Former Senator Donald W. Riegle, Jr. has come out in support of U.S. Electronics' proposal for an "open device" condition in the proposed merger between Sirius Satellite Radio Inc. and XM Satellite Radio Holdings Inc.

"The proposed condition... is critical to protecting consumers and fostering innovation by allowing open and fair competition," writes Riegle in a letter to the FCC. "I believe that the proposed merger should not be approved without inclusion of such a condition."

Riegle served in the U.S. Senate from 1976 through 1994 and in the U.S. House of Representatives from 1967 through 1975.

In April 2001, Riegle joined APCO Worldwide, a public affairs and strategic communications firm, as its Chairman of Government Affairs. The Government Affairs arm of APCO helps "support clients and their solutions with elected leaders and government officials."

[View FCC Filing (PDF)]

This video is picking on Sirius specifically, but the same thoughts can be applied to XM. The main question is: is satellite radio a doomed business model as the speakers seem to think?

Do the content providers really have all the control, and will the cost of maintaining a satellite-based architecture forever limit the amount of profit these two companies can make?

[MSN Video]

According to various sources, the supply of XM Satellite Radio's retail products appears to be running thin, and some products have even run to the end of their life.

The RoadyXT, once seen as a technological accomplishment when it was unvealed in 2005, along with the fan-favorite SkyFi2 are now officially "end of life," and no more units are available from major distributors, according to people familiar with the matter. UPDATE: I was just told that "there are still plenty" of RoadyXT/SkyFi2 units out there, but that Best Buy and Circuit City have stopped selling them a while ago.

Additionally, according to sources, new Pioneer Innos have been back-ordered from Pioneer for about two months now, and fresh stock won't be available until mid-June at the earliest. The aging Inno, now 2-years old, was also once considered a gadget-lover's dream.

Back in Fall of last year, XM CEO Nate Davis told Reuters that the company plans to introduce new portable receivers in 2008, citing a strategy to partner with GPS and mobile phone providers.

Sadly, nearly six-months into the year, we have yet to see any evidence of this (unless you consider the BlackBerry deal as fulfilling the latter).

So what gives? Has XM completely abandoned the retail market?

At least Sirius has released the Stiletto 2 and apparently has plans for new receivers like the Stratus 5 and the Starmate 5. Yes, they don't look like leaps in technology, but at least it's something.

Where is XM's new portable radio? Where's the "new Inno"? What the hell is XM thinking?

At one point, I had learned that a "new Inno" was indeed in development - featuring additional buttons and a larger connector. Unsurprisingly, the next-generation device was also to have some RIAA-limiting functionality that would only allow for "disaggregating" of songs recorded individually, not recorded as a channel. But since then, the buzz has gone silent, and I don't know if it's even still in the works.

Now business is business. It's understandable that the current state of retail doesn't support the case to dedicate a large budget to R&D and the release of new devices. But, at some point, this becomes a self-fulfilling prophecy. If you don't come out with new products, don't be surprised when sales continue to decline.

There's value to further developing sleek new gadgets, even if they don't fly off the shelves. Consider them to be "flagship" products - much like the Corvette is to Chevy, or the Viper is to Dodge. Sure, they don't sell as much as a mini-van, but they keep your company in the top-of-mind - especially with enthusiasts.

A touchscreen portable device with gigs upon gigs of storage may be expensive, and only sell a paltry number of units (though, at a high margin), but it certainly doesn't position your company as being stale.

Don't be like terrestrial radio. Don't relegate your service strictly to vehicles. Don't be isolated to devices that people scoff at. And most importantly, don't allow a merger to get in the way of growing a business.

According to TheStreet.com, the FCC's review of the proposed transfer of licenses in the merger between Sirius Satellite Radio Inc. and XM Satellite Radio Holdings Inc. has taken longer than any other in history.

I'm not sure of the exact validity of that statement because a quick glance at the FCC's own major transactions shows the DirecTV-Liberty deal slightly edging out the Sirius-XM merger, and the Clear Channel deal taking the lead.

Still, the FCC's "unofficial" timeclock spans 180 days. By next week, the Commission would have taken twice that long to review the Sirius-XM deal. And there appears to be no end in sight.

By Orbitcast's count, it has been an incredible 433 days since Sirius and XM filed their application with the FCC. Children have been conceived, born and are just starting to crawl while the government has held these two companies hostage.

And that - by any measure - is pure insanity.

[TheStreet.com]

Michael Meece, of the aptly named Meece Group LLC., held a telephone conversation with FCC Chairman Kevin Martin on Wednesday on behalf of Georgetown Partners.

On the same day, Meece had another phone conversation with Commissioner McDowell's legal adviser. Both conversations were revealed in FCC filings [1, 2] made public today.

Meece, a former White House aide who once was a top contender to become a FCC Commissioner, also apparently has ties to Kevin Martin. Both Michael Meece and Kevin Martin serve on the board of the early-stage venture capital fund TDF.

Meece's services have also been retained by ICO Global Communication and Mobile Satellite Ventures, among others.

But it's the fact that Meece and Martin both serve on the board of TDF that raises the question of a conflict of interest. I'm no lawyer, nor am I familiar with any federal restrictions, but I feel that any business relationship between a lobbyist and the Chairman of the FCC should be put under scrutiny.

[TDF]
Thanks Gary!

