FCC Defends Confidential Meetings As Part of Merger Reviews
FCC Chairman Tom Wheeler says that the commission has the legal standing to meet confidentially with potential critics of media mergers, after a report was published stating that companies have privately met with regulators who are reviewing the proposed combinations of Comcast with Time Warner Cable and AT&T with DirecTV.
Wheeler cited a rule in the Administrative Procedure Act that allows “a limited opportunity for entities who seek confidentiality ‘due to fear of possible reprisal or retribution.'” Meetings with the FCC otherwise must be disclosed and be part of the public record.
The Wall Street Journal reported last month that FCC officials were offering anonymity to companies concerned about the impact of the proposed merger. Last week, Sen. Dean Heller (R-Nevada), who has been a critic of FCC procedures, fired off a letter to Wheeler, writing that when orders “that have significant impact on the industry are crafted based on information provided in secret and go unchallenged, I believe it can undermine the effectiveness of that order.”
Wheeler, however, said that FCC cannot render a decision on mergers relying in information gathered in the confidential meetings.
“It could be used, however, to help the commission formulate appropriate questions to applicants or other parties; questions (and subsequent responses) which could be placed on the record,” he wrote. “Alternatively, it could be used as a means of encouraging persons or entities to put their information on the record.”
The next deadline for public comment on the Comcast-TW Cable transaction is Sept. 23, when Comcast is expected to file a lengthy response to criticisms of the deal.
The company’s David L. Cohen also issued a statement on Wheeler’s letter, saying they were “encouraged with the commission’s assurance that any evidence adduced through any private sessions will be made a part of the record so that we and other parties have an opportunity to respond. In short, we are comfortable that the procedures the commission has laid out in its response to Senator Heller will ensure a complete and fair review of all the issues in these transactions.”
Among the media companies that have gone public with their concerns are Discovery Communications, which said that it has “critical issues” with the Comcast-TWC combination, particularly in the leverage that the bigger company will have during carriage negotiations.
The first FCC deadline for comments in the AT&T-DirecTV transaction was on Tuesday. Among those weighing in was the National Assn. of Broadcasters, which said that the FCC should look at the merger’s impact on multichannel concentration and competition. It noted that there were “serious consequences that deserve careful scrutiny,” including the fact that DirecTV competes with AT&T’s U-verse in some markets. It also called for a condition that DirecTV offer local stations in 13 of the 210 markets in which it operates.
The Justice Department also is reviewing both transactions.
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