Media Bureau Rejects Most Programmer Objections In Merger Reviews; Will Restart Shot Clock Next Week
The FCC Media Bureau rejected most objections by content companies against lawyers looking at their confidential documents and will start the shot clock for AT&T's planned buy of DirecTV and Comcast/Time Warner Cable in five days, the Media Bureau said in several orders (here, here, here and here). The shot clock will turn back on Wednesday Nov. 12, a bureau spokeswoman told us. The bureau will also issue a public notice announcing new pleading cycles for the deals, the orders said. The orders rejected objections against 245 people being allowed to view confidential contract documents that had been filed by a group of content companies that include Disney, Viacom and 21st Century Fox (see 1410170055).
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The bureau slightly modified protective orders for the documents, and issued an order on reconsideration that largely rejects all the arguments made by the content companies to keep their documents from being seen by industry participants in the deals' review. Extra procedures to protect the contract data beyond the methods already outlined in the protective orders are “unnecessary” and “unworkable given the Commission’s mandate to address transactions transparently and expeditiously,” the bureau said. The content companies didn’t comment.
Some 235 of the 245 objections dismissed by the bureau were rejected for not being specific enough, the order said. “The objections fail to provide any basis upon which the Acknowledgments could be rejected.” By rejecting the objections, the bureau acknowledged the objections were being used as a collateral attack on the confidentiality policy, a cable attorney who was among those objected to told us. Ten more of the objections, mainly against attorneys for public interest groups like Free Press, were rejected for not complying with the rules of the protective order, said the bureau. The content companies argued that attorneys like Free Press Policy Counsel Lauren Wilson aren’t outside counsel as specified in the protective order. Those orders define any attorney representing a non-commercial entity in the proceeding as outside counsel, the bureau said. It's expected to rule separately on the remaining objections, attorneys said.
The orders show virtually no concession to the content companies’ concerns, said a programming industry official. The content companies had seconded a suggestion by Cogent that the bureau divide the confidential information into a series of tiers, separating contract information from less sensitive information, but the bureau didn’t do so. The only change made to the confidentiality orders in the proceeding was to clarify that those whose acknowledgements of confidentiality are objected to will not have access to confidential documents until five days after the objection is resolved in their favor, said the order on recon.
With their arguments rejected, the next move for the content companies is unclear, said lawyers involved in the proceeding. The orders don't address an application for review of the merger confidentiality orders and a request for an emergency stay filed by the content companies, meaning they're still on the table, said the lawyers. The orders do address many of the arguments raised by the content companies’ filings. That suggests the responses to the content filings are “pre-baked” and unlikely to change, said a programming official.
The full commission could still rule on the application for review and overturn the confidentiality order, but the FCC’s recent lack of concession to the programmers suggests that’s unlikely to happen, said industry attorneys. If the FCC doesn’t rule on the application for review, it could impair the content company’s ability to appeal the matter in the U.S. Court of Appeals for the D.C. Circuit, since there wouldn’t be a final decision from the commission to challenge, said a programming official.
Comcast didn’t comment on the commission’s response to the content companies, but other companies affected by the objections said they welcomed being again allowed to examine the many documents filed in the merger proceedings. Since attorneys facing objections couldn’t examine any confidential documents in the deals, the issue has put a stop to merger review efforts for many of those concerned with the transactions, said a lawyer for a company involved in the proceeding. “It’s a fair resolution to the issue,” said Boies Schiller attorney Robert Cooper, who represents Cogent. Though Cogent had never sought access to the sensitive contract information at the heart of the dispute, Cooper said he welcomed the return of access to other documents involved in the proceedings.
The bureau’s responses to the content companies show the FCC is taking issues raised in the merger proceedings very seriously, said a cable attorney. The contracts between AT&T, Charter Communications, which is getting some divested systems in the Comcast/TWC deal, Comcast, DirecTV, TWC and the programmers “provide what is likely the best evidence available to test the validity of allegations as to how incentives and abilities (and thus potential harms and benefits) vary with size, integration, and other characteristics that the transactions would alter,” the order on reconsideration said.