XM/Sirius: Interoperable Radios Weren’t Required
Sirius Satellite Radio, XM Satellite Radio Ask FCC to Reject Request for Investigation by Consumer Coalition for Competition in Satellite Radio
By John Eggerton -- Broadcasting & Cable, 6/11/2008 9:07:00 AM
Sirius Satellite Radio and XM Satellite Radio, the proposed merger of which has still not been ruled on by the Federal Communications Commission after more than one year -- asked the commission to reject a request by the Consumer Coalition for Competition in Satellite Radio (C3SR) for an FCC investigation into the companies.
The coalition asserted that XM and Sirius failed to produce interoperable radios as the FCC required in granting them the only two satellite licenses. The satellite companies said they were never required to manufacture or distribute such devices.
In a letter to the FCC, lawyers for XM and Sirius argued that the agency never required them to make the radio, only to design it. "The implementing rules and license conditions merely require the licensees to design an interoperable receiver. The commission left the decision to manufacture, import, distribute, deploy, market and sell interoperable radios to the private sector," they said.
XM and Sirius argued that they went even further than the FCC requirements, going so far as to build a prototype. They said they have not taken the "ultimate step" of marketing the radios because it would not make "economic sense." They subsidized the production of the radios and would have no assurance that they could make that money back in subscription fees, which would have been an "onerous commercial burden on two unprofitable companies."
Large portions of the XM/Sirius letter posted by the FCC were blacked out as "highly confidential," which prompted Sen. Sam Brownback (R-Kan.) to ask for an unredacted copy.
Brownback, a member of the Senate Judiciary Committee, wrote committee chairman Patrick Leahy asking him to get the copy. Brownback said the letter raises questions about "possible contradictions" with Sirius CEO Mel Karmazin's testimony to Congress about the merger.
"As Sirius demonstrated in a response filed at the FCC last Friday, there is no contradiction, and Sirius' testimony was completely accurate," Sirius spokesman Patrick Reilly told B&C. "The continuing actions of C3SR, which is funded by the National Association of Broadcasters, is another example of our broadcast competitors' willingness to say and do anything to try to stop this merger -- a merger that provides consumers more choices, lower prices and the first of its kind a la carte channel selection."
NAB disclosed last year that it was providing financial support to C3SR, says NAB spokesman Dennis Wharton., adding that the group also supports Brownback's efforts to get the redacted documents."
This merger, or more precisely the attempt to block it, are a perfect example of how this country's government is controlled by lobbyists and special interest groups. It took less time for Exxon and Mobil to merge than this merger of two harmless satellite radio companies. No one needs satellite radio, yet the multiple hearings and involvement by politicians who have no business worrying about the merger makes it appear as though Satellite radio is the equivalent of air. Yet if two oil companies or drug companies, who's products are literally necessities for most if not all American's wants to merge, well they just let it happen. It's obvious that the NAB is influencing government here. Why? Terresterial radio has a listener base of over 300 million, yet even merged Sirius and XM subscribers number less than 10% of that number. This is just another reason why I have come to be so disappointed in this country and specifically it's government.
Brian Jones - 6/19/2008 4:07:00 PM EDT
Yes, this has gone way too long. I disagree with NAB on their stance. There is way too much competition in multiple new media to declare that their merger would be a monopoly. Both companies are fighting for their lives separate, and both companies will still continue to fight for market share. The common denomonator between all monopoly breakups thoughout history is that they have all been enormous moneymakers that pretty much take money away from everyone else. Hardly a description of Sirius and XM combined. I am not either's subscriber. I have never even listened to either one. But a combined company would be the only hope for a satellite radio existence at all. Divided they will probably fall. Sorry, NAB. They are still broadcasting (and in the truest, original intended meaning of BROADcast) even if they are not in your organization.
Matt Headley - 6/12/2008 10:01:00 PM EDT
Sad,so Sad. The powerful NAB has a lot of loyal politicians that are beholding to them to at least make this merger a drawn out affair if not kill it if possible. Sirius is one of the most widley held stocks for the average person in this country. They have no lobyists who can grab a political ear and add some bucks to thier war chest. Let an industry implode! We can afford it. This country is going thru great growth and jobs are far as the eye can see. Why help a limping new industry turn into something great. Let them eat cake! Mr. Martin, take the bull by the horns and get your fellow commisioners to vote. The longer it festers the more it gets infected. Thumbs Up or Thumbs Down, state your case & get it over!
Neal T. Barkett - 6/11/2008 6:22:00 PM EDT
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