FCC GOP Members Hot Over Program Contracts Vote - Broadcasting & Cable

FCC GOP Members Hot Over Program Contracts Vote

Say majority vote to uphold third-party access to contracts was rushed and wrong
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The cat cannot be put back into the bag and the bell cannot be unrung. With those colorful characterizations amidst some tough talk, Republican FCC commissioners Ajit Pai and Michael O'Rielly expressed their disaffection, and registered their official dissent, from the FCC's vote to allow third parties to view commercially sensitive programming contracts provided the FCC as part of its vetting of the Comcast/Time Warner Cable and AT&T/DirecTV merger reviews.

The FCC's Democratic majority voted to allow that third party access, upholding a Media Bureau decision rejecting programmer challenges to the third parties seeking access and to the Media Bureau's modification of its protective order to try and assuage programmers concerns.

The Republicans were not happy with either the product or the process. First, they did not think the contracts should be so widely available to third parties period—they were not, for example, in the Comcast/NBCU merger.

Pai said he objected to the FCC allowing third-party access while any objections remain pending at the FCC or in court.

"Once a party has accessed confidential information, the cat cannot be put back in the bag. The harm is irreparable. A subsequent court ruling that the Commission erred in allowing such access is too little, too late."

Second, he said, he was "unconvinced" that it was necessary, or even appropriate, to give outside parties access to the affiliation and distribution agreements, let alone documents detailing how those agreements were reached.

"Why are these transactions different from any previous transaction," he asked. "I haven’t been given any persuasive explanation for why additional disclosure is necessary here. Rather, to the extent that these proceedings differ from prior ones, the argument for protecting programming contracts is more compelling here, not less."

O'Rielly is similarly unpersuaded. "I am not convinced that access to such materials by outside parties is necessary for consideration of the pending merger transactions, especially given the risks at stake and because the Commission has not disclosed these agreements in the past," said O'Rielly. "I have been told that disclosure is necessary to ensure compliance with the Administrative Procedure Act, which is a dubious reading of the statute and questionable justification..."

Pai also had plenty of bones to pick with the process. He said he was given the item to vote on Monday afternoon and was told he needed to cast his vote that day or documents would be made available to outside parties on Nov. 12—Nov. 11 being a federal holiday—that did not leave much time to review the item, he pointed out.

"These procedural shenanigans are unworthy of this Commission, and I will not countenance them by voting to approve today’s item," he said. "In their Applications for Review, the content companies have raised serious arguments that merit the Commission’s thoughtful consideration. Instead, the Commission swats them away in a cursory two-page order..."

The FCC did delay the third-party viewing until Nov. 17 to give those content companies a chance to seek a court stay, which they did Monday before the full commission vote--based on the previous Media Bureau decision--according to a source.

Content companies argue that the request for the sensitive data, particularly beyond contracts to the memos and e-mails about the process, is unprecedented and unwarranted.

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