FCC halts mega-merger reviews, releases Open Internet order | Media Investment | Business
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Just as it releases details of its Net neutrality order to reclassify broadband as a public utility, the FCC has once again paused its informal 180-day countdown clock for deciding whether or not a pair of pending mega-mergers—Comcast/Time Warner Cable and AT&T/DirecTV—will be approved.

The agency said that given pending court decisions related to disclosures of the pay-TV operators' content distribution arrangements with media companies, it would be prudent to take a pause.

"At this time, we believe it is prudent to pause the informal 180-day transaction clocks, because the commission would be advantaged by knowing the resolution of the pending Petition for Review before the transaction clocks reach the 180-day mark, which both are slated to do by the end of March," the FCC said in the announcement.

This is the third time the FCC has paused indefinitely its review. In October, it was halted because of the same legal impasses--content companies had filed suit to block the ability of regulators and consultants to examine their business relationships with the pay-TV companies. And earlier in that month, the FCC extended the review period for the Comcast megamerger by three weeks.

Third-party media companies have said that they will not allow their confidential carriage fee agreements with the four distributors be made available to the review board. They have filed objections "against every individual who sought to review highly confidential information."

Objecting parties include CBS, Discovery Communications, Scripps, Time Warner Inc, TV One, Twenty First Century Fox, Univision Communications, Viacom and the Walt Disney Company. The court heard oral arguments in the suit on 20 Feb.

Comcast sounded hopeful, however, in its reaction statement.

"We understand the FCC's decision to pause the informal review clock while the court continues to review a procedural matter related to the transaction," said Sena Fitzmaurice, VP of government communications for Comcast. "That case is under expedited review, oral argument occurred in late February, and a decision is expected shortly."

She added, "In the meantime, the FCC appears to be making significant progress in the review of our transaction in order to bring it to a conclusion. The comment cycle is complete, the economists have all weighed in, and the parties have responded to all of the FCC's Requests for Information. We look forward to working with the government to complete the regulatory review process."

Meanwhile, the FCC released its lengthy order on Net neutrality and Title II regulation this week. It has a 60-day period to put the rules into effect, which will prohibit ISPs from favoring or throttling traffic, or from establishing a pay-to-play scheme that requires OTT content providers to pay for the privilege of transmission. It's expected that several lawsuits from major US ISPs will be filed the day they "go live."

"Threats to Internet openness remain today," the FCC said in its order. "The record reflects that broadband providers hold all the tools necessary to deceive consumers, degrade content or disfavor the content that they don't like."

Verizon last year won a lawsuit that defanged the FCC's ability to enforce Net neutrality. And, it has said that it will be among the first to sue this time around.

"The 2010 rules helped to deter such conduct while they were in effect," the FCC said. "But, as Verizon frankly told the court at oral argument, but for the 2010 rules, it would be exploring agreements to charge certain content providers for priority service."

Interestingly, the rules say that interconnection agreements (governing traffic exchange agreements between over-the-top (OTT) players like Netflix and underlying broadband providers like Verizon) and sponsored data programs are subject to case-by-case review rather than the bright-line rules -- suggesting a light hand from the agency on such deals, for now.

The National Cable and Telecommunications Association was quick to lay a pall over the proceedings.

"Today's release of the Open Internet order only confirms our fear that the Commission has gone well beyond creating enforceable open Internet rules, and has instead instituted a regulatory regime change for the Internet that will lead to years of litigation, serious collateral consequences for consumers, and ongoing market uncertainty that will slow America's quest to advance broadband deployment and adoption," NCTA said.

AT&T concurred, but added, "Ultimately, though, we are confident the issue will be resolved by bipartisan action by Congress or a future FCC, or by the courts."

Netflix of course had a different take. "The FCC's order is a step toward ensuring Americans get the Internet access they pay for and content providers like us have recourse from broadband monopolists demanding what the FCC called 'unfair tolls,'" it said.