Comcast/Time Warner Continue Effort to Stall Release of Time Warner’s New York State Broadband Deployment Plans

The Comcast/Time Warner Cable Petition to the New York PSC for Comcast to acquire Time Warner Cable is devoid of substance regarding plans for broadband service expansion.  See UTILITY PROJECT URGES NY PSC TO DISMISS COMCAST/TIME WARNER MERGER PETITION OR REQUIRE AMENDMENT AND NEW COMMENT PROCESS .  Concerns have been raised about general plans of Comcast to focus in or near major urban areas:”Comcast said it would withdraw from some markets, to become what it described as “an urban clustered cable company”, above all gaining New York and Los Angeles.” Comcast to drop Detroit if FCC approves Time Warner merger,, October 7, 2014.  As noted by one scholar:

Because none of these cable companies faces real competition, they have no incentive to invest in the fiber networks America will need to compete in the modern world. They have no incentive to pass along to consumers the lower prices their scale makes possible.

Susan P. Crawford, FCC is right to worry about Comcast merger, Crains Detroit News, Oct. 9, 2014.

In June 2014 we asked for documents provided to the Department of Public Service by the Petitioners in response to DPS Staff information requests under New York’s Freedom of Information Law, FOIL  The request for records was referred to the Administrative Law Judge (ALJ) presiding over the merger case.  Over the objection of the petitioners, he ruled that many documents were not trade secrets or confidential information whose release would cause substantial competitive injury.  Among the records ruled to be available to the public are the broadband deployment plans.  See ALJ RULES THAT TIME WARNER’S NEW YORK BROADBAND DEPLOYMENT PLANS MUST BE DIVULGED UNDER FOIL, NYUP Update September 4, 2014.

The administrative judge had ruled in his initial decsion:

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.

The petitioners’ appeal objected to release of the broadband plans, and the PSC Secretary remanded the matter to the ALJ Judge to reconsider it in light of a recent lower court decision that applied a new standard for evaluation of trade secrecy claims.   Matter of Verizon New York Inc. v. New York State Public Service Commission et al. (Index No. 6735-13). Previously, a company asserting that information it filed with the Commission, normally public, should not be released because it was a trade secret or confidential commercial information really had to show a likelihood of substantial injury if the information became public.  The court decision said that no injury needs to be shown if what is being disclosed is a trade secret. On remand from the Secretary, on September 16, 2014, the ALJ adhered to his original decision.  On a second appeal to the Secretary by the petitioners,   On October 3, 2014 the Secretary remanded to the ALJ  again, and asked the parties to address several issues.

On the second remand, it was pointed out in our October 21, 2014 comments that the PSC has been following the wrong definition of “trade secret” for years, using the broad Restatement of Torts definition, used for private tort disputes, rather than the narrow definition of trade secret under similar undefined provisions in the FOIA statute upon which FOIL was modeled.

The NY Court of Appeals in a FOIL case borrowed the federal FOIA decisions on the parallel FOIL provisions regarding confidential information and we believe it would also borrow the federal definition again in a trade secret case.

The mistake was without consequence until now because the PSC required a substantial injury in both trade secrets and confidential information, until the Albany County VZ case. If the information was not a trade secret but was just confidential information, then the substantial injury showing must be made.

Verizon filed comments in the case supporting the broad definition of “trade secret” and the lower court ruling that no harm need be shown to prevent disclosure of a trade secret.   Comcast/Time Warner filed several comments urging non release of its broadband deployment plans.  All the papers are posted in the case file for the Comcast/Time Warner Cable petition.

Gerald A. Norlander

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