Media companies including CBS Corp. and Walt Disney Co. don’t have to disclose programming agreements with cable television providers as part of the U.S. review of AT&T Inc.’s plan to buy DirecTV.
A federal appeals court in Washington ruled Friday that the Federal Communications Commission can’t let third parties who comment on the deal see the information.
The decision is a setback for the FCC and its examination of the $48.5 billion takeover of the satellite TV provider by AT&T. The commission, which delayed its review pending the court decision, had said critics of the deal should be able to see the information to inform their comments.
The FCC hasn’t done enough to show that the confidential information is necessary to the merger review process, U.S. Circuit Judge David Tatel wrote for a three-judge panel.
Nowhere does the FCC “make the jump from useful or relevant or central to necessary,” Tatel said in his opinion.
The FCC is studying the opinion and considering its options, said Neil Grace, a spokesman for the agency. Michael Balmoris, an AT&T spokesman, declined to comment. Darris Gringeri of DirecTV didn’t immediately respond to a request for comment.
“We are delighted the court sided with broadcast networks” in keeping “highly confidential information from being widely disseminated during merger reviews,” Dennis Wharton, a spokesman for the National Association of Broadcasters, said in an e-mailed statement.
AT&T is the second-biggest U.S. mobile-phone carrier and operator of U-verse, its television and Internet business. With DirecTV, it would gain 38 million video subscribers in the U.S. and Latin America. DirecTV, based in El Segundo, California, is in every state, and Dallas-based AT&T sells U-verse in 21 states.
The FCC voted Nov. 10 to allow interested parties to review the contracts. That same day, media companies sued the regulator to stop the disclosure of those programming agreements with Comcast Corp. and Time Warner Cable Inc., as well as with AT&T and DirecTV. Comcast and Time Warner abandoned their merger on April 24 in the face of stiff regulatory and consumer opposition.
The programmers told the court the FCC decision was “unprecedented” and would reveal confidential information.
“The parties that have most aggressively insisted upon access are competitors of the merger parties, and are involved in active contract negotiations with petitioners,” the programmers argued. They “would undoubtedly obtain a commercial benefit from access” to the information.
The case is CBS v. FCC, 14-1242, U.S. Court of Appeals for the District of Columbia Circuit (Washington).