May 8, 2015 / 3:16 PM / 5 years ago

U.S. appeals court throws out FCC order on programming contracts

WASHINGTON (Reuters) - A U.S. appeals court on Friday threw out the Federal Communications Commission’s order that media companies should disclose their programming contracts with pay-TV providers as part of regulators’ review of pending cable and telecom mergers.

The U.S. Court of Appeals for the District of Columbia Circuit ruled against the FCC, which last year asked various content providers to disclose their contracts with cable and satellite TV companies to help with the reviews of AT&T Inc’s pending acquisition of DirecTV, and Comcast Corp’s now-scuttled takeover of Time Warner Cable Inc .

Writing for the three-judge panel, Judge David Tatel said the order was “substantively and procedurally flawed.” The court found that the FCC failed to show that the information in question was a key element of the review process.

Production companies including CBS Corp, Walt Disney Co and Twenty-First Century Fox Inc had said in court papers that the FCC’s order would cause “irreparable harm.”

The court in November stayed the FCC’s disclosure order, but said the merger proceedings and the FCC review could continue as the regulators already had access to all the materials in question.

The companies’ concerns focused on the likelihood of contractural arrangements becoming publicly available to third parties, including rival TV production companies. As the court noted, the disclosures would affect not just those involved in the merger process, like AT&T, but also companies that cable operators are entering into programming contracts with, such as Disney’s ESPN. ESPN’s competitors could then see its rates before pricing their own products.

An FCC spokesman on Friday said agency officials were studying the ruling and considering the options available to the commission.

The FCC had earlier paused its informal countdown toward the decision on the AT&T-DirecTV merger to wait for the court ruling. Friday’s news may allow the agency to formally restart its merger review, but the timing of that decision was unclear.

The FCC had paused the clock on its merger review at day 170 of the non-binding 180-day deadline to determine whether the deal was in public interest and should go through. AT&T declined to comment.

Comcast dropped its plans to buy its biggest cable rival on April 24 after U.S. regulators signaled strong reservations about the merger that could not be remedied by conditions.

The case is CBS Corp et al vs FCC et al, U.S. Court of Appeals for District of Columbia Circuit, No. 14-1242.

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