The NAB has filed a Reply to Opposition (PDF) with the FCC disputing Sirius-XM's proposed A La Carte packages.

But the notable part doesn't lie in the filing itself, rather in the fact that comments posted to Orbitcast are actually quoted in the filing. So before we continue, let's give a full round of applause for Joe, Flap Jackson, PFreak, JohnG, and Mr. FancyPants.

I think it's a testament to the strong community here, and the encouraged open format for accepting opposing views. That we'd ever see the ridiculous medley of screennames actually being cited in an FCC filing is deserving as well.

Satellite Radio TechWorld puts it perfectly, the NAB has just "immortalized" the commenters here with this filing. It's proof positive that they read, not only what I'm writing, but what you are writing.

And that's the most important of all.

[Satellite Radio TechWorld] 

The Parents Television Council (PTC) has once again publicly praised XM and Sirius satellite radio for the proposed A La Carte pricing as well as their "family-friendly" packages offered as a benefit of the two companies merging.

"This announcement by XM and Sirius constitutes the best set of parental controls we’ve ever seen to not only prevent children’s access to adult-themed programming, but to enable the marketplace to decide what it wishes to purchase and pay for," said PTC President Tim Winter.

"If the merger is approved and satellite radio gives its customers real choice in programming, it will be a groundbreaking moment for the future of subscription-based entertainment," Mr. Winter continued.  "There is no question that greater control of graphic content, combined with giving consumers the ability to have some control over packages and pricing is in the public interest and certainly in the interest of parents and families."

These are some hefty words, considering that the PTC is arguably the single biggest influence on indecency regulation in America. The PTC regularly launches massive campaigns to file complaints with the FCC over content they deem to be 'indecent' broadcasts.

"We call upon the cable and satellite television industries to follow the lead of XM and Sirius and give real choices to their own customers who are deeply offended by many of the channels families are forced to buy just to get access to the quality family programming available on cable," said Mr. Winter.

This isn't the first time the PTC has come out in favor of the merger thanks to the "block and rebate" programs. But the repeated strong show of support must have some weight with regulators. I'm not sure which group is more annoying to the folks over at the FCC: the NAB or the PTC?

From a personal standpoint, and as a parent myself, the best 'regulation' can also be called 'parenting.' (Crazy thought right?) But regardless, I really do agree with this final statement by Mr. Winter.

"Only a meaningful solution like this one will allow the marketplace to decide for itself what it wants and what it is willing to pay for."

And that's the truth.

Dave Van Dyke, president of Bridge Ratings, yesterday wrote a fascinating entry in a recent blog post about the Sirius-XM merger and his personal take on its chances.

In it, he discusses how Bridge's research shows that sentiment for the merger has leaned more towards the positive side for current subscribers - but that non-subscribers still don't like it. This shows that Sirius/XM have done a good job of marketing the merger - internally. But that's hardly the interesting stuff in Van Dyke's post.

The meat and potatoes comes further into it, when he points that the NAB has essentially proven Sirius-XM's point about whether terrestrial and satellite radio compete.

"In the case of the NAB and Mr. Rehr in particular, he doth protest too much."

"...Mr. Rehr has firmly crystallized Mr. Karmazin's point that a merged satellite company is not a monopoly..."

Youch!

It's no secret that David Rehr has reluctantly become the champion for the Sirius-XM merger, but to hear it from someone within the radio industry? That's impressive. This isn't coming from a nattering blogger waving the Sirius-XM pom-poms (or even rogue bloggers who are trying to wake up the radio industry). This is coming from the head of a research firm that terrestrial closely follows.

"Was the approval of this merger terrestrial radio's to lose? I think so. The strategy was wrong. The NAB made the case for the other side."

The problem for Rehr and crew is that Dave Van Dyke is completely correct. But they've embarked down a path that is impossible to back out of. The damage is done. The NAB has no choice but to continue fighting as hard as they can (though they really do have bigger fish to fry). And the more they fight, the more they prove the opposing side's point.

[Navigate the Future] 

The FCC has no intentions of bringing back the Fairness Doctrine, said FCC Chairman Kevin Martin. And he cited satellite radio as one of the reasons.

The Fairness Doctrine was first instituted in the late '40s, but was finally put to sleep in 1987 when it was determined the doctrine was not in the public interest.

