NAB Seeks To Keep Retrans Contracts Private

The NAB has joined some major media companies in asking a federal appeals court to keep secret the terms of third-party contracts (including retrans details) involved in two media mergers — Comcast’s $45 billion bid to buy Time Warner Cable and AT&T’s $48 billion plan to buy DirecTV.

NAB’s filing with the U.S. Court of Appeals for the District of Columbia Circuit says the FCC’s order requesting documents “is a surprising and dramatic departure from long-established commission precedent. It paves the way for access by more than 300 third parties to innumerable highly confidential broadcaster distribution agreements and related negotiation strategies.”

The group continued: “NAB stresses that we are concerned only with third-party access to sensitive broadcaster documents and related materials and that the requested stay will not delay or prevent FCC access to the documents at issue.

The information that the FCC is poised to share with outside parties is core to the business interests of NAB’s members. The information is wide-ranging — including programming contracts and documents reflecting the strategies of those negotiating the agreements — and highly sensitive.

“Moreover, given that the mergers under review involve four of the largest pay television providers, access to this information would give any third party a window into business dealings across the entire broadcast television industry that he or she could not gain in any other setting. Thus, there can be little dispute that our members’ competitors and distributors stand to benefit commercially from access to these materials.

“It is important to remember that the four MVPDs involved in these negotiations provide service in almost every television market in the United States. Thus, the documents will reveal not only the prices almost every retransmission consent television station charges for transmission of its signal; but also other proprietary information concerning their agreements, such as provisions involving carriage of multicast programming streams, requirements to transmit programs in high definition, provisions relating to transmission of and payment for a station’s signal out of its market, permission for the MVPD to offer some of a station’s programming on a video-on-demand basis, how payments for service provided to multiple unit dwellings are calculated, and whether an MVPD can allow subscribers to see a station’s program on non-television devices such as tablets in or out of subscribers’ homes.”

Making this information public, NAB said, would cause broadcasters “irreparable” harm. “Any distributor that gains access to the terms of and strategies underlying the negotiation of broadcasters’ agreements with large companies that distribute content across the country would have an unfair advantage in their own contract negotiations with broadcasters. Similarly, other programmers that access this broad set of materials would be able to determine how to price or market their content strategically, harming the interests of NAB’s members.”

NAB continued: “The broadcasters who negotiated these hundreds of agreements at issue did so with the understanding that they contained specific confidentiality provisions protecting the terms of their agreements. And prior to the order, the FCC has honored that confidentiality, and not needlessly brought in countless confidential documents from third parties that may never form the basis for the commission’s final merger decisions.

“Now, the FCC intends effectively to vitiate the confidentiality clauses in these retransmission agreements, substantially affecting the bargain that broadcasters thought they made when negotiating with the four MVPDs.”

The trade group concluded the filing by saying: “Given the serious issues presented and the immediate and irreparable harm that will befall NAB’s members, this court should stay the effect of the FCC’s order while it carefully evaluates whether the FCC’s disclosure order violates the Trade Secrets Act and the Administrative Procedure Act.”

American Cable Association President-CEO Matthew M. Polka issued a statement saying that the court should not deny third parties from reviewing programming contracts submitted to the FCC as part of its review of the two cable mergers.

“ACA’s view is that third-party access to these retransmission consent and cable programming agreements is essential in order to inform the FCC on whether the Comcast-Time Warner Cable-Charter and the AT&T-DirecTV transactions will serve the public interest or harm consumers in ways that require corrective regulatory conditions.

“The cable and broadcast programmers’ claim that they are likely to prevail on the merits of their case or suffer irreparable harm is unsupported. The FCC has permitted representatives of video distributors participating in previous merger reviews to have access to the video programming distribution agreements under protective orders. “The programmers fail to make the case why the protective orders adopted for the current merger reviews suddenly would be dangerous and impermissible. Moreover, because the programmers have failed to present a shred of evidence that anyone allowed to review the contracts is likely to violate non-disclosure commitments required by the FCC, the likelihood of irreparable harm has not been demonstrated.

“ACA, like the FCC, insists that the public’s right to participate in a license transfer or assignment proceeding is an integral and valuable part of any FCC review. If the court were to allow the programmers to make categories of important data and information off-limits to interested parties, it would significantly curtail the utility of public participation in the FCC’s current proceedings and undermine public confidence in the government’s merger review process.”