Hispanics hold the key to the Comcast merger

WASHINGTON – To ensure its massive merger with Time Warner Cable stays on track, Comcast has invested heavily in lobbying and advertising aimed at federal officials reviewing the deal. And as part of its Washington blitz, Comcast is turning to another powerful group to help make its case: Hispanic Americans.

Hispanics are quickly becoming vital to Comcast’s merger prospects, in part because of how directly the $45 billion deal could affect them. Hispanics account for more than half the subscribers of Comcast’s $10-a-month Internet service for the poor, with many more potentially to come. Both California and Texas are home to large Latino populations, where Comcast stands to pick up new subscribers if its deal to buy Time Warner Cable, America’s second-largest cable company, is approved by regulators.

The merger would create a mega-company with control of more than 30 million pay-TV customers and 32 million Internet subscribers. It would also give Comcast unprecedented power over content, distribution and advertising – with that reach extending possibly to other industries outside of the traditional cable business.

To sell the merger to skeptical regulators, Comcast is vying to explain how the deal would uniquely benefit Hispanics, the fastest-growing minority group in the country. Opponents, too, have sought to draw Latinos to their side. The result is an all-out battle for the hearts and minds of a major ethnic group, one with the cultural and economic sway to help shape the fate of the media industry. Few other minority groups have received so much attention from either side in recent memory.

“We recruit, retain, and promote Latinos at every level of the company,” Comcast executive vice president David Cohen wrote in a recent blog post highlighting the company’s commitment to Hispanic Americans. “We’re aggressively expanding the business we do with diverse suppliers and regularly award contracts to Latino businesses of all sizes.”

Last month, Cohen talked up the merger’s benefits before the U.S. Hispanic Chamber of Commerce. And Comcast has lined up dozens of Hispanic groups – such as the Cuban American Council and The Latino Coalition – to argue on its behalf before lawmakers, regulators and the public.

“Comcast is a sophisticated company that knows which buttons to push,” said Adonis Hoffman, an adjunct professor at Georgetown University and a former official at the Federal Communications Commission, an agency that has part responsibility for evaluating the merger deal. “It will call on those organizations to say good things when it counts the most – in a merger review at the FCC.”

Comcast declined to comment on whether its recent outreach to Hispanics is linked to its pending merger with Time Warner Cable.

The Justice Department is also studying whether the merger would be good for consumers. A major concern is whether Comcast would control too much of the market for television and high-speed Internet. Critics of the merger fear Comcast could use an expanded subscriber base to force its preferred terms on business partners and rivals.

Comcast’s merger with Time Warner Cable could harm Latinos in particular, opponents say. The Stop Mega Comcast coalition, a group that includes the Hispanic advocacy group Presente.org, singles out Latinos on its website as a population particularly vulnerable to Comcast’s dominance in Hispanic programming. Comcast owns Telemundo, one of the world’s largest Spanish-language programmers.

“Telemundo is in direct competition with other providers in Spanish who make content,” said Rep. Tony Cárdenas, D-Calif., in a recent interview with Salon. “If those companies can’t negotiate to be on Comcast cable, they go dark in large markets.”

Comcast argues that its investment in Telemundo, and its carriage of independent Hispanic networks such as El Rey, is evidence of its support for Latino interests.

“Comcast is proud to be the nation’s largest provider of Latino and multicultural television packages, with a distribution platform that delivers more than 60 Latino networks in both Spanish and English,” said Comcast spokeswoman Sena Fitzmaurice. “Hispanic inclusion extends beyond our robust procurement, workforce, and community investment practices.”

Latinos are a leading demographic when it comes to media and technology. Hispanics are far more likely than non-Hispanics to own a smartphone (by a margin of nearly 10 percentage points) and spend 68 percent more time watching online video every month, according to Nielsen studies. Hispanics also spend 20 percent more time watching video from a mobile device.

At the same time, Latinos trail the rest of the country in other ways. Although Internet-connected Latinos are significantly more likely to use social media than other Americans, the share of Latinos who have access to broadband at home is the lowest of all ethnicities. With the exception of black Americans, low-income Hispanic children are the least likely to have high-speed Internet at home, contributing to a “homework gap” that makes it harder for disadvantaged kids to keep up in school.

“Comcast is smart in recognizing that not only do those metrics apply, but moving forward, a disproportionate share of their business will come from the Latino community,” said Javier Palomarez, president of the U.S. Hispanic Chamber of Commerce, which supports the Comcast merger. “The growth of their brand depends heavily on Hispanic eyeballs.”

The data will prove tremendously important for Comcast as it aims to grow the broadband side of its business and fend off challenges to the traditional cable bundle. To expand its service, Comcast has sought to make inroads with community organizations and local or city governments. The company partnered with the school superintendent in Miami – which is 64 percent Hispanic – to deploy its broadband program for low-income Americans, known as Comcast Internet Essentials.

Opponents say Comcast has showered favors on Latino communities and organizations to win their political support in Washington. Arturo Carmona, the executive president of Presente.org, said his efforts to take down the merger have evolved from fighting Comcast directly to “increasingly fighting the beneficiaries of Comcast” who have been drafted to pressure policymakers to approve the merger.

Palomarez acknowledged that his association has received sponsorships from Comcast, but that the company doesn’t break the top-30 list for funders.

“There are other companies that outspend them 10 to 1,” he said of his organization’s donors. “I believe in what 1/8Comcast3/8 is doing. They’ve been as transparent as a company can be.”

Comcast’s work with diversity groups is connecting many to the Web for the first time, and it’s clear that that has turned some Hispanics into allies. If the merger is approved, however, Comcast’s influence over Hispanics will only grow – for better or for worse.