By Shalini Ramachandran
Comcast Corp.'s proposed $45 billion merger with Time Warner
Cable Inc. has run into another delay, this time due to the failure
of Time Warner Cable to produce necessary documents to the Federal
Communications Commission in a timely manner.
In a Monday letter to the merging parties, FCC Media Bureau
Chief William Lake said Time Warner Cable improperly withheld more
than 7,000 documents "based on an inappropriate claim of
attorney-client privilege, " something that came to the FCC's
attention this month. And last week, the FCC learned that TWC
failed to send more than 31,000 documents to the commission due to
a "vendor error."
Mr. Lake said Time Warner Cable had initially advised the FCC it
would produce the documents by Dec. 30, but after the FCC expressed
concern about the delays, the cable operator said it would produce
all the items by Dec. 22.
The result of the late disclosures is that the FCC's review of
the Comcast-TWC merger, and Comcast's side deal with Charter
Communications Inc., has been delayed, Mr. Lake said. Parts of the
review that were complete now "must be reopened" to weigh the
evidence in the additional documents. "The magnitude of errors,
with respect to both the document production and the privilege log,
is material and the delays in rectifying them were substantial,"
Mr. Lake said.
"We already have provided the FCC more than five million pages
of documents and we will continue to provide the FCC everything
that they need to review this transaction," Time Warner Cable
said.
The FCC said it is stopping its informal, 180-day shot clock for
reviewing the deal until Jan. 12 to verify that the requested items
have all arrived. The delay sets the merger review process back
another three weeks. Already, the process was delayed by two months
due to an unrelated standoff between the FCC and major TV channel
owners over the confidentiality of their contracts with the cable
operators. That matter is being litigated in a federal appellate
court in D.C.
In a statement, Comcast said it is "confident" that any
outstanding items from Time Warner Cable will be sent to the FCC
"in an expedited manner." The cable company said it still expects
for the transaction review to be concluded in early 2015. Reply
comments from the merging parties and other public commenters are
due Dec. 23.
It isn't uncommon for the FCC to pause its shot clock during a
big merger review. During its review of Comcast's deal to acquire
control of NBCUniversal in 2010, the FCC also paused its review
timeline due to deficiencies in the companies' responses to
information requests.
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