ALJ Rules that Time Warner’s New York Broadband Deployment Plans Must be Divulged Under FOIL

Time Warner submitted its New York broadband deployment plans to the PSC staff in response to staff discovery requests in the pending Comcast/Time Warner merger case.  In response to a Freedom of Information law (FOIL) request by the Utility Project’s Director, Comcast and Time Warner argued the plans and many other facts disclosed to staff in discovery should not be divulged under FOIL, claiming they are excludible under statutory FOIL exemptions for trade secrets or commercial information which, if disclosed would, respectively, cause a loss of commercial advantage or competitive injury. See WHAT COMCAST AND TIME WARNER DON’T WANT THE PUBLIC TO KNOW, Utility Project Updates Blog.

In a July 22 ruling Administrative Law Judge David L. Prestemon ruled that the broadband plans and numerous other documents are not exempt from public release, stating:

“DPS-46 is a follow-up to DPS-14, requesting more detailed information concerning the broadband deployment projects described in the former information request.  Exhibit 46 provides that information, showing for each project the franchise area, county, plant mileage built, number of premises passed, and the completion or planned completion date.  Although, less aggregated than the data provided in response to DPS-14, the information still does not identify the location of each project beyond the town level.

“The Companies say that disclosure would cause substantial injury to the competitive position of Time Warner, because the information would give competitors insight into Time Warner’s operations, strategies and future plans, which competitors could use to gain a competitive advantage, particularly since Time Warner does not have reciprocal information about its competitors’ deployments and plans. For example, the Companies contend, competitors could alter their deployment plans to certain locations based on this information to obtain a competitive advantage.

” Once again, the Companies’ support for non-disclosure is entirely general and speculative.  They give no example or explanation of how a competitor might use this information to gain an advantage.  Surely, that should not be a difficult task if the Companies were able to articulate what they would do with comparable information from a competitor if they had it.  As it is, they provide no evidence as to how disclosure could be expected to cause them substantial competitive injury.  Accordingly, the request for exception from disclosure is denied.

Comcast and Time Warner then appealed on August 1, protesting release of certain call center information and the broadband deployment plans, which it had provided as its response to staff discovery request DPS-46, and sought to maintain these as protected secrets or commercial information that cannot be publicly disclosed.

On August 15, the PSC Secretary, who makes final FOIL decisions for the PSC, asked the ALJ to reconsider his July 22 decision that the information should be released in light of a recent court case involving parsing of the standard which applies to “trade secrets” — whose disclosure assumedly would diminish a firm’s competitive advantage,  and “commercial information” — whose disclosure must be credibly demonstrated by the company to cause competitive injury.

In a second ruling on the issue issued September 3, 2014, the ALJ adhered to his decision that the broadband deployment information in Exhibit DPS-46 should be made public, and in the call center responses, stating:

“the appropriate interpretation of POL §87(d)(2) would appear to be that records may be excepted from disclosure under FOIL if they are either (a) secret and provide the owner with a competitive advantage  (trade secrets), or (b) secret and would cause the owner substantial competitive injury if they were disclosed (confidential commercial information). The burden of demonstrating entitlement to an exception on either of these grounds rests with the party requesting the exception. “To meet its burden, the party seeking exemption must present specific, persuasive evidence that disclosure will cause it to suffer a competitive injury; it cannot merely rest on a speculative conclusion that disclosure might potentially cause harm.”  The same standard would apply to a demonstration that information claimed to be a trade secret provides a competitive advantage to the owner.

“**** Substituting the trade secret standard of “competitive advantage” for the confidential commercial information test of “competitive injury” does not change that result. The claims remain non-specific and speculative. Just as there was no clear showing of a connection between disclosure and competitive injury, there remains no clear nexus between non-disclosure and the retention of a competitive advantage.”

The Utility Project faulted the proposed takeover of Time Warner by Comcast for a number of reasons, including the failure adequately to address plans for working toward affordable, universal, high speed broadband.  See UTILITY PROJECT URGES NY PSC TO DISMISS COMCAST/TIME WARNER MERGER PETITION OR REQUIRE AMENDMENT AND NEW COMMENT PROCESSAugust 25, 2014

Time Warner and Comcast have 15 days to appeal the FOIL decision further.

Gerald Norlander

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