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The secret FCC proposal holding up the start of the Charter merger review clock

The Federal Communications Commission hasn’t started the informal merger review clock on the Charter deals because of a secret proposal chairman Tom Wheeler is tying to the review process.

It’s so secret that not even the media companies that would be affected knew about it until they spoke to people in the FCC. The only official indication that anything was circulated is a two-line item listed under the FCC’s “items on circulation list.”

Wheeler wants to weaken the legal standard used to determine if certain confidential information given to the commission in the course of a merger review can be shared with third parties. The proposal was circulated to the other four commissioners as part of the standard protective order for the Charter deals (which would start the merger clock).

If Wheeler’s proposal is adopted, it could be déjà vu for the media companies that fought and won a legal challenge  in the D.C. Circuit Court of Appeals against the FCC to keep proprietary programming agreements confidential from third parties during the review of the AT&T-DirecTV and Comcast-Time Warner Cable deals. While the case was pending, the FCC paused the merger shot clocks for both deals.

The FCC “wants to make it easier for the agency to disclose proprietary information without telling anybody. It’s a substantial change in how the agency does business,” said one broadcast exec.

Media companies including CBS, Scripps Networks Interactive, Time Warner Inc., 21st Century Fox, Viacom, CBS, and Disney, held discussions last week with the staffs of the other four commissioners. In an ex parte filed July 31, the media companies argue that “disclosure of their competitively sensitive information was not necessary to the commission’s evaluate of the proposed transaction,” noting that the FCC had “successfully reviewed two proposed mergers [AT&T-DirecTV and Comcast-Time Warner Cable]…without disclosing such information.”

If the FCC wants to modify its policies and procedures for protecting confidential information, the FCC should hold a separate proceeding and seek public input, the media companies argued.

The National Association of Broadcasters met with the FCC this week and will be filing an ex parte soon.

GOP commissioners Ajit Pai and Mike O’Rielly hinted at the secret proposal in a statement they issued last week, calling it a “maneuver to deter us from giving careful scrutiny to the important item in front of us, which if adopted, would apply not only to future transactions but all Commission proceedings.”

“The commission should follow the direction that the D.C. Circuit previously provided in a similar case: ‘The agency has access to the relevant documents at issue in this matter and can continue to evaluate the proposed merger….” Pai and O’Rielly said.

The FCC declined comment.