Emergency Stay of FCC Release of VPCI Seen Likely
A court-ordered emergency stay preventing the FCC from releasing confidential programming and retransmission consent contract information to participants in the AT&T/DirecTV and Comcast/Time Warner transaction proceedings is likely to be granted by Monday, several communications attorneys involved in the proceedings told us. In an order issued Nov. 10 rejecting two applications for review and two emergency stay requests (see 1411070048) from a group of content companies that includes 21st Century Fox, CBS, Viacom and Disney, the FCC established Monday, Nov. 17 as the day it would release the video programming confidential information (VPCI) to outside counsel who have filed for confidential access.
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That order was rushed out to a 3-2 vote by commissioners who were given no advance warning and only a few hours to vote, according to a dissent by Commissioner Ajit Pai. Commissioner Mike O'Rielly also dissented, according to the order. Several attorneys told us there were enough of what Pai called “procedural shenanigans” surrounding the proceeding that the court will likely order a stay to prevent from being rushed into a decision.
Though the content companies already filed an emergency stay request with the U.S. Court of Appeals for the D.C. Circuit Monday, that request was focused on the two applications for review filed with the FCC last week, and the commission’s subsequent denial of those applications late that day rendered that filing moot, said a programming attorney. The content companies are expected to withdraw their previous request and file a new one Thursday or Friday asking the court to block the Nov. 17 release of VPCI, content company officials said. The FCC delayed its original plan to release the VPCI Wednesday to allow the content companies time to file for judicial review, according to the order denying the applications for review.
That weeklong extension may have been intended to avert a stay and continued slowdown of the transaction proceedings, said industry attorneys. When the content companies filed with the D.C. Circuit Monday, the court would have had only two days, one of them a federal holiday, to rule on whether to grant a stay. That short timescale, with the prospect of doing “irreparable harm” to the content companies, would have made grant of a stay very likely, content and cable attorneys told us. The FCC's quick steps to reject the applications for review and push back the date for VPCI to be released took place just hours after the content companies filed with the court, according to content company officials and Pai's dissent. The FCC order is likely a reaction to the content filing, programming and cable attorneys said.
If it was intended to make the court not feel rushed in considering whether to issue a stay, the extension of the VPCI release date is not likely to succeed, said communications attorneys. The complicated issues involved and unusual series of orders and commission votes combined with the finality of releasing confidential documents is likely to lead to at least a temporary stay, said the lawyers. Whether the content companies can have the FCC's actions overturned on the merits is a more open question, the attorneys said.
Along with the rush to vote on the denial of the applications for review, Pai echoed the content companies in condemning the Media Bureau's alteration of the confidentiality rules to allow objected-to parties access to VPCI after the bureau rejects the objections, without waiting for the FCC or courts to weigh in. ”I strongly disagree with the Bureau’s decision to permit third parties to access highly confidential documents while any objections to such access remain pending at the Commission or in court,” Pai said. “Once a party has accessed confidential information, the cat cannot be put back in the bag.” O'Rielly's dissent didn't attack the procedures in the order, but he objected to the bureau's reconsideration order releasing documents before judicial review.
The FCC has pointed to the need for a thorough review process for the two large transactions, and that puts them "between a rock and a hard place” on the content companies' complaints, said Georgetown University Institute for Public Representation Senior Counselor Andrew Schwartzman. If the FCC does the review without allowing access to all the data, it opens itself up for a court appeal of its transaction decisions, Schwartzman said. The content companies and Pai have argued no such disclosures were required in previous transactions, such as Comcast/NBCUniversal. The FCC has processed many deals “without supplying the contracts to any and all signatories of the protective orders,” Pai said.
Along with moving the deadline for release of VPCI to Nov. 17, the FCC also delayed its expected restart of the 180-day shot clock until that day, an FCC spokesman told us. The commission issued the third version of its protective orders for the merger proceedings Wednesday. Amended by the same order in which the commission denied the applications for review, the protective orders now prevent authorized outside counsel from viewing sensitive information remotely. Still outstanding in the confidentiality dispute are several objections filed by the content companies that cited specific reasons for keeping the documents from specific individuals.