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)]

The "Consumer Coalition for Competition in Satellite Radio" - or "C3SR" - is at it with their hijinks. This time around, the best connected group of college students side , has issued a press release demanding the FCC hold a hearing on the Sirius-XM merger.

Their reason? Because of a letter C3SR filed with the Commission today which they say "brings new light" to the proposed merger of Sirius Satellite Radio Inc. and XM Satellite Radio Holdings Inc.

C3SR further labels the merger as "an anticompetitive merger to monopoly that would harm consumers." (Note the "merger to monopoly" wording? Sounds familiar... like, something the NAB might say. Oh right, C3SR is "supported" by the NAB.)

The filing, which numerous parts are redacted due to confidential information, claims that documents filed by Sirius on April 10th "cast the merger in a very negative light," according to C3SR. This "new light" appears to be based on Sirius-XM's failure, or as they call it, a "coordinated plan to restrain trade," to bring interoperable radios to market.

The group adds that Sirius' filing, in their opinion, calls into question "the truthfulness and candor of both Sirius and XM with respect to their dealings with the Commission as licensees and during this proceeding."

Seriously? Are we still stuck on the same NAB talking points from Spring '07? Does the failure to bring an interoperable radio to market completely trump the entire merger process?

Oh, and speaking of truthfulness and candor. Remember that last year C3SR's founder Chris Reale told Corporate Crime Reporter:

"If we were out there in the media telling people who funded us, it would detract from support from different groups."

Groups like... consumers.

[Read Filing (PDF)]

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)]

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]

Would the Department of Justice have approved the merger between Sirius Satellite Radio Inc. and XM Satellite Radio Holdings Inc. under the Obama administration? Some antitrust lawyers don't seem to think so.

"It's generally understood that if Obama wins, that the enforcement priorities of the DOJ would change," Leiv Blad, an antitrust lawyer with Clifford Chance, told Reuters.

According to the article, the Justice Department's approval of the Sirius-XM merger "caused eye-rolling" among antitrust lawyers.

And while Obama didn't directly address the satellite radio merger, he did tell reporters in Oregon on Sunday that the Bush administration has been lax, particularly in enforcing merger law.

"If you talk to members of the antitrust division of the Justice Department, the career folks who came in before George Bush took office, there's a sense that there's not a real interest in antitrust prosecutions," the said the Democratic presidential hopeful.This might not be a simple partisan issue though. Steve Axinn, of Axinn, Veltrop and Harkrider LLP, said firms were wrapping up deals in the belief that any of the candidates - be it Republican Sen. John McCain, Democratic Sen. Hillary Clinton or Sen. Barack Obama - would oversee tougher merger reviews than the Bush administration has.

"People are working quickly to get things done during this administration. They have for some time," Axinn said. (I find that statement only slightly humorous, considering that it's been 427 days since the merger application has been in the hands of the FCC.)

But Evan Stewart, an antitrust lawyer with Zuckerman Spaeder LLP, urged caution in reading too much into Obama's comments: "This strikes me as sort of traditional on the stump talk. Look, no one ever runs for president saying 'you can count on me for lax antitrust enforcement.'"

So what's your opinion? Do you think the DOJ approval is representative of the current administration? And how does that translate to the current state of affairs at the FCC? Sound off in the comments.

[Reuters]

The Senate last night voted to nullify the FCC's decision to loosen media ownership rules which allows media companies to own a newspaper and a television station in the same market.

Sponsored by Sen. Byron Dorgan (D-ND), and 26 other senators - including Hillary Clinton and Barack Obama - the unusual "resolution of disapproval," was approved by a voice vote.

Dorgan said the FCC action opened a "gaping loophole for more mergers of newspapers and television stations across the country."

Commerce Secretary Carlos Gutierrez said he was "disappointed with the Senate's action" and would recommend to the president that he veto the bill.

"The FCC's approach modernizes a 30-year-old rule in a way that improves the financial viability of the newspaper industry, which faces an increasingly competitive media market," he said.

Obama issued a statement supporting the vote.

"Today the Senate stood up to Washington special interests by voting to reverse the FCC's disappointing media consolidation rules that I have fought against," he said. "Our nation's media market must reflect the diverse voices of our population, and it is essential that the FCC promotes the public interest and diversity in ownership."

If we're wondering what is currently occupying the focus of the FCC, we now have a big clue. I wouldn't dismiss this "resolution of disapproval," this action by the Senate could impact the FCC in general in a very big way.

And considering how politicized the Sirius-XM merger has been, and how Senator Dorgan feels about it already, you have to wonder if similar action would be taken if approved (without "satisfactory" conditions). Then again, maybe Congress has just made its point and won't have to.

[AP via Orbitcast Forums]

Barrington Research analyst Jim Goss writes in a recent report that he feels Sirius Satellite Radio Inc. is "better positioned" than XM Satellite Radio Holdings Inc. to achieve profitability should the merger not go through.

"We continue to believe that the FCC will likely approve the merger, although the time frame remains unclear," write Goss.

Barrington adds that, "if the merger is blocked or the approval language contains unacceptable conditions, we would continue to favor Sirius as the better standalone operator." Goss said that Sirius is "better positioned" than XM "to achieve profitability in a shorter time frame with relatively less downside risk."

In a report on XM, Goss noted that, "In the event that this does not occur, we feel some risk would exist in the stock."

[RadioInk]