In the past year, more Americans have become used to thinking of their cellphones as entertainment devices at a soaring pace, according to a new-media survey from Deloitte & Touche.

Deloitte's first edition of the survey (which was performed just 8 months earlier) showed that 24 percent of U.S. consumers used their cellphones as entertainment devices. Since then, a follow up survey shows that entertainment usage on cellphones jumped 50 percent, bringing the total of U.S. consumers who use their cellphones as entertainment devices to 36 percent.

The findings of the survey of 2,081 Americans, conducted in late October, were provided to The Hollywood Reporter before their official release next month.

Roughly 62 percent of "millennials" (13-to-24-years-old) are using their cellphones as entertainment devices - that's up from 46 percent in the previous study conducted in late February. And among Generation X consumers (25-to-41-year-olds), the number grew to 47 percent - up drastically from 29 percent in the earlier survey.

That's a pretty rapid adoption rate. And only in eight months. Now imagine how that usage will grow in the next two years?

Note to Sirius and XM: If you want to ride this wave - stop thinking of your mobile services as a revenue generators, and start thinking of them as a lead generators. The key to adoption, is exposure.

[Reuters]

In a Consolidated Opposition filing with the FCC, Sirius and XM have blasted the "multitude" of filings submitted by U.S. Electronics, Inc. (USE), using some of the strongest language to date.

"USE never petitioned to deny the merger in accordance with the Commission’s rules and thus has no standing to raise anything but informal objections to the transaction," the companies state in the joint filing. "But since the close of the formal merger pleading cycle, USE has inundated the Commission with at least 40 petitions, motions, letters, and other filings in the merger docket."

Sirius and XM go on to argue all the arguments that US Electronics has presented (as they have done so in the past... "repeatedly"), and contend that the company is attempting to use the FCC to resolve a private contract dispute. US Electronics filed a lawsuit earlier this year against Sirius, asking for $48 Million in damages.

"In essence, USE invites the Commission to insert itself in the arbitration between Sirius and USE in order to require Sirius to license USE to manufacture and distribute Sirius equipment, in spite of the inability of Sirius and USE to work together in a contractual relationship," write Sirius-XM.

"The volume of USE’s filings expose the grudge match that it is pursuing against Sirius, and the relief it seeks exposes the self-interest underlying USE’s filings. Sirius and XM urge the Commission to resist USE’s invitation to insert the FCC into this private contractual dispute."

It's a very strongly worded filing and well worth the read if you're interested.

[FCC Filing (PDF) via SiriusBuzz]

Representative Paul Broun (R-GA) sent a letter on Friday to US Attorney General Michael Mukasey, FTC chairman Deborah Platt Majoras and FCC chairman Kevin Martin, blasting the merger between XM Satellite Radio Holdings Inc and Sirius Satellite Radio Inc.

Broun is a member of the House Homeland Security Committee and the House Science & Technology Committee.

He wrote that the merger would result in an "elimination of competition" that "would hurt my constituents who are consumers of satellite radio."

Broun said the original FCC decision to issue licenses to two satellite radio providers "resulted in robust competition and expanded choice for the American consumer, all of which would be undermined by a merger of Sirius and XM."

He added that "a united Sirius/XM would be free to raise consumer prices, unchecked in the marketplace."

Broun also pointed out that the FCC "has never before allowed the only two competitors in a given market to combine. Present circumstances do not warrant the FCC's complete reversal of its conclusions in the satellite radio licensing decision, or the consumer benefits and protections that have resulted from that decision."

[Billboard via Orbitcast Forums]
Thanks N2DEEP!

Here's a fun ongoing trend: organizations that are willing to accept the burden of responsibility - in the name of "public interest" - by asking the government to mandate that they get a piece of the Sirius-XM action.

First we had U.S. Electronics and Georgetown Partners, either of whom want "open network access" or a chunk of the bandwidth, and now iBiquity - the folks behind HD Radio - has joined the fray.

They conveniently ask the FCC requires that HD Radio be included in all satellite radio receivers, and that a merged Sirius-XM terminate all exclusive agreements with suppliers, retailers, and the OEMs. How generous of them.

