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Comcast-TWC merger delayed, FCC says 7,000 docs wrongly held back

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Comcast’s plans to swallow its largest rival Time Warner Cable has suffered another setback as the FCC announced Monday it would once again halt its “shot clock,” which is the 180-day time period during which the agency seeks to complete its review of proposed mergers.

In a letter published on Monday, the [company]FCC[/company] said it had to impose the delay upon discovering that Time Warner Cable improperly classified more than 7,000 documents as attorney-client privileged.

The misclassification, which the FCC says it discovered in early December, meant that the agency has not been able to properly review aspects of the proposed merger, which has significant implications for consumers and for both the telecom and entertainment industries.

As the FCC explained, the delay has meant that the agency had to conduct portions of its review process anew:

The effect of these late disclosures has been to slow down the Commission’s review of the Comcast/TWC/Charter transaction, in particular because sections of the review that staff had thought were complete now must be reopened to take account of the additional documents that have been disclosed.

From the letter, it appears that [company]Time Warner Cable[/company] held back the documents in the first place by designating them as attorney-client privileged, which companies can use to withhold documents in a legal or regulatory matter. The privilege can only be invoked in very specific circumstances (typically when a lawyer is providing advice to a client), however, and a company must still put the documents in questions on a list it shows to the other side.

While the process of designating documents as attorney-client privileged can give rise to disputes, it is unusual for such a large number of documents to be misclassified.

The mistake has drawn what appears to be a rebuke by the FCC in its letter (emphasis mine):

While the Commission can understand and accept that minor errors can occur when preparing both documents for production and privilege logs; it expects applicants to promptly correct errors, without prompting, when they occur. Here, however, the magnitude of the errors, with respect to both the document production and the privilege log, is material and the delays in rectifying them were substantial so that the tardy productions have interfered with the Commission’s ability to conduct a prompt and thorough review of the pending applications

The upshot is that the merger review process will be delayed by another three weeks until January 12, 2015, according to the letter.

This delay comes after the FCC stopped the shot clock in November after content companies, including [company]Disney[/company] and [company]Viacom[/company], went to court to prevent disclosing sensitive contracts as part of the merger review process.

When [company]Comcast[/company] announced the proposed merger in February, executives predicted that the deal would go through by the end of the year. The latest delays do not necessarily mean the deal is in trouble, though anti-trust experts generally agree that the longer a merger review draws on, the less likely it is to go through.

Meanwhile, the FCC also said the shot-clock delay does not affect a Tuesday deadline by which parties interested in the merger must submit reply comments.

Here’s Monday’s letter:

FCC Letter Re Shotclock

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6 Responses to “Comcast-TWC merger delayed, FCC says 7,000 docs wrongly held back”

  1. While DISH Network is a biased onlooker, you should read the DISH Network’s FCC filing today in opposition to the Comcast merger. DISH’s points are totally valid. These points cannot just be ignored. The FCC simply cannot approve this merger. It if does, it is completely corrupt. The merger cannot be allowed to happen. It is just no good for America. It is -only- good for Comcast executives and stockholders.

    Every knowledgeable expert has said this merger is totally about high-speed internet service and Comcast cannot be allowed to control and “set the bar” for internet service in America. The combined company would control 54% of internet service in this country. Even far right wing “free market” capitalists have said that the internet is just too vital for Comcast to own it.

  2. Over priced, over commercialized and terrible service, if these two merge I will cancel and use my cell as a internet hub and Netflix along with Hulu, all for under $50 a month.

  3. It is shocking to me that this merger is -still- being considered. The merger is no good for anyone except the executives and stockholders of Comcast. That’s not good enough for something this vital. There are no “conditions,” “concessions,” or “promises” that Comcast can make that would make this pig not stink. Too much power, too much monopoly control, too much ability to absolutely halt technology progress in America, too much content control, too much ability to raise prices and create artificial scarcity. Comcast has shown lousy public service habits, lousy quality of service, lousy concern for customers, lousy, lousy, lousy. I urge you to write, phone, telegram, complain to high heaven to every official you can think of. This thing cannot be allowed to happen.

    • My speed just doubled to 105 Mbps with Comcast. I really don’t understand the basis for these unfounded fears. Despite my fast speeds, the real problem is the net being segmented between providers in America. Countries with faster speeds generally have nationalized backbones. Cheers!