FCC REJECTS ATTEMPTS FOR ACCESS TO AOL ISP AGREEMENT

MAP and others had argued FCC should force AT&T and Comcast to file AOL Internet service provider (ISP) agreement with Commission so agency could determine whether it was relevant to proposed merger. But FCC, in its denial order, for first time disclosed it already had examined documents and determined they were irrelevant to merger. Some staff members reviewed those documents at Justice Dept. and determined they weren’t factor, FCC said. Commissioners, with exception of Copps, agreed.

MAP Pres. Andrew Schwartzman said FCC had given his coalition “a powerful appeal issue” that could complicate AT&T Comcast merger, assuming it was approved. He was particularly irked at disclosure that Comcast and AT&T had asked that Commission review documents at DoJ to determine their relevance before requiring companies to file them at Commission. MAP and others never were told about that action in all of their discussions with FCC staff and commissioners, Schwartzman said. He said there was no citation associated with that statement in order, so he wondered whether it ever was made part of public record in ex parte or other filing at FCC. FCC spokeswoman said that information wouldn’t necessarily fall under ex parte rules. Schwartzman said he thought MAP had much better chance of getting merger overturned in court “at this moment than we had an hour ago.”

In declining to make ISP agreement part of record at FCC, Commission has denied MAP, Earthlink and others opportunity to argue documents’ relevance, Schwartzman said. “Can the FCC blind itself to available facts? Looking at the document and saying it’s not relevant is not the point. Requiring them [the companies] to file it with the FCC, not going and paying it a visit, is what’s important. We look at it and tell them why it’s relevant,” he said. Earthlink Vp- Law & Public Policy David Baker said he found it “regrettable that the Commission has abdicated its public interest responsibility.” If carriage agreement between nation’s largest ISP and what would be largest cable company “isn’t relevant, I don’t know what is,” he said.

FCC was looking at issue in context of AT&T’s stake in complex Time Warner Entertainment (TWE) partnership. AT&T and Comcast proposed trust arrangement for TWE stake until that stake could be sold off. ISP agreement was referenced in that trust, but carriage agreement itself never was made part of FCC’s record. Proposed merger also is being reviewed by Justice and it evidently asked that companies submit ISP agreement. In its order, Commission said Comcast officer told staff AOL ISP agreement “in no way supersedes or contradicts” terms that affect a restructuring of TWE, which was concern of public interest groups. “Moreover, in reviewing the AOL ISP agreement, the staff did not observe any clause that contradicted or amended the TWE restructuring agreement,” order said.

FCC said ISP agreement wasn’t contingent on merger. If merger failed to go through, AOL still would have ostensibly same arrangement, only it would be with AT&T, instead of AT&T Comcast. “The fact that the ISP agreement between AOL and AT&T is identical in all material respects to that between AOL and AT&T Comcast refutes the claim that the AOL ISP agreement evidences the merged entity’s market power,” agency said. FCC also said it hadn’t yet established policies or rules on whether and on what terms unaffiliated ISPs should have access to cable systems. “The very question of whether government intervention is necessary or appropriate to ensure that unaffiliated ISPs have access to cable systems is squarely at issue in an ongoing rulemaking process,” FCC said. Commission dismissed Earthlink’s motion as moot.

Copps, in his dissent, said Commission should have allowed groups opportunity for limited review and comment. “I believe the public interest is served when government actions and processes are conducted, to the maximum extent possible, ‘in the sunshine.'” Comcast didn’t comment.