Comcast-NBCU Outside Counsel Can Ask to See ‘Peer’ Deals in OVD Negotiations, FCC’s Media Bureau Says
Online video distributors (OVDs) who want access to NBCUniversal programming under conditions spelled out in the FCC’s January 2010 order approving Comcast’s takeover of that company will have to provide a copy of their contracts with other ‘peer’ media companies to Comcast’s outside counsel and experts, an order released by the Media Bureau Tuesday said. Comcast had asked the bureau to clarify what was required of OVDs who make use of the condition, known as the “Benchmark” condition to include sharing full, unredacted copies of such agreements with NBCU’s in-house counsel and executives (CD Feb 22 p4). The bureau declined to grant that aspect of Comcast’s requests, but it clarified the condition to make it explicit that OVDs must share their peer agreements with NBCU’s outside counsel (http://xrl.us/bn4twc).
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It’s good the bureau rejected Comcast’s proposed “extreme” approach to disclosure of those agreements, said John Bergmayer, a senior staff attorney at Public Knowledge, which opposed Comcast’s clarification request. “Comcast-NBCU was asking the Bureau to impose a disclosure requirement that would make it very likely that OVDs would simply not take advantage of the benchmarking condition,” he said. “I'm concerned, however, that the compromise position might still limit the effectiveness of the merger conditions by requiring OVDs to turn over information to third parties they may be unable or unwilling to disclose."
But the original “Benchmark” condition implicitly required that OVDs disclose the terms of their programming agreements that form the basis of their claims of entitlement to the benefits of the condition, the bureau found. “OVDs invoking the Benchmark Condition must disclose the relevant peer agreement upon the C-NBCU Programmer’s request,” it said. That ruling went counter to the request of six of the largest TV content companies: Disney, Time Warner, CBS, Viacom, News Corp. and Sony. They and Public Knowledge had argued that such disclosures were better suited to the arbitration process that is used to settle disputes that arise from the condition.
The bureau agreed with those companies that Comcast-NBCU executives and staff attorneys did not need access to those contracts. Allowing that type of access “has the potential to cause competitive harm to both OVDs and peer programmers,” the order said. “Providing the access C-NBCU requests would give C-NBCU Programmer’s personnel access to competitively sensitive information that could provide them with an unfair advantage in the marketplace."
Counsel to Comcast-NBCU who want access to the peer agreements will have to file acknowledgements of confidentiality under the terms of a new protective order with the FCC, the order said. A spokeswoman for Comcast didn’t immediately respond to our query.