ACA, RCN pitch court on alternative remedy for AT&T-Time Warner Inc. merger

Gavel court room lawsuit judge
ACA and RCN are asking the federal court overseeing the DOJ's case against AT&T-Time Warner Inc. to consider alternative deal conditions. (Pixabay)

The American Cable Association (ACA) and cable operator RCN have filed an amici curiae brief with the federal court overseeing the Justice Department’s attempt to stop AT&T and Time Warner Cable from merging, pitching the court on “alternative” remedies for allowing the deal to go through. 

"ACA members compete with AT&T and DirecTV, the largest traditional multichannel video programming distributor (MVPD) in the U.S., and purchase video programming from Time Warner, giving these smaller MVPDs a significant stake in the outcome of the case and putting them in an excellent position to understand the harms that would ensue from the transaction and remedies that could offset the harms," ACA President and CEO Matthew Polka said in a statement. "ACA's proposal is an effort to address the flaws and loopholes in AT&T/Time Warner's Unilateral Arbitration/Standstill Offer.”

According to the filing, ACA and RCN essentially side with the DOJ, but the government is asking for all-or-nothing remedies: it wants the court to either block the merger altogether or force AT&T to divest either DirecTV or Turner Networks, a deal breaker for the telecom. 

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ACA and RCN are asking the court to “fix” the AT&T-Time Warner proposal to incorporate provisions included in the approval of Comcast’s acquisition of NBCUniversal in 2011. Deal conditions calling for arbitration in programming disputes “should cover all programming managed or controlled by the post-merger entity,” they said. 

Further, the filing said the court “should permit smaller distributors to use a bargaining agent for arbitration.” It should also entitle smaller distributors to fee shift if they prevail. 

“Smaller distributors should expressly be permitted to use a bargaining agent, such as the NCTC [National Cable Television Cooperative], to invoke arbitration on its members' behalf to address the fact they may be less able to bear the costs of commercial arbitration than larger MVPDs, thus rendering the remedy of less value to them. Those with fewer than one million subscribers (or their agents) should also be permitted to recover fees as prevailing parties in any arbitration with the merged entity,” ACA explained. 

Further, ACA and RCN asked the court to fix “flaws” in the Comcast-NBCU deal conditions. Conditions, they said, should provide distributors with key programming data and information prior to submitting their final offers. The postmerger entity should be prohibited from punishing broadband subscribers of competing pay TV operators, they said. Conditions should also provide for a midterm review and adjustment period. 

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