FCC Seeks Carriage Contracts in Comcast-TWC, AT&T-DirecTV Merger Reviews

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The FCC says it is establishing “unique protections” to keep sensitive program carriage and retransmission contracts confidential as it reviews the proposed mergers of Comcast with Time Warner Cable and AT&T with DirecTV.

The agency’s request for such information has been met with resistance from cable channels who do business with the companies. Some have expressed fears that FCC protective orders will not ensure the confidentiality of deal terms, negotiating points and “most favored nations obligations.”

But in a blog post on Tuesday, three FCC officials argued that the information could be protected with existing policies as well as some new ones. They include requirements that the information from the contracts available only to outside representatives, such as lawyers, who are not involved in “competitive decision making,” such as those involved in negotiating programming contracts or retransmission agreements. Other provisions prohibit printing or copying, as well as require certification that, at the end of a merger proceeding, the materials will be destroyed.

Those who seek the information already must sign acknowledgements of confidentiality, prohibiting them from releasing such information.

The FCC’s request for such information is evidence of the extent to which they are taking an extensive examination of the mergers’ impacts on the marketplace.

William Lake, the FCC’s media bureau chief; Jon Sallet, general counsel; and Julie Veach, chief of the wireline competition bureau, wrote that access to the contracts “could allow someone to obtain a detailed, industry-wide overview of the current and future programming market. Indeed, because the AT&T and Comcast transactions are pending simultaneously, the ability to capture an understanding of the programming marketplace is greater, and potentially more troublesome, than if only one were before us.”

The Discovery Channel is the largest programmer to go public with its concerns about the merger, expressing concerns that a larger Comcast will gain too much leverage to dictate contract terms. In a filing last month, Comcast dismissed such concerns and accused Discovery of demanding “unwarranted business concessions” as a condition of its non-opposition to the merger.

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