Chairman Kevin Martin said today that the Federal Communications Commission could rule on the proposed merger between XM Satellite Radio Holdings Inc. and Sirius Satellite Radio Inc. before June 30th.

"I still think the commission could act by the end of the second quarter," Martin said at a press conference.

Earlier this year, Martin had asked his staff to compile a report on the various conditions the FCC could impose on the proposed merger. Today, Martin said the staff has done what he asked, but he declined to comment on their recommendations.

Martin added that the proposal hasn't been circulated to the four other commissioners.

As suspected, Martin said that the FCC won't consider the merger proposal at its June 12th meeting. This could mean that the ruling might be delayed until July unless the commissioners agree to vote on the merger proposal without a public meeting.

On Tuesday, public interest groups Public Knowledge, Media Access Project and New America Foundation all met with the Federal Communications Commission to discuss the proposed merger of Sirius Satellite Radio Inc. and XM Satellite Radio Holdings Inc.

The meeting - which was attended by FCC Chairman Kevin Martin, Elizabeth Andrion, Acting Legal Advisor for Media Issues for the Chairman; as well as Gigi Sohn and Alex Kanous of Public Knowledge; Andrew Jay Schwartzman and Parul Desai of Media Access Project; and Michael Calabrese of New America Foundation - also resulted in one of the most detailed public filings regarding this merger of recent history.

The meeting revolved around two main topics: non-commercial/education set-aside, and open access.

But what I found most interesting was the details in the filings. I'd highly recommend reading the entire filing (PDF) to get the big picture, but here's some excerpts that I think should be highlighted:

"[Public Knowledge] suggested 10% for the minority setaside and 5% for the noncommercial set aside as reasonable."

Takeaway: That's half of what Georgetown is requesting. Keep in mind that PK is also asking that if Georgetown's proposal is granted, that they too be required to setaside 5% of their own leased spectrum for non-commercial purposes.

"...Sirius purports to demonstrate that it already provides noncommercial programming that meets the 5% threshold the parties are seeking." (See below for the chart of Sirius' proposal.)

Takeaway: Public Knowledge isn't happy with this suggestion because they'd prefer to see programming that "would not ordinarily be on satellite radio" - plus several channels are owned by the same entity, and they would prefer a limit of one non-commercial programmer per channel.


I found this section particularly noteworthy:

"Regarding the open device condition, we agreed with the Chairman that should the Commission permit any entity to manufacture a satellite radio receiver, it would obviate the need for a mandate that all satellite radios have an HD radio chip, or that they be interoperable. In that case, the market would inevitably provide for satellite radio receivers with a wide variety of features." (emphasis added)

Takeaway: This is a strong suggestion that iBiquity's proposal is losing ground in favor of open access. That's a good thing in my opinion - requiring that HD Radio be included seems to have little to do with the "public interest" and more to do with "iBiquity's interest."

What I particularly find important is that these three public interest groups appear to be challenging the proposals of Georgetown and iBiquity with more "reasonable" public-centric proposals. I'd hope that the FCC would be more inclined to agree with Public Knowledge, Media Access Project and New America Foundation, as opposed to companies that just want a piece of the action.

[Read FCC Filing (PDF)]

This video, which appears to be from a Best Buy security camera, features three girls sampling a satellite radio display... that is, until Mr. Geek Squad joins in on the party.



(Add your caption in the comments.)

Senators Claire McCaskill (D-MO) and Olympia Snowe (R-ME) sent a letter to FCC Chairman Kevin Martin today voicing their concerns about the pending merger between Sirius Satellite Radio Inc. and XM Satellite Radio Holdings Inc.

While the merger was "recently approved" (that is... nearly two months ago) by the Justice Department, the Senators say that they believe the merger "could possibly undermine competition and harm the consumer if certain conditions are not applied."

McCaskill (pictured) and Snowe urge the FCC apply a list of conditions that the Senators say would ensure "competition and fairness in the marketplace."

Their merger conditions include:

• Spectrum Divestiture: "up to half"
• Open Access: to ensure that manufacturers are "not locked or blocked," including somehow preventing the "integration of high-definition [sic] (HD) radio reception"
• Localism Preservation: "Local news, weather and political information are essential to our communities and should not be undermined by national programming."
  

Sounds like someone is being, ahem, "influenced" by the NAB doesn't it?

[Read the Letter (PDF) via FMQB]

While the Federal Communications Commission is sitting on their hands deciding on the Sirius-XM merger, terrestrial radio's counterpart is making progress with our neighbors down south.

Mexico's Federal Telecommunications Commission (CoFeTel) has authorized radio stations within 200 miles from its border with the U.S. to begin transmitting in HD Radio technology.

Official statement (translated):

"Considering the extent of the development and implementation of the IBOC system in the United States of America, Mexico is required to take decisive action so that [the country's AM and FM radio stations] in the zone located within 320 kilometers of the northern border of Mexico can transmit at the same technological level so that they can provide the benefits of quality service to the radio listening public."

CoFeTel went on to state that stations that want to transmit with in HD Radio must request authorization from CoFeTel and must commit to assisting the commission in studying the technology.

Sirius and XM do not sell satellite radio service to Mexico, officially, but that hasn't stopped Mexico's version of the NAB from making a stink about possible reception. Apparently they don't have the same ill feelings to HD Radio.