Shot Clock Starts on Charter Deals
It's finally review time. Two and a half months after opening a docket on Charter's proposed acquisitions of Time Warner Cable and Bright House Networks, the FCC has started the informal 180-day shot clock for the review process. At the same time, the Commission has asked for public comments on the proposed deals with a deadline for submission of October 13.
The start of the shot clock follows the release of a protective order by the Federal Communications Commission (FCC) that's designed to protect confidential information that may come under review. While the order sounds like it's in everyone's best interests, however, the whole notion of how protective orders should be used has come under fire recently.
During the evaluation of Comcast Corp. (Nasdaq: CMCSA, CMCSK)'s proposed buyout of Time Warner Cable Inc. (NYSE: TWC), and AT&T Inc. (NYSE: T)'s proposed (and eventually approved) acquisition of DirecTV Group Inc. (NYSE: DTV), the FCC also filed a protective order. It was written to shield information the agency was collecting on specific programming agreements from companies and individuals that might use it for competitive advantage.
Yet the programmers involved didn't believe the order went far enough. They took their case to court, and the US Court of Appeals for the District of Columbia Circuit agreed, saying the FCC's stated logic for requesting the details of programming contracts was confusing and often contradictory.
In the case of Charter Communications Inc. , TWC and Bright House Networks , the FCC has made it clear that the only thing under protective order now is the unredacted application order for the proposed acquisitions. However, the Commission also maintains that its review has only just begun, and that more documents, including details on programming agreements, may be requested and then subjected to the order in the future.
As for the review itself, there are regulatory concerns over whether a new and larger Charter would reduce competition in the broadband and pay-TV markets. But the concerns are more muted than they were during the review of the Comcast-TWC transaction. While the new Charter would have a presence in nine of the top 25 media markets, including New York and Los Angeles, it would still control significantly less of the industry than a larger Comcast would have had the FCC approved its acquisition of Time Warner Cable.
In addition, Charter has offered to meet several voluntary conditions to assuage regulators' fears. Among them, the company has pledged to continue not charging for network interconnections arrangements through the end of 2018. That condition was enough to get Netflix Inc. (Nasdaq: NFLX) on board with the mergers after the streaming company spoke out strongly against Comcast's proposed acquisition of TWC earlier this year. (See FCC Sets Up Review Team for Charter Deals and Netflix Backs Charter-TWC Deal.)
— Mari Silbey, Senior Editor, Cable/Video, Light Reading