Confidential Information Rules, Opposition To Reconsider Petition Come Under Fire
Several broadcast, cable and media companies are opposing new FCC rules on the handling of confidential information and subsequent American Cable Association (ACA), Dish Network and Incompas opposition (see 1510260030) to a petition for reconsideration of those rules. That opposition ignores many of the arguments justifying reconsideration and often just parrots the reasoning in the order itself, said CBS, Disney, MPAA, Scripps Networks Interactive, Time Warner, 21st Century Fox, Univision Communications, the U.S. Chamber of Commerce and Viacom in a filing in docket 15-149 posted Monday. The FCC's September order "suffers from significant substantive and procedural errors," and opposition to reconsideration -- like the order itself -- is mistaken when it thinks the Communications Act and Trade Secrets Act allows the agency to make confidential business information broadly available either under a protective order or through the Freedom of Information Act, said Comcast and NBCUniversal in a separate filing posted Monday. The FCC didn't comment.
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Treatment of confidential information has been a major issue in the FCC's review of Charter Communications buying Bright House Networks and Time Warner Cable. The agency began review of that transaction only with the issuance of new protective order rules that were criticized in dissents by commissioners Michael O'Rielly and Ajit Pai (see 1509110055). Under the new rules, participants in the proceedings will be able to review competitively sensitive and confidential information submitted by their competitors.
The CBS and Comcast filings cover similar ground, such as repeating their arguments the order violates the Trade Secrets Act. Using Section 4(j) of the Communications Act as justification for making such a change in FCC rules without notice-and-comment rulemaking proceedings flies in the face of previous court rulings that such an internal housekeeping statute doesn't authorize releasing commercially sensitive information. The U.S. Court of Appeals for the D.C. Circuit's ruling earlier this year on CBS v. FCC was clear that even information deemed important or central isn't enough to justify its disclosure if it's protected by the Trade Secrets Act, CBS said.
The court opinion didn't give the FCC "free rein" to rewrite its confidential information policy but set direction on standards that would be consistent with Trade Secrets Act intent, the CBS group said. Even when such a disclosure is allowed under the Trade Secrets Act, an agency looking to do that disclosure "must still overcome Congress' presumption against such disclosure," Comcast said, pointing to D.C. Circuit decision Qwest v. FCC in 2011. Even as the D.C. Circuit decision in CBS opened the door to the FCC to come up with a confidentiality standard other than "necessity," Comcast said, the court also was clear that "an equivalent, if not greater, justification would be essential to satisfy the goals and requirements of the Secrets Act."
The FCC order also violates the Administrative Procedure Act, said the CBS and Comcast filings. Backers of the order are wrong in their claim the order lines up with past practices of making competitively sensitive information available for third-party review because "not even the Commission has embraced this position," the CBS group said, pointing to numerous reviews of video market acquisitions, such as Comcast/NBCUniversal and EchoStar/DirecTV, done without supplying competitive sensitive information to third parties. And pointing to the public interest as justification for third-party access also flies in the face of D.C. Circuit precedent, CBS said. Even without the injection of sensitive information, the FCC has made decisions in the past "based on its 'careful review' of sensitive information not made available to third parties," CBS said. "It is simply not the law that all interested parties must be afforded access to all information submitted to the Commission in order to participate meaningfully in ... proceedings." CBS pointed to the FCC ruling on ACA and Dish arguments in AT&T/DirecTV even though third parties weren't given access to sensitive information there.
While the D.C. Circuit ruling in CBS said an agency's change from past practice has to come with an analysis showing the past standards are being changed and not just ignored, the FCC in its order "has not just casually ignored but instead attempted to deny that there is a change in agency policies and standards," Comcast said. It sought vacating the order and for the FCC to start a separate rulemaking seeking comment on how it should respond to the court's CBS decision.