Mark Ramsey sees this as a sign that HD Radio is hurting in its efforts to garner support from Detroit. It also might be a signal that the merger opposition from the NAB is coming to an end.

Satellite Radio TechWorld points out that Sirius and XM worked their respective asses of to build that OEM support, and that approving this would be unfair to the satellite radio industry. "iBiquity appears to want a free ride."

And the discussion is even more heated over in the Orbitcast Forums.

It seems to me that HD Radio/iBiquity needs to move more towards the "if we can't beat 'em, join 'em" attitude, and try working with satellite radio. If iBiquity wants to be embedded in all satrad receivers - maybe they should try a different approach.

Obviously HD Radio isn't something the public wants, but they have another asset that Sirius and XM want: bandwidth. Maybe it's time for less vinegar, and more honey.

[Satellite Radio TechWorld, Hear 2.0]
Thanks to everyone who sent this in!

With analysts and FCC Commissioners indicating a decision won't come until next quarter, not to mention only a few government-decision days are left until the new year, it looks more and more like we'll be on the edge of our seats into 2008.

Former FCC Chairman, and current hired gun for Sirius (of the Wiley Rein namesake), referenced this during a recent teleconference with Wall Street analysts led by Bear Stearns' Victor Miller.

"DOJ always goes first in this area," Wiley told analysts on Wednesday. "It is looking more and more like a 2008 decision."

Wiley then added, "If I had anything to say, I couldn't say it, but I don't have anything to say."

[Radio & Records via Orbitcast Forums]

FCC Commissioner Jonathan Adelstein, one of the two Democratic members of the FCC, spoke with NPR yesterday and gave some insight into the timing of the Sirius-XM merger decision.

During the interview on NPR's "Talk of the Nation," which focused primarily on the recent media consolidation ruling, Adelstein indicated that the DOJ's decision could be coming "shortly" and that the FCC's own decision would come in the first quarter.

"We’re hearing that action could be coming shortly but I don’t want to predict for sure, and then sometime after that presumably the FCC would act," said Adelstein in response to a caller. "I think probably in the first quarter of next year."

Of course the FCC Commissioner is using all the safe-words, but it's the first solid indication of timing - aside from various analysts' DC contacts - since FCC Chairman Kevin Martin said a decision would be coming in Q4. Adelsteins comments also coincide with a report from RBC's David Bank, which indicated a DOJ decision by the end of the year, and an FCC decision in February.

Listen to the audio snippet below:

[Listen to the full audio, or read the transcript]

The Federal Communications Commission has removed the item involving Satellite Radio repeater towers from today's meeting Agenda.

In fact, it wasn't just removed. It was adopted.

The Open Meeting, schedule to take place at 10:30 am ET today (i.e., right now), was supposed to focus on Sirius and XM's terrestrial repeaters, and the rules governing them.

But according to an update issued this morning on the FCC's website, the item has been deleted from the Agenda, Further, the "Establishment of Rules and Policies for the Digital Audio Radio Satellite Service in the 2310-2360 MHz Frequency Band" has been adopted by the Commission.

That's an interesting last minute development.

[FCC Meeting Agenda Update (PDF)]

General Motors, Ford, Toyota, Honda, Hyundai and Kia have come out in full force and publicly supported a combined Sirius-XM. Chrysler even sent a letter to FCC Chairman Kevin Martin and Assistant Attorney General Thomas Barnett expressing no opposition to the merger.

GM cited the enhanced program offerings and lower prices, Ford point to a positive impact that the merger would have on the competitive landscape, and Hyundai noted the pricing benefits and the "best of both" option.

