FCC Probes TWC Programming Assets
In a submission heavily redacted for public consumption, Time Warner Cable responded this week to queries from the FCC regarding the Commission's review of its proposed purchase by Charter Communications.
The Federal Communications Commission (FCC) has requested a wide spectrum of information, ranging from a comprehensive list of all of Time Warner Cable Inc. (NYSE: TWC)'s interconnection agreements to data on the availability of the company's TWC Maxx service. However, perhaps the biggest focus of the FCC's information-gathering exercise is on TWC's programming interests.
In a series of numbered request items, the FCC has asked Time Warner Cable to identify all of the programming networks it owns or controls, and to provide specifics on which pay-TV operators and online distributors carry those networks on their service tiers. The Commission has also inquired about details concerning advertising revenues, the amount of inventory dedicated to local ad sales, programming margins, program carriage disputes and much, much more.
Nearly all of the response fields in Time Warner Cable's FCC filing are left blank in the publicly-available version of the document. However, TWC says it has filed two other versions of the response form as well; one listed as Confidential, and the other as Highly Confidential. Those documents "will be made available for inspection pursuant to the terms of the Protective Order," the company says. (See Shot Clock Starts on Charter Deals.)
The spotlight on programming ownership is interesting because it goes beyond the issue of Time Warner Cable's distribution footprint, which was a large factor in the FCC's evaluation of Comcast Corp. (Nasdaq: CMCSA, CMCSK)'s proposed acquisition. As stated by FCC General Counsel Jon Sallet at a recent policy research conference, the Commission believed that, in the case of a merger between Comcast and Time Warner Cable, "the combination of video and broadband distribution assets could increase the merged entity's incentives and abilities to take actions against rivals that would pose a competitive threat to online video entry."
Sallet did not specifically note as a concern in the failed Comcast transactions the fact that the nation's largest cable company also owns NBC Universal . However, the impact of content ownership is clearly a point of emphasis in the FCC's review of Charter Communications Inc. 's bid for TWC.
The programming issue is a known bone of contention with opponents of the Charter/TWC transaction. The National Association of Broadcasters (NAB) in particular has asked the FCC to put a hold on its merger review until the Commission has reformed existing media ownership rules. (See Charter Acquisition Naysayers Have Their Day.)
The FCC hasn't agreed to halt its evaluation. But with the data it's seeking from Time Warner Cable, the Commission has demonstrated that it will take media ownership into account in its review.
— Mari Silbey, Senior Editor, Cable/Video, Light Reading