Before the Federal Communications Commission could begin considering whether it should allow Charter Communications (NASDAQ:CHTR) to acquire Time Warner Cable (UNKNOWN:TWC.DL) and Bright House, it needed to create a framework for protecting sensitive business data.

Now that the FCC has voted on the protective orders and associated framework for treating sensitive information from the companies, it has asked all three to provide all sorts of info for the review of the deal. The agency's approval of the measure was itself not without controversy. Of the five voting members of the board, Commissioner Ajit Pai dissented in part and approved in part while Commissioner Michael O'Rielly dissented fully.

O'Rielly made it clear he was not happy with the decision, reported, explaining that he was not comfortable linking the protective order for the deal review with broader issues of how to treat confidential commercial information in other contexts. 

"The majority leverages the need for fair, expedient review of the proposed transaction before us to set new procedures for the treatment of confidential commercial information," he said in a statement.

Despite those objections, the adoption of the measure means the clock has been started once again on the merger, and the FCC has a lot of questions it wants answered.

What is the FCC looking for?
The federal agency detailed its "request" for information in a 58-page document sent to the companies and released on its website. It's a big list that kicks off with: "Produce all documents relating to competition in the provision of each relevant service in each relevant area, including, but not limited to, consumer surveys or studies, market studies, forecasts and surveys." And that's only a preamble before it asks for all other documents that amount to each company being asked to turn over essentially everything. 

Charter CEO Tom Rutledge will lead the combined company. Source: Charter.

Here's just a few of the requests the three companies are required to provide documentation for (in the FCC's words):

  • Sales, market share, number of subscribers, or competitive position of the Company or any of its competitors.
  • The relative strength or weakness of persons providing each relevant service.
  • The extent to which providers of each relevant service compete with each other.
  • Supply and demand conditions, including all documents discussing demand elasticity, the impact of price or fee changes, and customer substitution.
  • Attempts to win customers from other companies and losses of customers to other companies.

In addition to simply fishing for information, the document makes it clear that the federal agency has some specific concerns. Broadcasting & Cable reported:

The FCC wants to drill down on a host of issues, including New Charter's plans for expanding Wi-Fi hotspots, and for boosting Time Warner Cable and Bright House baseline broadband speeds, as well as lots of questions about over-the-top video.

The document also asks Charter (which will become New Charter if the deal goes through) to defend its interconnection practices, including providing paid peering agreements and communications with a number of companies.

In addition to wanting all of this by Oct. 13, the FCC also reserved the right to ask for more information at a later date.

What does all this mean?
When the Charter deals to acquire TWC and Bright House were first announced, it was widely believed that even though the agency had denied Comcast's attempt to buy Time Warner Cable, this deal would be approved. That's certainly possible, even likely, but it's very clear the agency won't simply be rubber-stamping the transaction.

This request for information shows that the FCC intends to do its research, and it suggests that any approval will come with promises and conditions. That may be as simple as making sure New Charter actually agrees to deliver on the promises it has been making.