Skepticism Aplenty Over Black-Owned Programmer's Diversity-Based Carriage Quest

Allen said he expects his litigation, claiming racial discrimination by Charter and Comcast in their decision not to carry any networks owned solely by African-Americans such as Entertainment Studios, to have ramifications beyond the pay-TV world: “These lawsuits will open the door to greater economic inclusion throughout the entire economic ecosystem. [The argument] will be used against a lot of different corporations.” Entertainment Studios said it's considering legal action against the New Jersey Board of Public Utilities (BPU) for its sign-off on Charter's buying Bright House Networks and Time Warner Cable. In its Charter/TWC/BHN approval, the BPU "never even asked a question about this lawsuit -- that’s the institutionalized racism everybody is going to be held accountable for," Allen told us.

Entertainment Studios/NAAAOM "certainly have shed light on the lack of diversity on MVPD systems," National Hispanic Media Coalition Vice President-Policy Michael Scurato told us. While NHMC has tried to highlight the issue, the group hasn't discussed going as far as legal challenges or FCC complaints, he said.

Diverse programmers often find themselves "painted into a box" where MVPDs seem to believe having a few diverse channels means they don't need to add any more such programming, Scurato said. "The way we see it is, it's not just a matter of counting up the Spanish-language channels you're offering up in a system. We're not only concerned with Spanish language but bilingual, multilingual." Much of the Spanish-language content carried on MVPDs is from Central or South America, "which isn't necessarily contributing to jobs or a pipeline of talent here in the U.S.," he said.

Since Entertainment Studios launched with co-plaintiff the National Association of African American Owned Media (NAAAOM) legal actions with a 2014 suit against AT&T/DirecTV that was settled last year (see 1601280063), and then the Comcast and Charter actions, it's become easier to work with other multichannel video programming distributors in carriage talks, said Allen: "Nobody’s punishing me, nobody’s blackballing me. Now that people see we’re serious about holding MVPDs accountable, everybody else has pretty much come to the table. We’re being treated very nicely by other MVPDs. The only thing disappointing about my lawsuits, I wish I had done them 10 years ago.”

The Entertainment Studios/NAAAOM complaints don't seem aimed at vindication of a particular grievance, but "read more like an opportunity for a PR stunt," a Comcast official told us, calling the claims "outlandish." "They do not describe an actual, actionable grievance," the Comcast official said, saying the aim instead seems to be "become enough of a burr on the side of everybody [that Allen] will be carried to keep him from engaging in this campaign."

One lawyer who represented cable and broadcast clients said carriage complaints usually allege a channel didn't get picked up because an MVPD instead decided to carry an affiliated network. Allen's FCC complaint -- that it violated its voluntary commitment to add to its carriage four independently owned and operated programmers in which African-Americans have a majority or sizable ownership that was part of its the NBCUniversal takeover -- isn't based in any law, a Comcast source told us, saying the network has kept its commitment by adding the Aspire and Revolt networks: “His argument is, 'I'm just mad you didn’t pick me.'” A Comcast executive told us the company plans to add diverse programmers, as it gets proposals for Hispanic-owned networks, and plans to add African-American owned channels beyond that.

"This is a desperate tactic that this programmer has used before with other distributors,” Charter said in a statement. The FCC didn't comment. The New Jersey BPU said it voted to approve New Charter Feb. 24, days before it received Entertainment Studios' letter dated March 3, and Entertainment Studios/NAAAOM never requested to be an intervenor in the seven-plus months of regulatory review. The state agency also said it hasn't received a petition Entertainment Studios claimed it filed.

Allen said Comcast and New Charter should be pursuing what he called “four 10s”: committing 10 percent of their channel space to networks solely owned by African-Americans, giving those channels 10-year carriage deal, and guarantees of penetration of at least 10 million homes and 10 cents a home. Such terms would guarantee the ability of nascent black-owned networks to finance productions, he said.

“Black America does not have economic inclusion as it comes to corporate America,” Allen said. “That’s the only thing we should be talking about. The real issue is, hey, Comcast, how is it you’re spending $10 billion a year licensing cable networks and none of it is going to 100 percent African-American owned media? Charter, you have an all white male board, you’re not doing business with 100 percent African-American owned media -- does that sound like a good corporate citizen to you? The people who own the Spanish-language networks can’t even speak Spanish. The Latino community should own their networks. The African-American community, we do not own our networks.”

Diverse programmers often find themselves "painted into a box" where MVPDs seem to believe having a few diverse channels means they don't need to add any additional such programming, National Hispanic Media Coalition Vice President-Policy Mike Scurato told us. "The way we see it is, it's not just a matter of counting up the Spanish language channels you're offering up in a system.

Entertainment Studios/NAAAOM also have complained of the FCC’s proposed New Charter conditions not including any language on independent networks or programming diversity. Addressing alternative distribution method and most-favored-nation clauses would help indie programmers already carried by cable operators but “fail to deal adequately with the challenges [African-American owned] programmers have gaining carriage in the first place and do not remedy the paucity of video made by, for, and with African Americans and other minorities in today’s video market, a problem that will only grow worse with the consummation of this merger,” it said in an ex parte filing last month in docket 16-41.

“The rhetoric being utilized is over the top,” a lawyer for one of the parties sued by Entertainment Studios/NAAAOM told us, saying by focusing only on sole proprietorships or on partnerships where the ownership is solely African-American, “You can get a sense of what’s motivating this -- ‘these companies are discriminating against a class of one: me.’"