Court Vacates FCC Third Party Contract Decision

Hundreds of outside parties will not get access to programming contracts and work products submitted to the Federal Communications Commission as part of its review of the AT&T/DirecTV merger. A three-judge panel of the US Court of Appeals for the DC Circuit has unamimously upheld programmers' challenge to the FCC's decision to do so. "We find the Commission’s action both substantively and procedurally flawed," the court said in vacating the order. "[B]y failing to explain why Video Programing Contract Information (VCPI) is a 'necessary link in a chain of evidence that will resolve an issue before the Commission,' the Commission has failed to overcome its -- and Congress’s -- presumption against disclosure of confidential information.” The court said the issue boiled down to: "May the Commission disclose petitioners’ confidential information to third parties and may it do so on a timeline so swift as to effectively preclude judicial review?" The court concluded that the FCC had not justified why this confidential information needed to be disclosed, and was troubled by the FCC's race to judgment. "We share petitioners’ apprehension about a process that puts tremendous pressure on the Commission, the parties, and this court to get their ducks in a row in a short time."

Regarding the decision, Public Knowledge stated, "It's unfortunate that this decision could put hurdles in the way of outside parties who are trying to make the case against the AT&T/DirecTV or any other merger. In the short term, however, the effect on the AT&T/DirecTV merger is likely to be limited, as the Commission is still fully able to review all relevant programming contracts. The confidential programming information in question, while relevant to the AT&T/DirecTV transaction, was more central to the Comcast/Time Warner Cable transaction, which has been resolved.However, we are worried that this decision contains language that could be interpreted to limit the ability of the public and outside parties to participate meaningfully in the merger review process. It could make it more difficult for outside parties to show that particular confidential information is a 'necessary link in a chain of evidence' before gaining access to it. It is, of course, challenging to make that showing with respect to information one has not yet reviewed, and the FCC's usual practice has reflected that."