has hired an NTC, which has a
brokerage business, has been very successful at finding
minority buyers, minority purchasers for radio, and cable and
TV stations over the years to create that ownership opportunity
there.
In the event of any other cable divestiture, or broadcast
divestiture in the future, which would be required out of this
transaction, we will be similarly creative, and similarly
destructive in looking for minority ownership opportunities.
Mr. Rush. Mr. Chairman, I yield back.
Mr. Boucher. Thank you very much, Mr. Rush. Ms. Waters.
Ms. Waters. Well, thank you very much, Mr. Chairman. I
would like to preface my remarks by saying that my colleague
was correct about this merger being under the radar screen,
being very quiet, not being talked about until I requested and
received from the FCC an extension of the comment period. I got
45 extra days for the comment period because it had been very
quiet. And I also requested of the FCC to hold hearings, and
one will be coming up. And I got the Chairman of the Judiciary
Committee, Mr. Conyers, to hold a hearing, and I'm very
appreciative for this hearing.
Why is all of this important? It is important because
neither NBC, nor Comcast, made any of these moves that they're
describing until all of this began to unfold. Since we have
been highlighting this merger, and talking about the lack of
diversity, then we're finally getting some people coming
forward to talk about doing some things.
As a matter of fact, the Latino that was placed on the
board of, what is it, NBC or Comcast? Comcast plans to add a
Latino Board member amid proposed NBC deal. This happened in
the past few weeks. The proposal that you just alluded to that
you're giving to Mr. Rush today, I'm glad we're having this
hearing, so that you can give it to him, because we've not
heard about that until the last few days.
The Memorandum of Understanding that you have with the
Latino group came about in this period of time that we created
to have more comment, and to have hearings. So, we have to keep
up the pressure, because despite the fact that both NBC and
Comcast talk about their commitment to diversity, it has not
been evident. You don't have diverse companies. I don't know
how many years you've been working at this, but you've not been
successful. So, we've got to help you. We've got to help you to
be successful.
It is absolutely unacceptable. We're talking about some
programming, and I think the Chairman asked a significant
question, because the devil is in the details, about whether or
not you create channels and opportunities. We're talking about
distribution and carriage, and there's no commitment to that.
He questioned you very closely, and you did not give him a
specific commitment to distribution and carriage.
Let me just go to another aspect of this that bothers me.
Let's take a look at NBC News. Early today, Glen Berry, Bill
Cowan, Fred--all white. Today we have some diversity, Matt
Lauer, Meredith Vieira, Ann Curry who I guess is going to be
gone, along with Al Roker, MSNBC, First Look, all white, Glen
Berry, Thomas Roberts, Way Too Early with Willie Geist, all
white. My friend, Morning Joe, Joe Scarborough, Mepa, Rasinski,
Willie Geist, all white. All of this is MSNBC. The Daily
Rundown, Chuck Todd, white. Savannah Guthrie, white. MSNBC
Live, Chris Jansing, Tamron Hall, one black, Andrea Mitchell
Reports, white. Hardball, Chris Matthews, the Ed Show, my
friend Ed Schultz, all white. Countdown with Keith Olbermann,
like him a lot, all white. The Rachel Maddow Show. Well, what
is that?
When you sit here and you talk about this vast audience
that you have, that's depending on the news, you've got to ask
yourself why, why don't we have more diversity in the news
that's reporting from African American, Latino, Asian
perspectives on what's going on. This can't continue. And if
this merger takes place, if this consolidation takes place, and
we don't have a way of enforcement by which we can force you to
live up to commitments for diversity, we end up in a democracy
with consolidation that does not serve the best interest or the
images of all of the people who deserve, as citizens of this
country and this democracy, to be served.
I could go on, and on, and on about all of NBC shows. When
the Chairman first came to the Judiciary Committee, Mr. Zucker
told me that they didn't have any African American shows in the
new season because he couldn't find any producers and
directors. And I said I know a lot of them, let me help you.
I don't understand how this business works. And we have
staff full-time working to discover exactly how you do work,
and what you have, and what you don't have. And I want you to
know you have failed miserably. I yield back the balance of my
time.
Mr. Boucher. Thank you, Ms. Waters.
I want to say thank you to the witnesses for joining us
here today. Ms. Madison, to you, in particular, congratulations
on your long career, and commitment to diversity issues. To all
of the witnesses, thanks for the constructive comments that
you've made. You have made this hearing a success, and I very
much appreciate the commentary you have shared with us today.
Mr. Rush, did you want to say a word?
Mr. Rush. Yes, Mr. Chairman, before we adjourn. I just
would like to state for the record that as we proceed down this
path, I'm not sure what is being filed. I'm not sure whether
the FCC, what their final ruling will be. I'm not sure what the
Justice Department's final ruling will be. My colleague from
California, Ms. Waters, made some very profound statements. And
one of the things that I know is that this is, or can be, or
should be if the stakeholders, the affected parties, Comcast
and NBCU, we can begin to rewrite the sordid history,
particularly over the last eight years, continuing the trend in
media ownership.
I sat on this Committee for 15 or more years now, and the
last eight years have been the most horrendous eight years that
I've seen in terms of the FCC. Although the Chairman, who is
the outgoing Chairman, always had a receptive ear, making empty
promises and pledges that he was going to look for new
ownership, he never engaged not one millisecond in pursuit of
media opportunities for ownership for black people in media
ownership. That day is over, and that time has past. He is
gone. This is a new day, new time, new opportunity. And we have
a new administration, new members of the FCC. We will work
vigorously in terms from an oversight perspective, and also
from an activist perspective to ensure that, whatever you are
promising, it's those promises that you make.
Whenever you return back before the appropriate authority
and that you're going to be dragged through the mud and the
world will know that you have broken your promises. So I want
to know that these were just not being done in the back room.
I hope that this is the beginning of the something
meaningful and important, and we can try to level the playing
field as it relates to minorities and media ownership. Mr.
Chairman, with that, I yield back the balance of my time.
Mr. Boucher. Thank you very much, Mr. Rush. I'm going to
ask unanimous consent to insert into the record a letter signed
by Tracy Jenkins Winchester, the President of the Multi-
Cultural Network. Without objection, this will be made part of
the record.
Our witnesses have done a great job today. Our thanks to
you, our thanks to members of the panel for their decisive
questions, and this hearing stands adjourned.
[Whereupon, at 11:52 a.m., the Committee was adjourned.]
[Material submitted for inclusion in the record follows:]
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