FCC Begins Public Review Of Charter-Time Warner Merger

The FCC on Friday started its informal 180-day shot clock to review the proposed $55 billion merger of Charter Communications and Time Warner Cable. That opens the way for the public to formally file comments about the deal; the first wave is due October 13.

But the key disclosure for insiders — including TV executives — is that the FCC is ready to grapple again with an issue that bedeviled it when it reviewed Comcast’s aborted deal to buy TWC, and AT&T’s acquisition of DirecTV.

The FCC said in those cases that it wanted to let independent experts, including potential critics, review the terms of private programming agreements. The agency said it needed their insights to determine whether a merger might reduce video competition or hurt the public interest. Programmers including CBS, Viacom, and Disney opposed the FCC’s effort and persuaded the U.S. Court of Appeals to stop it from sharing the information.

For now the FCC hasn’t asked Charter, TWC or others for the deal terms, and “there has not yet been any decision whether the Commission will collect such information,” FCC General Counsel Jon Sallet says today in a blog post.

Still, the agency adopted a protective order that would — if the FCC changes its mind — “ensure that any objecting programmers have ample opportunities to protect their interests before any information is made available.” The order (read it here) includes a set of procedures that Sallet says “best balances legitimate confidentiality interests with [the FCC’s] desire to be informed by diverse opinions.” It also addresses the court’s call for the FCC “to clarify its procedures for handling confidential information in Commission transaction reviews.”

The commission’s two GOP members say they’d oppose the gathering and sharing of programming deal terms. The agency showed that its requests were “chimeras,” Commissioner Ajit Pai says in a partial dissent, when the FCC decided to oppose Comcast and approve AT&T’s deal. “Even though the programming contracts were never disclosed, neither the Commission nor staff had any problem reaching a decision regarding the merits of the transactions.”

The new order would “set the stage for disclosing highly confidential programming contracts to parties with whom programmers must negotiate distribution agreements,” which could “inflict a large amount of collateral damage along the way.”

Commissioner Michael O’Rielly called the order “hopelessly naïve,” adding that “the ‘safeguards’ proffered in this Order will be insufficient to provide any real protection.”