The slowly-turning wheel of the approvals process for two big media mergers has temporarily ground to a halt, as the FCC today announced delays in their reviews of both AT&T’s planned acquisition of DirecTV and also the Comcast/Time Warner Cable union. The delays in both proceedings stem from the same core issue: media content companies who don’t want their rivals to learn their secrets.
Content companies, including CBS, Discovery, Disney, Scripps, Time Warner, Viacom, and others, have all objected to filing highly confidential documentation about their carriage contracts, and the negotiations behind them, to the FCC. It’s not that the companies, who generally are not keen on the distributors merging, are afraid of the FCC learning their inner workings. It’s that they’re afraid of rival content companies, and the other cable and satellite programming distribution companies, finding out.
This all hinges on the nitty-gritty of how the FCC reviews plans for a merger. The review process, as planned, runs on a 180-day time clock. The clock isn’t binding — there’s no rule that you MUST issue a certain kind of statement by day 97, for example — but it is the framework the FCC uses to keep merger reviews on track.
The clock starts when the companies involved file their formal application with the FCC. After that, the commission sets a pleading cycle: that’s the starter set of deadlines for filing documentation, comments, replies to comments, objections, and so on.
Pausing the merger time clock for a while is not at all uncommon when the FCC reviews big transactions. The Comcast-NBCU merger, for example, had two stops: one for 17 days, and one for 24. Sometimes it just takes more than 30 days to obtain, study, and understand the amount of information at hand.
Once that clock gets ticking, all kinds of information comes into the FCC. With mergers as broad as Comcast/TWC and AT&T/DirecTV, there are a ridiculous number of stakeholders: TV content companies, competing programming distributors, competing ISPs, consumer advocates, internet content companies… the list goes on.
A lot of the information those organizations submit is confidential, and some is categorized as Highly Confidential. The more confidential an item is, obviously, the fewer people can see it. Different groups and people have access to different levels of confidentiality.
Any of us, for example, can view the fully public documents online, but even some of those publicly-viewable documents have confidential sections redacted.
But then there are the super-secret bits of information. Many of them are non-public for very good reasons, particularly when you’re talking about publicly traded companies or trade secrets. To restrict access to those, the FCC issues a Joint Protective Order and requires all relevant parties to sign a document called an Acknowledgement of Confidentiality. These are pretty straightforward agreements not to blab about the Confidential and Highly Confidential (actual legal categories) information that comes up in the proceeding.
The content companies’ objection to the FCC procedure is basically that too many people have signed those agreements and will have access to the documentation on demand. If Channel A, Channel B, and Channel C all have to submit copies of their contracts with Comcast or DirecTV, the logic goes, that means that through the FCC process, Channel A would be able to gain access to the contracts that Channels B and C have signed, and so on down the whole chain of competitors.
The FCC, which kind of really needs access to information in order to do its job, issued issued a modified version of the joint protective orders in both dockets (Comcast/TWC and AT&T/DirecTV) on October 7. The modified order required everyone to sign new acknowledgements of confidentiality and repeatedly clarified that anyone with access to the highly confidential information is formally forbidden to use it in any “competitive decision-making.”
Legally speaking, even if Channel B does find out that Channel A is getting $0.20 more per viewer for a similar network than they are, for example, Channel B forbidden to take that factlet with them to the table when they sit down to negotiate their own carriage rates. Or, likewise, if AT&T and DirecTV find out that Channel A is getting less money from Comcast than from Time Warner Cable, or that DirecTV is paying the most, they aren’t allowed to use that information in negotiations either. That’s the theory, anyway.
So after October 7, a whole new wave of Acknowledgements of Confidentiality came flowing in to the FCC, as ordered. Content companies then filed objections to them. All of them. Between October 15 and October 20, the FCC says, the various content companies filed objections against every single individual who sought access to Highly Confidential Information under the modified joint protective orders.
Some of the content companies’ objections were specific. In others, however, they “provided specific objections to none of the individuals, but stated that their objections ‘rest on their longstanding objection to permitting any individual to access their highly confidential carriage agreements.'”
In response to content companies objections, other folks filed a request for a deadline extension on the process. That request basically said that since the content companies won’t produce documentation as asked, nobody can fairly review and either agree with or rebut it within the provided window.
The FCC concurred, saying, “We agree with these commenters that their current inability to review Highly Confidential Information that has been submitted in these dockets significantly hampers their ability to meaningfully comment and participate in these proceedings, in both Docket 14-57 [Comcast] and Docket 14-90 [AT&T]. Accordingly, we are suspending the pleading cycles and stopping our 180-day informal time clock in both dockets.”
The FCC will decide on new dates in the pleading cycles and restart the countdown clocks after they’ve finished sorting out the current stalemate.
by Kate Cox via Consumerist
No comments:
Post a Comment