FCC Puts Review of Comcast-Time Warner, AT&T-DirecTV Deals on Hold

14 Mar 2015 | Author: | No comments yet »

Comcast rips critics of Time Warner Cable deal for ‘warmed over’ claims.

The Federal Communications Commission is putting its review of Comcast Corp.’s deal for Time Warner Cable and AT&T Inc.’s planned acquisition of DirecTV on hold, pending a court decision related to the disclosure of video-programming contracts. In a filing with the FCC late on Wednesday and a blog post on Thursday, Comcast called the group’s allegations, outlined in a white paper on Mar. 2, “warmed-over claims … old (and discredited) aspersions” and a portrayal of the proposed merger that “is simply wrong.” Comcast further characterized the group’s white paper as “a compilation of invective, unsupported and unsupportable economic and legal theories, and a hodgepodge of self-contradictory predictions” that should be ignored by the commission. The FCC is awaiting a court ruling on whether CBS Corp. and other media companies need to divulge programming contracts for the reviews, the agency said in a notice posted on its website.

The FCC briefly stopped its informal 180-day shot clock for deciding the deals in both October and December because of problems getting information it says it needs to review the transactions. The “Stop Mega Comcast” Coalition is comprised of competitors, consumer groups and content providers — including Dish Network, Common Cause and The Blaze — who assert that the proposed Comcast-Time Warner Cable merger runs afoul of antitrust and communications laws. “SMC’s ‘white paper’ is merely yet another example of transaction opponents’ preference to ignore the public interest benefits of the transaction in favor of repackaging their original speculative theories of harm that have already been refuted,” Comcast told the FCC.

We look forward to working with the government to complete the regulatory review process.” The hold-up, according to the FCC, has to do with a pending court decision on about the right to review highly confidential video programming agreements – the deals for retransmission consent with CBS, Disney and others. Major media companies like CBS, the Walt Disney Co. and 21st Century Fox are challenging the FCC’s plans to allow third parties to review programming contracts and other information as part of the merger review. Since the FCC isn’t actually required to make a decision within that 180-day time frame — and has regularly blown past that deadline in the past — the action doesn’t actually mean anything. The coalition’s paper was released in connection with a news conference in which group officials said that net neutrality alone is no solution to the issues raised by the merger. Those third parties would still be bound by a protective order, although media companies say they fear that the information will be used in future rights negotiations.

The FCC wants to make certain confidential information — which would include contracts that Comcast, TWC, and DirecTV have with broadcast and cable TV networks — available for review by attorneys of third parties with a direct interest in these mergers. In both the news conference and the paper, the group cited problems in getting conditions of Comcast’s deal for control of NBCUniversal, complications over potential control of Latino markets and issues concerning concentration and control of the market for set top boxes among its concerns. The FCC in the order Friday said it “would be advantaged by knowing the resolution” before the informal clocks reach the 180-day mark, which they were slated to do by the end of this month. “We understand the FCC’s decision,” Sena Fitzmaurice, a Comcast spokeswoman, said in an e-mailed statement. The FCC already has these documents and is free to review them on their own, but the broadcasters object to the notion of this sensitive data being shared with people outside of the Commission, even if done under high security and strict non-disclosure agreements.

She said the agency “appears to be making significant progress in the review.” The clock in Comcast’s $45.2 billion merger proposed in February 2014 was stopped twice before, for 42 and 21 days. The Commission first rejected a request by media companies — including CBS, Disney, Fox, Time Warner, Viacom, Univision — who then took the matter to a federal appeals court. Comcast on Thursday rejected the charges as old and said it had made a “compelling argument” that the deal would offer consumers benefits including faster Internet connection speeds.

People close to the deals have warned that the lawsuit could trip up the timeline for the completion of the combinations, which have been closely watched in telecom and media circles. The comment cycle is complete, the economists have all weighed in, and the parties have all responded to the FCC’s requests for information.” The Department of Justice also is reviewing the transactions, along with state attorneys general and, in California and New York, the respective public utilities commissions. Then on Feb. 20, the three-judge appeals court panel heard arguments from both sides regarding the necessity of sharing the information with third parties.

The broadcasters claimed that the FCC would normally have taken 20 days to consider such an objection, but in this case the Commission only took five days before deciding in a 3-2 vote to move ahead with sharing the confidential info.

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