Data Demands Growing in FCC M&A Reviews, FCBA Panelists Say

The FCC -- which once requested far less data and fewer documents than the Justice Department for use in evaluating mergers and acquisitions -- has caught up to and in some cases surpassed DOJ, Arthur Burke of Davis Polk said Tuesday at an FCBA panel on M&As. "Today, it's millions of documents, just like at DOJ -- maybe more," said Burke, who represented Comcast in a variety of antitrust matters, including its failed bid to buy Time Warner Cable. During the pendancy of Comcast/TWC, Comcast at one point had 300 contract lawyers reviewing documents in Falls Church, Virginia, office space, Burke said. "It's an enormous undertaking ... and it has to be done at breakneck speed," he said. "There's no easy way to resolve that."

Hiring economists who can speak with the economists the FCC now often uses in its reviews, as well as comments, petitions and ex parte filings, can carry a type of coded message, said Hank Hultquist, AT&T vice president-federal regulatory: "Hiring well-known, let's say costly, economists, that's a signal there's going to be a more serious battle."

In response to a question about protective order issues, now-retired DirecTV General Counsel Larry Hunter said that company doesn't foresee programmers objecting to making data available, and the delay in AT&T/DirecTV "was a source of constant tension" with executives. Meanwhile, he said, some parties and law firms who sign confidentiality agreements "don't take it as seriously as others."

FCC and DOJ panelists said both agencies will sometimes need very different materials and sometimes similar materials, but at different times. "Not everything the FCC is interested in might be interesting to DOJ," said Hillary Burchuk, who oversaw Comcast/TWC for the FCC. "We have a broader mandate." The DOJ often has more information than the FCC, which "does frustrate communications," said Owen Kendler, who is heading the FCC working team reviewing Charter Communications buying Bright House Networks and Time Warner Cable. Third-party comments need to be backed by data, said Jamillia Ferris, who while with the FCC led the review of the AT&T purchase of DirecTV and now is with Wilson Sonsini. "They're most likely to influence the process if they're backed by data ... more than just general statements," she said.

The 180-day shot clock "helps as an abstract idea," but it also creates a deadline expectation that often can't be met in larger deals, as well as leads to some consternation when the clock is stopped, Hultquist said.

Since the FCC has taken heat in the past on transactions where parties were later accused of not living up to their commitments, such as in AT&T/BellSouth, a compliance officer condition might be a way the agency could ensure compliance and safeguard itself against such complaints, Hultquist said. Such compliance monitors aren't uncommon in antitrust cases, Burke said. While the FCC and DOJ often will put different conditions on a deal, that doesn't necessarily reflect disagreement between the agencies, said Jared Hughes, a DOJ antitrust attorney.