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"We are concerned by the apparent laxity in procedures used by its counsel that resulted in the disclosure of confidential information."
—the FCC on the Disney leak

FCC KEEPING BLABBERMOUTH DISNEY OUT OF AOL-TW LOOP

Whoever Said "Dead Men Tell No Tales"
Never Met Walt
Can Walt Disney keep a secret? Not according to the Federal Communications Commission.

On Tuesday (10/10), the FCC banned Disney from reviewing confidential materials regarding America Online's bid for Time Warner until security can be established.

While AOL and TW have submitted contracts, business plans and other private documents to the FCC, their competitors have the right to review the information, providing it is kept confidential.

The FCC ban stems from a breach of secrecy on the part of Disney's law firm, Verner, Liipfert, Bernhard, McPherson and Hand. On Sept. 22, one of its lawyers sent an e-mail describing confidential documents to Disney staff lawyers who had not signed secrecy agreements. While the faux pas was detected within an hour, the firm did not reveal the breach until Sept. 27. In the interim, lawyers for Disney had access to more confidential information.

Said the FCC order: "We are concerned by the apparent laxity in procedures used by its counsel that resulted in the disclosure of confidential information."

In its order, the FCC said Disney and its counsel must submit procedures that would guarantee such breaches do not happen, and that the agency would have approval of those steps. It also questioned why it took Disney five days to report the discrepancy and ordered all those who received the e-mail to not disclose its content.

In addition, the FCC ordered Disney to give a copy or detailed description of the e-mail to AOL, reveal who sent the e-mail as well as provide a list of who got the e-mail or data. The company must also provide affidavits pledging confidentiality from those who received the e-mail and permanently delete the documents from Disney's e-mail system.

Disney has until Friday (10/13) to submit the information and affidavits to the FCC and AOL. AOL and Time Warner will have until Oct. 18 to file a response as well as suggest any further remedial action.

Said Verner Liipfert attorney Larry Sidman: "We will obviously cooperate with the FCC. No documents were disseminated, this was a brief e-mail transmission with cursory description of the documents, no sensitive business proprietary information was disclosed."

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