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FCC Denies Disney Access to Time Warner-AOL Data

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From Bloomberg News

Walt Disney Co. has been barred by U.S. regulators from reviewing sensitive documents filed by America Online Inc. and Time Warner Inc. about their union until assuring it will honor confidentiality agreements.

The Federal Communications Commission said it is investigating Disney’s violation of rules restricting dissemination of private information. A lawyer representing Disney at the FCC sent an e-mail to other company staff Sept. 22 with information gleaned from internal documents submitted by America Online. Disney, which opposes the America Online-Time Warner transaction, waited five days to report its breach.

The FCC has required America Online and Time Warner to file sensitive data, including contracts and business plans, in the review of its proposed $147-billion union. Lawyers for rivals can review those documents after pledging, in writing, to maintain confidentiality. Any breach must be immediately reported to the FCC and the companies.

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“We are concerned by the apparent laxity in procedures used by Disney and its counsel,” FCC Cable Services Bureau Chief Deborah Lathen said in the order Tuesday. She said Disney must describe measures it will adopt to avoid future unauthorized document disclosures. Until then, the entertainment company is unable to see sensitive information in the FCC review.

The Disney lawyer realized his mistake within an hour, and Disney told recipients of the e-mail to disregard the information and delete it from any files, the company told the FCC. Still, before alerting the FCC and America Online to the problem, other Disney lawyers gained access to more confidential data.

America Online sent a letter to FCC staff saying it was “deeply concerned” about the violation and asked that Disney provide additional details.

The FCC told Disney to submit all relevant information by Friday and give America Online a copy of the e-mail that the lawyer sent, along with the names of all recipients of the correspondence.

America Online and Time Warner will have until Oct. 20 to respond to Disney’s filings and then the FCC will decide on sanctions, such as suspending the lawyer’s right to appear before the agency or imposing fines.

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