Cable-Industry Document Access Case Could Delay Mergers
Opponents of Comcast’s deal for Time Warner and AT&T’s buyout of DirecTV
were given some access to documents
By Brent Kendall
Wall Street Journal
Feb. 20, 2015 2:04 p.m. ET
http://www.wsj.com/articles/cable-industry-document-access-case-could-delay-mergers-1424459077
WASHINGTON—A federal court case about access to sensitive cable-industry
documents continues to complicate U.S. regulatory reviews of two major
mergers: Comcast Corp. ’s deal for Time Warner Cable and AT&T Inc. ’s
planned acquisition of DirecTV .
A three-judge panel of a U.S. appeals court here voiced concerns Friday
about a decision by the Federal Communications Commission to give
opponents of the mergers limited access to video-programming contracts
between the merging companies and TV-channel owners such as CBS Corp. ,
Walt Disney Co. and Viacom Inc.
Robert Long, a lawyer for the content companies, argued the FCC acted in
a “totally unprecedented” manner in allowing representatives for third
parties like Dish Network Corp. to have access to confidential business
documents, including hundreds of thousands of pages of materials on
pricing and negotiating strategies for dealing with distributors like
Comcast. Disclosure of the material “would be highly damaging,” Mr. Long
said during a nearly hour-long session before the U.S. Court of Appeals
for the District of Columbia Circuit, which has blocked the FCC from
allowing access to the material while the case continues.
David Gossett, a lawyer for the FCC, said the commission has established
strong protections restricting access to the documents to a limited
number of outside lawyers and consultants who work with third parties
challenging the mergers. They will have access to the materials only for
the purposes of providing input during the FCC proceedings and would
face severe sanctions if they disclose or use the information for
competitive business purposes, Mr. Gossett said.
Because the FCC is examining the buying power of distributors like
Comcast in the video-programming market, the documents are critical for
the agency’s review, including enabling third-party challengers to
provide informed input to the government, Mr. Gossett said.
The three-judge panel peppered the FCC’s attorney with questions.
Judge David Tatel said everyone agreed the FCC should get access to the
documents, but he questioned whether the agency followed its own
policies in deciding to allow access to third parties.
Judge Sri Srinivasan suggested that the FCC needs to demonstrate that
the material it wants to show was not only relevant for the merger
reviews but also necessary for the agency to reach a decision on the deals.
Judge Robert Wilkins acknowledged that third parties would be barred
under FCC rules from disclosing confidential information, but he
questioned whether that prohibition would really prevent people from
using the information they learned in the future.
The FCC and the merging parties have warned the video programmers’
objections to document access threatened unacceptable delays in the
merger review process. The judges didn’t signal exactly when they would
rule.
Comcast announced its deal with Time Warner Cable a year ago. AT&T
unveiled its plans to acquire DirecTV in May.
Both the FCC and the Justice Department are reviewing the proposed deals.
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