Time Warner, Comcast sued for $20 bn over racial bias
24 February 2015
Legal proceedings have been initiated against Comcast Corp and Time Warner Cable Inc for allegedly discriminating against African- American-owned media and employing advocates such as the NAACP and the Rev Al Sharpton to advance their bias, Reuters reported.
The $20-billion law suit was filed on Friday in Los Angeles federal court by the National Association of African-American Owned Media as US regulators reviewed the proposed $45-billion merger between the two biggest US cable operators.
In December, the same group had filed a $10-billion lawsuit against AT&T Inc and DirecTV, whose own proposed merger was also under regulatory review.
The complaint accused Comcast of entering into "memoranda of understanding" with Sharpton, the NAACP and other advocacy groups to provide large cash "donations" in exchange for their not interfering with its alleged refusal to contract with African-American-owned media.
According to the complaint the agreements were entered into after Comcast drew criticism for similar failures in 2010 when it was buying part of entertainment company NBC Universal, which it now fully owned.
According to the complaint, Sharpton and his National Action Network, allegedly received "over $3.8 million in 'donations' and as salary" for his work as an MSNBC host.
The suit has been filed by television entrepreneur Byron Allen who is African-American, owns the Los Angeles television production and distribution company Entertainment Studios, which included such digital channels as Justice Central, Cars.TV and Comedy TV.
The lawsuit, filed in US District Court in Los Angeles, contended that Allen's company had been stymied in its attempts to secure distribution for its small networks on cable systems owned by Comcast and Time Warner Cable.
According to the suit, while Comcast distributed for several channels that included minorities as part owners, the Philadelphia cable giant has not embraced Allen's company, which was 100-per cent minority owned.
"100% African American–owned media has been shut out by Comcast," the lawsuit alleges. "Of the approximately $11 billion in channel carriage fees that Comcast pays to license television channels each year, less than $3 million is paid to 100% African American–owned media."
The suit also claims violation of civil rights.
Comcast yesterday termed Allen's allegations "frivolous" and in a statement said it had been involved in "good faith negotiations" for several years to strike a carriage deal for Allen's channels.