Several Democratic lawmakers suggested that Congress take another look at the doctrine after conservative radio talk show hosts aggressively attacked an immigration reform bill when it was on the Senate floor, contributing to its defeat. Representative Mike Pence (R-IN) and other Republicans in both the House and Senate countered by introducing legislation to bar the FCC from reinstating the rule.

But Martin effectively squashed the issue in a letter to Pence that was made public today. The FCC Chairman said that the Commission has no intensions of revisiting the doctrine, and that government regulation wasn't needed to ensure public access to a wide range of opinion.

"Indeed, with the continued proliferation of additional sources of information and programming, including satellite broadcasting and the Internet, the need for the Fairness Doctrine has lessened even further since 1987," wrote Martin.

And THAT is pretty cool to see.

[Breitbart]
Thanks espnjason!

When Sirius and XM submitted their plans for A La Carte pricing tiers earlier this week, they undoubtedly raised their chances of having the merger approved by the FCC. Chairman Kevin Martin has always had A La Carte on the top of his agenda, and the proposed Sirius-XM plans sets a precedence for the rest of the media industry. Moreover, it supports the thought that the merger is in the public interest, which is the main guiding factor the FCC considers in approving deals like this.

But what about the DOJ?

The Department of Justice has a less transparent process, but their decision to define the relevant market is the keystone to this whole deal.

Luckily. a recent report by Washington Analysis, a firm that conducts economic and political legislative and regulatory analysis, has provided some updates on the review process over at the DOJ. They are optimistic that the merger will be approved by the DOJ, actually going against the current consensus. Here's some key takeaways:

Document Gathering
The DOJ is still in the document gathering stage. Washington Analysis said they "have reason to believe that there are no smoking guns" as was the case in the Wild Oats-Whole Foods review. No news is good news.

Customer Support
The support of OEM auto manufacturers and retailers like Circuit City weighs heavily on the process. These partners have the most to lose if the merger wasn't going to move more units, and the A La Carte pricing should do just that.

Chief Economist
Last September, Professor Dennis Carlton was appointed Deputy Assistant Attorney General for Economic Analysis. According to Washington Analysts, Carlton is from the "dynamic market" school of thought and is likely to have a more expansive view of the audio entertainment sector. The relevant market in turn wouldn't be confined to two satellite radio companies.

Efficiencies
The merger was reviewed by an independent third party which concluded that there would be hundreds of millions in annual savings. Washington Analysis feels this is important in the DOJ review, because it supports the argument that rates would come down after the merger.

The DOJ is generally hard to gauge during interviews because they like to play devil's advocate for each party they talk to. If they think you're in favor of the merger, they'll ask questions that argue in opposition. If they think you oppose it, they'll ask favoring questions. I've talked to several who were interviewed by the DOJ, and they weren't able to determine which way the DOJ was leaning.

From a timing standpoint, you can expect the DOJ to make the first move, followed by the FCC. They didn't in the DirecTV-EchoStar deal, but they acted pretty close to each other (and both rejected the deal so it didn't matter anyway). We can probably expect the DOJ to make their move sometime in late-Fall.

Nothing's changed obviously, it's still a discretionary matter. But this report definitely has some interesting insight behind the process. And in the end, it's only a few more months before this madness is over.

XM Satellite Radio may potentially be getting access to more spectrum from cell-tower operator Crown Castle.

You might recall XM's failed attempt at acquiring WCS Wireless last year. XM had planned to buy WCS Wireless and its adjacent 2.3GHz band, under the assumption they would offer multimedia subscription services, including video and data. WCS pulled out of the deal and was later acquired by NextWave.

Now two XM investors - Telcom Ventures and Columbia Capital - have formed a venture to lease the 1.67-1.675 GHz spectrum in the top 300 markets from Crown Castle. The two companies had previously been investors in WCS Wireless, while Crown Castle once planned for a nationwide mobile-TV service for their spectrum (aka Modeo).

The leasing deal by the two XM investors gives XM another possible means of obtaining the additional spectrum, according to TWICE. That is... only if Telcom Ventures and Columbia Capital have no plans to pursue Crown Castle's mobile-TV initiative.

As part of the lease arrangement, Crown Castle will be the provider of the infrastructure for future tower sites needed by Capital and Telecomm. The $13 million annual lease (Crown Castle has about $10m in annual network costs) runs from July 23, 2007 until October 1, 2013, after which lessee gets the right to acquire the spectrum for $130 million, plus inflation, or renew the lease for up to 10 years at $14.3 million per year.

