FCC Files Opposition to Programmers Motion to Stay; NAB Supports Programmers

Content companies requesting a stay to stop the FCC from allowing access to confidential programming contracts in the AT&T/DirecTV and Comcast/Time Warner Cable mergers “have no apparent reason to want the commission’s [merger] review to be expeditious,” said the FCC in an opposition response filed with the U.S. Court of Appeals for the D.C. Circuit Monday. The document’s release has already been stayed to allow for an expedited pleading cycle, but the programmers -- which include Univision, CBS and Viacom -- want the document release halted until the court has had time to rule on a petition for review filed by the content companies last week (see 1411140063). The programmers may fear that the mergers will lead to lower prices for programming, the FCC said in their response to the motion to stay. The American Cable Association, Comcast, TWC and Charter joined Dish, AT&T and DirecTV with filings Monday supporting the planned release of Video Programming Confidential Information (VPCI) and restarting the 180-day shot clocks for both mergers. Meanwhile, NAB filed Monday in support of the content companies, arguing the court should stay the release of VPCI. “The Court should ensure that the issues here are carefully and fully considered.”

Staying the commission’s confidentiality order pending judicial review would “materially disrupt the current schedule” for the FCC’s merger reviews and “by itself, could impact the outcome” of the transactions by “inevitably” prolonging “regulatory uncertainty” about the mergers, the FCC said in its opposition comments. The shot clock for the Comcast/TWC merger is at 85 days and the shot clock for AT&T/DirecTV is at 76 days, the FCC said. “If that schedule were maintained, the Commission’s merger review would be completed in early spring 2015,” the FCC filing said.

The confidentiality orders being challenged by the content companies and NAB as unprecedented have been used before, the FCC said. Examples cited in the commission filing include MCI/Worldcom, Liberty Media’s bid to purchase interest in DirecTV and Comcast and Time Warner’s purchase of Adelphia’s cable systems. The Adelphia deal included the FCC making programming information available under protective orders, the filing said.

The programmers haven’t provided any evidence that the outside counsel authorized to view the VPCI will abuse that privilege, ACA said in its filing. To show irreparable harm, the programmers have to show that the commission’s extensive confidentiality procedures will be breached to demonstrate the likelihood of irreparable harm, the FCC said. “They cannot do so, and their motion offers no factual basis from which this court may conclude that such violations will inevitably occur," the FCC filing said.

The argument that programmers are trying to delay the auction is scuttled by their filings, which specifically argue that the merger reviews can continue while the VPCI matter is under consideration, a content company official told us. NAB makes a similar argument in its own filing, calling the delayed merger shot clocks a “fiction.” “Even when the Commission announces that it has “stopped” its non-binding clock, the FCC staff continues to work diligently on the transaction -- including taking outside meetings and reviewing documents -- as if the stoppage had not occurred,” NAB said. NAB also points to several other transactions that went far beyond the 180 days — including Comcast’s purchase of all of NBCUniversal. The FCC declined to comment.

The 180-day timeline “affords an essential degree of certainty and integrity to the review process,”Comcast, Charter and TWC said in their joint filing. The “frivolous objections” from the content companies have “undermined the integrity of the review process and already caused material undue delay,” the cable companies said.

Though retransmission consent contracts are part of the VPCI at the center of the dispute, NAB has largely been letting the content companies -- which include broadcast interests such as CBS and Univision -- take point on the matter with the FCC, aside from a single ex parte filing in September. That may have been because NAB’s opposition wasn’t perceived to carry much weight at this FCC, one content company official connected with the proceedings told us. NAB’s opposition to the release of VPCI is expected to have a greater impact in the D.C. Circuit, with a judge new to the matter, the content official told us. “Now that it is in court, we thought that we could add value to the programmers’ case, as many of our members will be adversely affected by the FCC’s about-face with respect to bringing information into its record it doesn’t need,” NAB Executive Vice President-Strategic Planning Rick Kaplan said in an email.