Comcast Corp. and Time Warner Inc. are calling baseless claims by a public-interest law firm that the two cable companies may have violated Federal Communications Commission disclosure rules in connection with their acquisition of bankrupt Adelphia Communications Corp.
On Monday, Media Access Project, relying on press accounts of FCC chairman Kevin Martin’s March 17 press conference, called for an FCC inquiry into whether Comcast and Time Warner failed to disclose -- as apparently required by FCC ex parte rules -- that they attempted to coordinate the timing of agency action on the merger with FCC officials.
“The suggestions in MAP’s letter are false, and the articles referred to by MAP provide no factual basis or other reason to believe that the [FCC’s] ex parte rules were violated,” Comcast and Time Warner said in a March 21 letter to the FCC. “MAP has acted recklessly in calling for an investigation with such a flimsy factual underpinning.”
MAP is representing some opponents of the $17.6 billion Adelphia transaction, including Free Press and the National Association of Telecommunications Officers and Advisors.
Ex parte -- a Latin term that means "by or for one party” -- refers to the process when FCC officials engage in meetings that fail to include all parties in a dispute. Ex parte rules include certain disclosure requirements, but the filed disclosures are often vague, revealing little about the substance of the meetings.
At his press conference, Martin indicated that because the FCC is evenly split 2-2 between Republicans and Democrats, he has explained to all merger applicants that they can push for FCC review with four commissioners or wait until a fifth vote arrives.
“We work very closely with the parties in trying to be responsive to their concerns in the time frames that then end up having to be important, to end up meeting. Obviously, right now, there are four commissioners, and so you are going to have to reach a consensus and a majority among the commissioners that are here,” Martin told reporters.
Two days earlier, Martin provided Multichannel News with a similar account when asked why the Adelphia merger was still at the FCC after nine months while the Federal Trade Commission approved the deal in February without conditions.
“It’s not unique to any transaction. I’ve said this in the context of all of the transactions since I’ve become chairman,” Martin said. “If you have any insight or preference on when you want us to proceed, let me know. I’ve tried to accommodate the interests of all of the companies that have come to me with any requests.”
Asked if Comcast and Time Warner wanted to wait for the fifth commissioner, Martin said that was a question for the companies, not him. “You’ll have to ask them their insights as to what they would end up wanting to do,” he added.
The Senate Commerce Committee confirmed Robert McDowell, a Republican, to fill the FCC's fifth seat, but McDowell is awaiting a full Senate vote.
In their letter to the FCC, Comcast and Time Warner said, “Aside from the desire to coordinate the [FCC’s] consideration of the applications with the bankruptcy process, [we] have not to date expressed a preference for a date by which [we] hope the proceeding will be resolved. Nor have [we] asked the [FCC] to defer action on the transactions.” Counsel for Adelphia also signed the FCC letter.
At the press conference, Martin said he was not addressing the merits of the Adelphia transaction. But MAP apparently concluded from Martin's remarks that Comcast and Time Warner had negotiated timing issues with Martin without public disclosure.
In its request for an inquiry, MAP attorneys wrote that groups with limited resources rely on ex parte filings to know when companies and their representatives have engaged in private meetings with FCC officials and the topics discussed.
“The ex parte rules are vitally important to maintain public confidence in the integrity of the [FCC’s] processes,” MAP said in the letter.
