Court Stays FCC Merger Contract Decision

Third parties will not get access to merger program contract documents
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Third parties will not gain access to program contracts in the Comcast/Time Warner Cable and AT&T/DirecTV deals, at least not until a federal court reviews the underlying arguments against doing so.

In a one-page decision, the U.S. Court of Appeals for the District of Columbia Friday granted a stay of the FCC's decision to make those documents available to hundreds of outside parties subject to protective orders the FCC said were sufficient to protect that info given the public interest in making them available.

The court said petitioners, which included CBS, Fox, and others, had satisfied the requirements for the stay, which means it concluded they had a good chance of winning and would be harmed absent the stay.

It pointed out the FCC still had access to the documents and could vet them itself.

The companies sought the stay after the FCC's Media Bureau approved modified protective orders and rejected their challenge to making the information available to third parties like public interest groups and competitors. They refiled the stay after a politically divided full commission voted to uphold the Media Bureau.

The parties to the deal had opposed the stay, concerned, and with reason, that it could delay the FCC's vetting of the deals. The FCC itself said that the stay could lead to delay, and even affect the deals themselves.

Companies seeking the stay were CBS, Scripps, Disney, Time Warner, Twenty-First Century Fox, Univision, and Viacom, joined by the National Association of Broadcasters in support. On the other side were the FCC, joined by AT&T, Comcast, Charter, DIRECTV DISH, and Time Warner Cable, which all oppose the stay. 

The court now has to set a briefing schedule, then presumably hold oral argument, then issue a decision, which will take months. In the meantime, the FCC gets to see all those documents, but not third parties.  

Look for the FCC to continue to move forward on its review of the deals, mindful of the parties' need for resolution. It fill have to figure out how best to proceed with the reviews, and when to restart the informal 180-day clock on the mergers. An FCC spokesman had no comment on the court order, which the commission had just received at press time, or on when the clocks would re-start.

"We are pleased that the D.C. Circuit has stayed the Commission's sharply-divided decision to disclose programming agreements to outside parties in the merger proceedings. As the Court noted, the Commission can continue reviewing the relevant documents," said FCC Commissioners Ajit Pai and Michael O'Rielly. Both were critical of the Media Bureau decision on third parties and dissented from the full commission vote to uphold it. "As such, there is no reason why this ruling should delay the Commission’s review of these transactions. In the meantime, we hope that the Commission and programmers will come to the negotiating table and reach a compromise."

Comcast agreed that the FCC should get on with it.

"The stay order deals with a procedural matter that has never had anything to do with the substance of our transaction. As the court stated, the Commission has access to all the documents at issue and can continue its review of the transactions while the stay is in effect."

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