Here's some select statements released by Sirius-XM:

"General Motors believes the proposed merger is and will be in the public interest because the merged company will be able to offer consumers expanded programming choices and a broad range of service packages, including packages at lower prices." - (Richard M. Lee, Executive Director - Satellite Radio Services, General Motors North American Operations)

"We believe that a company that combines the capabilities of Sirius and XM could serve the interests of consumers by offering a more dynamic and potentially cost-effective product, spurring additional competition with audio entertainment providers such as terrestrial radio, and that this may result in greater innovation."
- (Paul Mascarenas, Vice President Engineering, Product Development - The Americas, Ford Motor Company)

" ... It has become evident that satellite radio and digital satellite services must compete mightily in the U.S. with a wide array of burgeoning entertainment forms and an ever-widening list of technology participants who are delivering services in this space."
- (Charles Koch, Manager, American Honda Product Planning)

"This expanded choice and lower price is exactly the value our consumers want and deserve."
- (Len Hunt, Executive Vice President and Chief Operating Officer, Kia Motors America)

"Rather than being forced to choose between content that currently is exclusive to one satellite radio provider, our customers will gain access to packages offering the 'best of both' services for significantly less than the current combined price, as well as packages of fewer channels at much lower prices."
- (Wayne Killen, Director of Product Planning, Hyundai Motor America)

Last year, these auto manufacturers sold over 85% of the light vehicles sold in the United States.

The merger between Sirius Satellite Radio Inc. and XM Satellite Radio Holdings Inc. will likely get the DOJ's seal of approval by the end of this year, with the FCC predicted to follow suit in early February, according to RBC Capital analyst David Bank.

In a recent research note, RBC wrote that their sources in D.C. indicated that the DOJ is likely to approve the merger before the end of the year. While reports of an imminent decision were obviously incorrect, RBC still finds that Assistant Attorney General Thomas Barnett - who ultimately rules on the merger - will be leaning towards an approval.

At this point, the FCC's 180-day timeclock has become "immaterial" (obviously) and Bank estimates that the FCC won't make a final decision on the Sirius-XM merger until "early February at best." RBC sources indicate that the FCC is predicted to be 1-2 months away from fleshing out all the conditions to the merger (such as pricing, interoperability, unused bandwidth, indecency, etc.).

The FCC also recently began publishing a list of "Items on Circulation" - a weekly list used to provide better transparency into what the Commission is currently reviewing - and the Sirius-XM merger is not on the list. So a decision by the year-end is unlikely.

Remember that the DOJ looks at competition as far out as two years from now when analyzing the marketplace.

A year ago, Apple and Google were not players in mobile devices, and Microsoft was not behind a disruptive force for in-vehicle entertainment. Bank, citing the iPhone specifically, feels that mobile audio entertainment on cellphones "will likely be ubiquitous" using this perspective.

Thanks Sam!

Sirius and XM have just issued a press release highlighting key support for their pending merger, citing a "diverse group of advocates" with "economic and consumer benefits."

Three additional Members of Congress joined GM, the Club for Growth, Harpo Productions, the Rural Coalition, and celebrities like Andres Cantor, Bill Mack, Wynton Marsalis, Cal Ripken Jr. and Barry Switzer as the latest supporters.

Reps. Joe Baca (D-CA), Bob Filner (D-CA) and Connie Mack (R-FL) are among the latest bi-partisan Congressional supporters.

"I find that the merger will not only maintain an advanced technological innovation, it will bolster the industry thereby strengthening our economy. More families and individuals will have an opportunity to access satellite radio." --Rep. Joe Baca

"The proposed merger will enable satellite radio to become a stronger competitor and will drive all other players in the market, including terrestrial radio, to focus on making their services even more appealing to consumers."
--Rep. Connie Mack

GM added its support and urged the FCC to avoid conditions that would compromise the performance or programming content available for vehicles with single mode receivers (no doubt a response to Georgetown Partners and U.S. Electronics wanting a piece of the bandwidth):

"GM believes the merger clearly will increase entertainment choices in the automotive environment particularly as "best of both" and as a la carte pricing becomes available for satellite radio services." --Richard M. Lee, Executive Director - Satellite Radio Services, GM

Several others like the Rural Coalition, Wynton Marsalis, Harpo Productions and Cal Ripken Jr. are also quoted in the press release.

It's clear that even though we're well past the FCC's 180-day timeclock, this is still very much a game of politics, public relations and lobbying. And it's just going to continue until we see a decision from regulators.

[Press Release]