Media Bureau Suspends Pleadings, Shot Clock in AT&T/DirecTV and Comcast/Time Warner Cable Over Confidentiality Dispute
The FCC Media Bureau suspended the pleading schedules for both the AT&T/DirecTV and Comcast/Time Warner Cable deals until it rules on a stream of objections filed by a group of programmers to prevent their contracts with providers from being viewed, said an order issued Wednesday (http://bit.ly/ZO1D80). The order also stops the 180-day shot clock for the AT&T deal. The Comcast shot clock had already been put on hold (see 1410070029). The stoppage is a response to a joint request (see 1410210042) from several commenters on the deal -- including Dish Network -- to extend the reply comment period for Comcast/TWC in part because the programmers -- which include Viacom, Disney, CBS and Scripps -- have filed objections to every request from any party to view confidential documents filed in both transactions. “We agree with these commenters that their current inability to review Highly Confidential Information … significantly hampers their ability to meaningfully comment and participate in these proceedings,” said the order.
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New pleading cycles will be issued in a public notice, but only after the Media Bureau rules on the objections, the order said. The clock pause will be brief and is intended to allow the bureau to specifically address the concerns involved, a Media Bureau spokeswoman told us via email. She didn't comment on the specifics of the process for ruling on the objections, or on the application for review and emergency stay request that were also filed by the content companies against the confidentiality order. Though the details of the objection process haven’t been specified, several attorneys involved in the proceeding told us they expect that most objectees would have the opportunity to file responses arguing that they are outside counsel and unconnected with contract decisions -- a condition of the confidentiality order.
Roughly 200 people have filed acknowledgements of confidentiality in Comcast/TWC, and roughly 100 have filed in AT&T/DirecTV, according to FCC.gov. The filers represent companies such as Dish and Netflix and organizations such as the American Cable Association, as well as the companies actually involved in the mergers, such as TWC or Charter. Though programmers have told us they're filing objections to anyone reading their contract data, only some of the objections target specific individuals. That could provide a way for the FCC to quickly dismiss many of the programmers’ objections, one attorney who was targeted by an objection told us. The confidentiality order requires specific cause for an objection to be shown, which is difficult to do in a non-specific objection, the attorney told us. Other objections could be eliminated for being filed after the three-day deadline companies have to file them after an acknowledgement of confidentiality is submitted, the attorney said. Those factors could minimize the amount of delay the confidentiality dispute creates for the mergers, the attorney said.
The objections form the content companies are “overbroad and prejudicial,” said Cogent Communications in its response (http://bit.ly/1rqJ4wY) to four objections by the content companies filed against its personnel. Part of the problem is the design of the modified confidentiality order, Cogent said. The order treats Highly Confidential Information (HCI) -- the sensitive proprietary documents that are often included in FCC merger proceedings -- the same as it treats Video Programming Confidential Information (VPCI) -- the ultra sensitive contract documents at the root of the programmers’ objections, which haven’t traditionally been part of the record in merger proceedings, Cogent said. The construction of the modified confidentiality order requires companies objecting to someone having access to their VPCI to also object to their having access to HCI, an attorney connected with the proceeding told us. Though Cogent’s outside counsel sought only access to HCI, the programmers’ objections bar them from access to any confidential data. The commission could likely reduce the scale of the problem by modifying the confidentiality order to separate the categories of information, Cogent said.
Both AT&T and Comcast released statements describing the pause in their deals’ proceedings as routine and unrelated to the merits of the deals. “We are confident that the Commission will quickly resolve these issues while continuing its work so that review will be completed in early 2015,” a Comcast spokeswoman told us. However, in an ex parte response (http://bit.ly/1FEnW0z) to the programmers’ request for a stay, Comcast, Charter and TWC said delaying the deal review “would in fact cause significant harm to the Applicants.” The FCC should reject “all the objections already filed by the Content Companies that do not relate to specific individual modified confidentiality order signatories and are not based on a good-faith argument," Comcast said.
The confidentiality order should not be interpreted to require that objections by one company over access to HCI and VPCI can block access to all the HCI and VPCI filed in the transaction, Comcast said. Currently, an objected-to individual can’t access any confidential information connected with either merger, an attorney who has been objected to told us. The blanket objections filed by the content companies are an attempt to grant them “an automatic stay,” Comcast said. A programming official connected with the proceeding told us the content companies did not intend to delay the mergers through their filings.