Stilllll going! Just when you thought we had reached a lull in the meetings at the Federal Communications Commission, along comes American Public Media to keep the fire burning.

Rick Chessen, Senior Legal Advisor to Commissioner Copps, and representatives for American Public Media met on Monday to discuss a letter (PDF) it sent to the FCC last week. Yes, that's right, a letter sent late last week deserves a meeting.

The non-profit organization reiterated its letter (you think?) urging the FCC to require that Sirius Satellite Radio Inc. and XM Satellite Radio Holdings Inc. hand over 20% of its combined spectrum for "for non-commercial educational use."

[View Filing (PDF)]

Attorneys General from Maryland, Connecticut, Ohio and Washington - who all greatly oppose the Sirius-XM merger - feel they have found the answer to preserving competition in satellite radio: offer it for free.

This revelation was uncovered in a recent letter (PDF) to FCC Chairman Kevin Martin, where the state Attorneys General suggest that the Federal Communications Commission lease a portion of Sirius and XM's bandwidth to a 3rd party. And that leased portion, should be made available, for free.

Does this plan sound familiar?

Radio & Records nicely sums it up for us, "the only entity that has made a pitch to lease satellite spectrum from a combined Sirius-XM is Georgetown Partners."

R&R adds that should the deal win approval, Georgetown Partners "would be willing to take a long lease on the spectrum and form a free, commercial-based satellite radio company," which it promises "will be richly diverse."

It's so nice to see these AGs coming to the rescue.

[View letter (PDF) via Radio & Records]
Thanks Nathan!

The National Associations of Broadcasters spent nearly $9 million to lobby Capitol Hill in 2007, according to the Senate's public records office.

That's more than 3-times what Sirius and XM spent on lobbying last year.

The difference, of course, is that a chunk of that money was to argue that the NAB didn't in fact compete with satellite radio. A rather self-defeating argument in my opinion (and the DOJ apparently agreed).

To be fair though, the NAB also used a portion of that lobbying fund to argue against the use of unused TV channels, known as white spaces, for high-speed internet (because who needs more internet in this day and age, when you could have... nothing, instead). They also lobbied over issues related to radio royalties and media ownership.

The first-half of 2007 saw a lobbying spend of $4.3 million, while the second-half saw an increase to $4.6 million.

[AP]

After the Department of Justice approved the merger between Sirius Satellite Radio Inc. and XM Satellite Radio, they issued a lengthy analysis of why they reached this decision. But many found that "analysis" to be severely lacking because little evidence was given.

Following their approval of the merger, the DOJ held a conference call to explain the decision. I'm not sure if this will satisfy those who'd like to see more evidence by the Justice Department, but it gives a bit more color than the three-page release.

According to Broadcasting & Cable, Barnett said that in several areas the parties do not compete, especially for current subscribers who have already purchased the equipment. Given the fact that the radios are not interoperable, he said, people don't switch between services much.

He also said they do not compete in the "most important" distribution channel: the OEM channel.

Barnett said that Sirius and XM have exclusive deals with automakers stretching to 2012, and that after that there will likely be even more competition for in-car audio, including handheld mobile broadband devices as well as AM/FM radio, HD Radio and MP3 players.

They did find some competition in retail that would be eliminated by the merger, but there wasn't enough people who considered the two companies to be the closest substitutes to justify finding that the merger would harm competition or consumers.

When asked whether the DOJ had approved the creation of a monopoly, Barnett said no, that it had not found that the evidence did not support limiting the market for audio entertainment to satellite.

He also said that while Justice took into account possible future competitors given the rapid advance to technology, that was not "one of the core drivers" of the decision.

Even without that assumption, he said, he didn't think Justice would have had a basis for challenging the transaction.

[Broadcasting & Cable via Orbitcast Forums]

Last week's decision by the Department of Justice may have a domino effect for other major satellite players in the coming year, says GigaOM.

They point to satellite operators including Iridium, Globalstar, ICO Global Communications, TerreStar Corp. and Mobile Satellite Venture which are all trying to operate or build out networks. But with a shortage of spectrum for some, these may choose to follow Sirius-XM's lead, and join forces.

Given the spectrum owned and the types of satellites launched, Tim Farrar of TMF Associates feels that the likeliest deals would be between ICO and TerreStar; Inmarsat and MSV; and Globalstar and Iridium.

Does the Sirius-XM deal set off an opportunity for other satellite mergers in 2008? I'm less inclined to think so.

Simply by observing the length of time it took the DOJ analyze the situation, combined with the upcoming possible political shift in power, and you'll realize that Sirius-XM came in just under the wire with this decision. If a less M&A-friendly Democratic administration is elected to office, these types conditionless satellite mergers would likely be put on hold for the near future.

[GigaOM]

Looks like everyone needs to weigh in on the Department of Justice approving the Sirius-XM merger. Next up to the plate: The RIAA.