Interesting.

[TWICE]

Let me preface this by first saying that I pretty much can't stand Jim Cramer.

At one point in time, I actually enjoyed his banter and his advice seemed to make sense, but the circus that is Mad Money just continuously rubs me the wrong way. I just can't stand it. I even blasted him about a year ago, flat out calling Cramer an idiot about his persistent merger talk (oops).

But a recent video clip about the politics of the satellite radio merger really sums it up nicely. And I have to give credit where credit is due.

When we hear about how the political weight of some comments - such as those from 78 Congressmen - being stronger than the majority, Cramer explains it as such:

"All they really care about, a lot of these guys, is getting re-elected," Cramer said. "So the last thing they want to do is piss off a radio station in their town."

Cramer goes on to say that Sirius and XM really "have no defenders whatsoever in the Capitol, which is why they're willing to do the unthinkable, which is to unbundle and make it so that they can't make as much money per customer."

The "unthinkable" is generally bad business, as investors want to see corporations squeeze every penny from each and every subscriber. But for the customer, it's a pretty phenomenal deal.

Anyway, I think it's a good video to watch, even though I'm still not a fan.

[TheStreet TV Recap] 

BREAKING: Sirius Satellite Radio (SIRI) and XM Satellite Radio (XMSR) have jointly filed their reply comments with the FCC.

The "Joint Opposition to Petitions to Deny and Reply Comments" is in total a 112-page document that includes more details on XM's and Sirius' A La Carte pricing plan, disputes the NAB's arguments against a combined satellite radio company, and argues Sirius-XM's case as to why the merger would be in the public interest.

This post will be updated as I read through the document. You can of course read it yourself here (PDF). UPDATE: Don't forget to read Appendices A (PDF) and B-H (PDF), some good stuff in there too.

There's an interesting article in Seeking Alpha today by M&A Researcher about the new pleading cycle involving the 1997 SDARS rule. But what really struck me was the comparison between the sheer number of FCC comments, versus the "weight" of other comments.

"The vast majority of analysts (professional and amateur) continually fail to accurately weigh the comments in terms of significance, instead falling into the trap of literally counting the supporter/opponent filings as if the FCC will do the same. While the FCC is surely aware of the tally, it is certainly much more interested in the nature of the comments, and more importantly, from whom the comments originate. It can not be stressed enough, even at this early stage, that the opponents involved so far have far more clout within the D.C. beltway than do the supporters. This too is subject to change in the coming months."

If you look at the FCC Comment Scorecard (courtesy of SiriusBuzz), you'll see how the "pro" comments are definitely outweighing the "anti" comments.

The point that M&A Researcher is trying to make (though they seem rather proud about it) is that the influence of the anti-merger camp outweighs the number of pro-merger comments.

Which, sadly, all goes back to politics. It's disgusting to think that pressure from politicians (who are only looking out for their constituents campaign contributors) would outweigh the opinion of the majority. But hey, it's all in the name of the "public interest" isn't it?

[Seeking Alpha] 

National Public Radio has filed a 25-page Petition to Deny the proposed Sirius-XM merger with the FCC. At the same time, Senator Sam Brownback (R-DS) voiced his opposition in a letter to the FCC and DOJ.

NPR said in the petition (PDF) that the merger "would substantially harm the diversity of voices" on satellite radio. It also noted that a merged entity "might reduce the amount and quality of public radio programming" available on satellite, adding that the company would "be able to demand less favorable licensing terms, thereby forcing NPR and others to decide between program quality and carriage."

NPR has two channels on Sirius, though this isn't the only time that NPR has held an opposing position to the satellite radio industry.

Separately, Senator Brownback (R-KS) sent a letter to FCC Chairman Kevin Martin and Assistant Attorney General Thomas Barnett, suggesting that the proposed merger be rejected.

In his letter, Brownback writes, "The proposed merger may result in higher subscription prices and fewer programming choices, and yield monopoly power to purveyors of highly offensive, sexually explicit programming (emphasis added) that is inappropriate and harmful to our nation's families, thereby encouraging the airing of increased amounts of such programming."

Wow. That's quite the leap there Senator. 

[FMQB]