Court Bars FCC From Disclosing How Much Comcast, DirecTV Pay Broadcasters

Last week’s last-minute legal battle between just about every major TV broadcaster and the FCC came to a quietly disappointing conclusion this morning, with a federal appeals court refusing to allow the government to share confidential details about the mergers of Comcast and Time Warner Cable, and DirecTV and AT&T.

For those coming to this story late, here’s the “previously on…” version:

The FCC is currently scrutinizing these two mergers and had decided to make confidential information — most importantly, the contracts that the pay-TV companies have with TV networks — available for private viewing by lawyers for parties with a direct interest in the deals.

The broadcasters asked the FCC to please rethink its position, arguing that this data is highly confidential and could damage their businesses.

A slim majority at the FCC said no, arguing that the disclosures “will aid the Commission in the expeditious resolution of these proceedings.”

And so the broadcasters — CBS, Disney, Fox, Time Warner, Viacom, Univision — asked a federal appeals court in D.C. to issue a stay preventing the FCC from going through with its plan. The court agreed last Friday, but gave the FCC the chance to make its case before ultimately deciding on whether to make the stay permanent pending judicial review.

Thus, on Monday the FCC filed its response [PDF], arguing that the broadcasters had failed to show that they would be likely to prevail in court on the merits of its claim.

The Commission points out that the networks are not challenging that this information is relevant to the merger review process or that the FCC should have access to it. They just want to block participating third parties from seeing it.

“Given the need for access, Petitioners’ challenges to the protective orders are doomed to failure,” writes the FCC.

One major concern by the broadcasters is that the confidential information would be shared with people beyond the scope of the FCC order, but the Commission claims that its directives “contain multiple safeguards against unwarranted disclosure” and that the broadcasters’ “fears are without any basis.”

The networks offered to provide anonymized documents that would omit the most sensitive data, but the FCC says it determined that this would result in too many redactions and would be “unrealistic and inappropriate.”

Finally, the FCC tried to make the claim that the broadcasters had failed to show that they would suffer irreparable harm by revealing this confidential information to select individuals under controlled conditions. If anything argued the response, a stay would harm consumers and slow the review process.

“Staying the order pending appeal will materially disrupt the current schedule for the Commission’s expeditious review and resolution of the proposed mergers,” concludes the response, “and by itself, could impact the outcome of these applications. Delay would inevitably prolong the regulatory uncertainty associated with the applicants’ business plans, and thereby disserve the public interest.”

In the end, the court settled the matter with only a couple of sentences.

“Petitioners have satisfied the requirements for a stay pending court review,” reads the order [PDF]. “The agency has access to the relevant documents at issue in this matter and can continue to evaluate the proposed merger during the stay.”

This last sentence is of significant importance as it means that the FCC is allowed to use the documents for its own investigation without having to wait until the appeals court rules on the case. Had the court kept the Commission from these docs while the appeal was pending, a decision on these mergers may have been delayed.

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