NAB To Court: FCC Decision On Contracts Is Unsustainable

The National Association of Broadcasters has told a federal court that its retransmission consent deals with MVPDs are among their "most closely guarded secrets" that should not be shared with third parties.

That came in NAB comments filed Monday (Dec. 15) with the U.S. Court of Appeals for the District of Columbia in support of a challenge by CBS and other programmers to the FCC's decision in the Comcast/Time Warner Cable and AT&T/DirecTV merger reviews to make contracts and work product from retrans and other programming deals available to hundreds of third parties.

The court has stayed that FCC decision and Dec. 15 was the deadline for briefs from CBS, the other programmers, and NAB, which was granted leave to intervene in support of the programmer challenge.

The FCC is free to view and vet those contracts (as the court made clear when issuing its stay of the decision to let third parties also vet them).

NAB says that is fine with broadcasters.

"NAB is not arguing that the Commission should not have access to the programming agreements and negotiating materials submitted by the merging MVPDs," the association said, according to a copy of the filing obtained by B&C. "But revealing to other MVPDs or their representatives the terms of agreements and details of negotiations with the merging companies --which collectively negotiate with television stations in almost all of the nation's 210 television markets-- would play havoc with broadcasters' ability to negotiate retransmission consent agreements on anything approaching a competitively level playing field. Notably, those entities supporting the broadest third-party disclosure before the FCC and in this Court are either competing MVPDs or trade associations representing them."

NAB notes the "breathtaking scope" of the documents given the size of the transactions, pointing out the FCC also recognized that could be problematic. "One of the merging parties --DirecTV-- has retransmission consent agreements with television broadcasters in all but a handful of the nation's 210 television markets," said NAB. "Comcast, Time Warner, AT&T and Charter collectively have agreements covering most of the major television markets in the United States [the deal includes system spin-offs to Charter].

NAB suggested its stations are not interested in being part of the transaction --except the NBC stations owned by Comcast-- but that the FCC "has dragged our member stations unwillingly into the current controversy by permitting disclosure of their most confidential information to third parties who would use that information to disadvantage them."

NAB also says that release of the information does not square with the FCC's prior implementation of rules under the Trade Secrets Act that "confidential financial information can only be disclosed after a 'persuasive showing' of the need for disclosure. And under the FCC's long-standing interpretation of that mandate, confidential information should not be disclosed, even under a protective order, 'on the mere chance that it might be helpful.'"

The FCC adopted protective orders for the information that limit third party viewing to outside counsel and no one involved in "competitive decision-making." But NAB said that as a practical matter, nothing prevents outside counsel from using the knowledge gained to advise clients about FCC rulemakings governing programming negotiations or on negotiating strategies. Then there is the possibility that outside counsels become inside counsel, where it would be tough to "unknow" the "detailed, industry-wide" contract information in the documents.

"The Commission failed to give serious consideration to whether this sweeping disclosure was necessary, whether alternatives would meet third parties' needs, or whether the holes in its protective orders would render them nugatory," said NAB. "Under well-established standards, the ruling under review cannot be sustained."

Joining CBS in challenging the FCC decision were Scripps, Disney, Time Warner, Twenty First Century Fox, Univision, and Viacom.

John Eggerton

Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.