Adelstein Flexible on XM-Sirius Conditions

Key swing vote FCC commissioner Deborah Taylor Tate won’t say which way she’s leaning.

By John Eggerton -- Broadcasting & Cable, 7/21/2008 11:29:00 AM

Federal Communications Commission member Jonathan Adelstein said Monday that there is some room for negotiation in the conditions he proposed that he said would allow him to approve the XM Satellite Radio-Sirius Satellite Radio merger.

Meanwhile, a key swing vote, Deborah Taylor Tate, would not comment on which way she was leaning.

Adelstein said Monday at an annual Minority Media & Telecommunications Council conference in Washington, D.C., that his conditions were negotiable: "I am always open to discussion about what the best outcome is, so, it is not fixed in stone. I am certainly open to discussion."

FCC chairman Kevin Martin essentially called out the other commissioners at a press conference, saying that he was willing to see any counterproposal they put on the table.

Martin already signed off on a set of conditions, essentially already agreed to by the companies, which Republican commissioner Robert McDowell also agreed to, according to a source.

That leaves Tate and commissioner Michael Copps, who told B&C Monday that the deal was still a high hurdle even with the conditions suggested by Adelstein. Those include: a six-year price freeze with no programming-cost pass-through; setting aside 25% of the combined company's channel capacity for outside parties, including independent commercial and noncommercial programmers; interoperable receivers; a mandated HD-radio chip (to receive digital terrestrial stations) in subsidized receivers; and outside monitoring of compliance.

Copps -- who joined all of the commissioners but Martin on a panel at the conference -- said he remained where he has always been on the merger: It presents "a really steep climb to demonstrate they are serving the public interest. I can't say I have seen that claim validated so far," although he added that the decision has gone on "long enough."

As for Adelstein's proposal, Copps said that even before you get to that point, you have to look at it as a merger to monopoly, adding, "As you know, I'm not a fan and never have been, of some of the mergers we've done."

Tate is said to want the FCC to resolve issues with XM’s and Sirius’ violations of FCC rules related to their use of transmission equipment. Adelstein agreed. "I think the outstanding enforcement issues should be resolved before we complete the approval of the transaction," he said.

Adelstein said the FCC is in discussions with XM and Sirius. "There were major infractions of FCC rules," he added, but would not say whether he favored fines or a consent decree.