Mitch Bainwol, Chairman & CEO of the fan-favorite organization, decided to spin the situation to include the performance royalty argument with terrestrial radio...

"The merger's approval serves as a powerful validation that competitors should play by the same set of rules. On the heels of this decision, the logic for a performance right for terrestrial radio has never been clearer. Terrestrial radio - unlike satellite, Internet and cable radio - continues to reap special interest subsidies in the form of free government spectrum and an outdated exemption from compensating artists and record companies. It's time for that to change and for Congress to provide an economic marketplace where there is parity amongst all delivery platforms."

And while I disagree my blogging colleague Mark Ramsey on the whole issue of performance royalties for all forms of radio, I do agree with his feelings that these two issues are completely unrelated.

Photo courtesy of icanhascheezburger.com

The National Black Chamber of Commerce (NBCC) today called the decision by the DOJ a "monumental step in providing increased access to diverse programming."

The NBCC also contends that throughout the process, the group has maintained precisely what the DOJ ultimately found: that there are "efficiencies likely to flow from the transaction that could benefit consumers." As a result, NBCC feels that the merger would be the first step towards more diverse programming.

The NBCC urged the FCC to approve the merger without "onerous merger conditions" so that all merger efficiencies can be realized.

Federal Communications Commission Chairman Kevin Martin received a letter today from Congress that are "investigating allegations from current and former FCC employees and other sources, which we have reason to believe are credible."

House Energy and Commerce Committee Chair John Dingell (D-MI), sent Martin the request letter today. The letter was cosigned by the ranking Republican on the Committee, Rep. Joe Barton of Texas.

The letter's charges concern "management practices that may adversely affect the Commission's ability to both discharge effectively its statutory duties and to guard against waste, fraud, and abuse."

As a result, Martin has to deliver to Congress written records dating back 2005, including all e-mails, handwritten notes, phone conversation records, meeting schedules, and whatever else exists in paper or electronic form since January 2005 involving the audit's case file.

In addition, Dingell and Barton also want Martin to hand over any records that explain the Commission's policies on "communications between FCC personnel and outside entities" and any directives involving "limitations or restrictions imposed on FCC employees' ability to communicate with each other concerning official agency business" - among other items.

Martin has two weeks to deliver this information and records to Congress. As Ars Technica puts it, this request "has got to be turning the FCC completely upside down."

Perfect timing huh?

[Ars Technica via Engadget]
Thanks Sean!

Former U.S. Attorney General Dick Thornburgh wrote an opinion piece in the Washington Times today, voicing his concern over the Sirius-XM merger.

Most folks, by now, know that I'm on the pro-merger camp, but Thornburgh's article is persuasive one nonetheless (hey, credit given where credit is due). It's also significant that he's a former Attorney General ('88 to '91), although it also should be noted that he's a consultant to some of the most well-connected college kids ever: C3SR.

What's so persuasive about his article? This:

"This case is not even a close call under the antitrust laws -- it's plainly a merger to monopoly. Moreover, it is an important case with great precedential value. Indeed, the Justice Department decision on the Sirius/XM merger is the litmus test for everything that follows, including Microsoft/Yahoo. If this case does not provoke antitrust enforcement from the department, no forthcoming merger proposal could be ruled impossible."

And that right there sums up what the underlying issue is with this merger, and why it is most likely in eternal limbo.

The problem isn't whether satellite radio is competing with terrestrial. Of course it is. And of course, they're competing with the iPod. And of course they're competing with Internet Radio and the entire slew of current and potential rivals. That's the new world we live in. That's the reality. The lines of media and technology are - at a shockingly rapid pace - completely blurring.

But the government isn't setup to handle this change in media (or in business for that matter).

The problem isn't defining competition, the problem is precedence. If the DOJ approves this merger without a thought, they effectively are saying that the method of distribution doesn't matter anymore. And that opens up a big can of worms for future transactions.

[The Washington Times]

That's what the Department of Justice is warning the U.S. Supreme Court about as it weighs in on an FCC indecency decision.

See, the Second Circuit Court of Appeals in New York remanded the FCC's indecency finding against expletives on Fox's Billboard Awards show. The court concluded that the FCC had "failed to provide a reasoned basis for reversing its longstanding indecency-enforcement policy with respect to isolated and fleeting expletives."

According to Broadcasting & Cable, Solicitor General Paul Clement, said the Second Circuit decision left the FCC little room to modify its policy other than two extremes, adding that the court's decision "attempts to coerce the commission to choose between allowing one free use of any expletive, no matter how offensive or gratuitous, or adopting a blanket prohibition on any use of expletives."

In other words, George Carlin's "seven dirty words" might not be found indecent anymore.

Clement said the lower-court decision "effectively prevents the commission from carrying out its charge, and yet it is the commission that will be held accountable for the coarsening of the airwaves."

The U.S. Supreme Court are scheduled to meet on February 29th to decide whether to take the case, though that date could easily be delayed.

[Broadcasting & Cable]