Court Says Pay TV Programmers Can Keep Contracts Under Wraps, For Now

CBS, Disney, Discovery, Time Warner, Fox, Viacom, Univision and other programmers will have their day in court to block an FCC order that could give outsiders a peek at the terms of their top-secret deals with pay-TV distributors. At issue is whether entities challenging Comcast’s proposed acquisition of Time Warner Cable and AT&T’s purchase of DirecTV should be able to see – under controlled circumstances – the terms of the companies’ network carriage deals. Programmers opposed saying that the information is private and, if opened to others, could weaken their leverage to negotiate future agreements. But the FCC approved a disclosure order this week supporting the conclusion of its Media Bureau that the information “is central to some of the most significant and contested issues pending in these transactions.”

Programmers took the matter to the U.S. Court of Appeals in D.C., which today temporarily stayed the ruling to give it “sufficient opportunity to consider the merits” of the arguments. The FCC has to file a response by midday Monday, and programmers can answer back on Wednesday.

The FCC order would limit the information to what the Media Bureau referred to as “a very restricted category of people” that would not include “any individual who participates in the negotiation of programming contracts.” They would not be able to access the information remotely and would have to agree that it “can be used only for purposes of the proceeding.” When it’s over, they’d have to certify that they had destroyed it “subject to criminal penalties.”

The Media Bureau noted that the programming information provides “what is likely the best evidence available” to determine how the mega-mergers might affect programming and prices.

The FCC’s two Republican members, Ajit Pai and Michael O’Rielly, dissented. The content producers “are not parties to the transactions and their rights cannot and should not be trampled over for some ulterior political goal,” O’Rielly said. “This bell cannot be unrung. To me, this appears to be more of a fishing expedition by interests groups and competitors to obtain market sensitive information.”

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