Deal Reviews and the Public Interest

Today, in connection with 2 significant and simultaneous merger reviews, the Media Bureau issued an Order establishing unique protections for your Merger Applicants’ programming contracts, retransmission agreements, and other related materials.

This new procedure balances three important public-interest obligations: (i) the Commission’s need for access to highly relevant information about the Applicants’ company practices, (ii) other parties’ have to express informed views to the Commission payment about the transactions, and (iii) the necessity to ensure that sensitive competitive information is used solely for that purpose.

These types of obligations are supported by the legislation, which requires that we decide whether or not a proposed transaction would further the “public interest, convenience plus necessity. ” That analysis is definitely informed by the Applicants’ past span of conduct, which is critical to understanding the impact of a future merger. Equally important is the legal command that this Commission’s decision be based on the public record developed through public notice and an opportunity to comment.

The Commission often obtains delicate commercial information along the way. And it has the long-established method of handling such details. Through a binding Protective Order, 3rd parties can gain access to Highly Private Information only after agreeing to restrictions that are based on years of Commission payment experience. For example , the only people allowed to see Highly Confidential Information are usually outside representatives who personally recognize and commit to abide by these restrictions. The information may be used only in connection with the proceeding in which it is produced, and no one involved in competitive decision-making is definitely eligible to see it. Individuals also should destroy or return the information once the Commission’s proceeding is over.

This process has been used successfully to guard extremely sensitive information, including those of parties not directly involved in a transaction under review. For example , in both the Cingular/AT& T Wireless and AT& T/T-Mobile transactions, the Commission received from third parties detailed subscriber, pricing, and revenue data (including billing records).

Today’s Order recognizes the programmers’ plus broadcasters’ position that the contracts they entered into with the Applicants should not be received by the Commission nor made available to commenters. However , our Order also identifies that such an approach would be a significant departure.

Indeed, the Commission has never refused to receive whole categories of information highly relevant to a pending merger. As CenturyLink explains, “the programmers have cited no before instance, much less an analogous a single, where the Commission has precluded personal parties from reviewing in any way a whole set of information that the Commission has determined is relevant to its review. ”

No decisions on the merits have been made, yet even a casual review of the issues elevated in the pending transactions demonstrates that programming terms are highly related. For example , in the context of the Comcast transaction, BBC America has described that “[u]nderstanding it programming marketplace and the concessions produced by programmers to gain carriage are essential to” the Commission’s work. Similarly, DISH’s submission cites a series of comments that have raised concerns about programming expenses.

The Commission meticulously balances relevance and risk plus sometimes concludes that certain information is not really necessary to its merger review. Yet that conclusion is not appropriate here, because remaining ignorant of Applicants’ contract terms would disable the Commission from effectuating its statutory responsibility.

However , the programmers and the broadcasters make a significant point that speaks to the bigger public interest in these unusual circumstances. Access to the Applicants’ contracts can 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 from the programming marketplace is greater, plus potentially more troublesome, than if only one were before us.

This is why we are creating a distinctive combination of protections for these programming contracts, retransmission consent agreements and certain related information. Specifically, the Order:

  • Stresses that Highly Confidential Information will be available only to outside representatives that are not involved in “Competitive Decision-Making” (defined as “involving advice about or even participation in the relevant business decisions or the analysis underlying the relevant company decisions of the client in competition with or in a business relationship with all the Submitting Party”). Anyone involved in settlement of programming contracts and retransmission consent agreements is “involved in Competitive Decision-Making” and is ineligible.
  • Demands all outside counsel and consultants seeking access to Highly Confidential Details to re-certify that they are eligible to gain access to Highly Confidential Information by re-executing “Acknowledgements of Confidentiality. ” A listing of those re-certifying will be posted for the Transaction Team web page for each transaction. That posting will start the period intended for filing objections.
  • Allows third celebrations whose Highly Confidential Information will be accessed to object to the Commission payment if they identify ineligible signatories to Acknowledgements (e. g., because the signatories are involved in Competitive Decision-Making).
  • Requires qualification, under penalty of perjury plus subject to 18 U. S. Chemical. §1001 (the criminal false declaration statute), that all materials containing Highly Confidential Information have been destroyed or even returned at the close of the continuing.
  • Prohibits copying or printing from the programming contracts, retransmission agreements, plus certain other information and makes this kind of material only accessible by commenters through a secure electronic link which will record any attempt to copy or even print in violation of the Order.

These procedures do not create a “new normal”. Yet here, for the reasons we have described, the new procedures are the best way to guard the public interest.

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