Georgetown Partners, the minority-owned company that wants 20% of satellite radio infrastructure handed over to them, has filed comments with the FCC calling the Sirius-XM proposed A La Carte pricing a "fairytale."

"The Sirius-XM 'A La Carte' offerings are a 'fairytale'." writes Georgetown Partners in the ex parte filing. "There are no public interest benefits in the near or even in the intermediate future."

Georgetown's claims go on to state that all satellite radio receivers would have to be replaced in order for the A La Carte packages to be made available to subscribers.

"Even assuming that sometime in the distant future these radios were actually to be produced and could be purchased, the more than 30 million present owners of installed automobile satellite radio receivers and the tens of million of future car owners of such radios would have to rip these radios out of their dash boards, junk them, and pay whatever monopoly price the post-merger company would charge for the 'next generation' radios," writes Georgetown.

(As opposed to waving a magic wand and making those receivers capable of new features?)

"Unlike the Sirius-XM 'A La Carte' offerings, [Georgetown's] proposal provides true benefits for the public including to every owner of a satellite receiver today and in the future and a competitive presence in the market that otherwise would be ruled by a monopoly," the company writes.

"Georgetown’s proposal requires the combined Sirius-XM to carry Georgetown’s advertiser-supported programming to everyone with a satellite radio receiver – subscriber or not. The result would be immediate, continuing and permanent tangible benefit to the public."

So let me get this straight, the public interest solution that Georgetown is proposing is to... introduce commercials into a free service?

Wait ...and why can't the FCC require that Sirius-XM do this themselves?

[FCC Filing (PDF) via Orbitcast Forums]

When Sirius Satellite Radio Inc. and XM Satellite Radio Holdings Inc. announced their plans to merge, no one expected the process to be easy. But what I don't think anyone expected, was for the process to take so long.

Oh sure we knew there was trouble when the preliminary review process dragged on to the point that it earned the dubious distinction of the longest application-to-clock delay in FCC history. But that simply meant that the Commission was dragging its feet in starting its unofficial shot-clock - a timeline that made no difference anyway, since the FCC blew past the deadline regardless.

But the Department of Justice had already begun its process long before. XM and Sirius even certified their compliance with the DOJ's Second Request back in early September, causing industry experts to predict a decision as early as October (the Second Request compliance usually triggers a 30-day clock).

So here we are, 342 days later, and still no decision in sight.

Take a look at the graph above, mergers with far bigger valuations and/or far more monopolistic concerns, were decided upon earlier than the XM-Sirius merger. That graph illustrates the length of time from when a merger was announced, to when a government body actually made a decision.

And remember, Sirius-XM haven't had a decision yet, so that red bar will continue to grow.

It's sad, because in the case of Whirlpool-Maytag, the washer/dryer market was consolidated to a 70% share and it was ultimately approved by the FTC. In the case of Whole Foods-Wild Oats, the FTC charged that prices could go higher, while quality and service could get reduced - but that deal ultimately went through - in almost half the amount of time that Sirius-XM have been in limbo.

Need more examples? The FCC approved the AT&T-Bellsouth merger (valued at a whopping $85 billion - Sirius/XM is estimated to be 10% of that), which controls 22 states, and includes local phone service to 70 million residents - in some states, it made AT&T the only choice for business access services. Google's purchase of DoubleClick combined the two largest online advertising distributors - which was criticized for hurting competition by two companies that are no stranger to antitrust concerns: Microsoft and AT&T - and it was ultimately approved as well.

Even EchoStar-DirecTV, arguably the most similar to the Sirius-XM merger - and was ultimately denied by the FCC - took less time to come to a decision than the satellite radio merger.

Echoing the sentiment of others: it's time for the government to come to a decision. Whether it be to approve or deny the merger, the DOJ and the FCC need to stop stalling, and start acting. Not only investors, but also consumers and especially employees, of both Sirius and XM are suffering at the expense of the government's indecision. And this constant state of speculation needs to end.

Make the decision, and let's move on.

The National Council of Negro Women (NCNW) submitted a letter to the FCC yesterday, voicing their general opposition to the Sirius-XM merger.

And one of the main reasons as to why they don't approve of the transaction is... Howard Stern, Opie & Anthony and Bubba the Love Sponge.

"One only has to evaluate the current programming now offered by Sirius and XM to recognize that our concerns and fears are well founded," the NCNW wrote in their letter to the FCC Chairman. "Programming such as Howard Stern, Opie and Anthony, and Bubba the Love Sponge - which help to perpetuate racist and sexist stereotypes in our culture - drive the business of both companies." (emphasis added)

The African-American women's organization goes on to say: "A Sirius - XM satellite radio monopoly will focus it (sic) resources on only its most profitable audiences, with more of the same lowest-common-denominator programming of the Howard Stern variety."

That's quite the assumption for a post-merger scenario.

And if that's the case, why wait? Both companies already seek profitability right now. Why would XM hire Oprah Winfrey, Dr. Maya Angelou, and the Reverend Al Sharpton - after hiring Opie & Anthony mind you - if selling out to the "lowest-common-denominator" was such a priority?

Howard Stern, Opie & Anthony and Bubba the Love Sponge constitute only 3 channels out of over 300 combined - that's 1% of all programming offered by Sirius and XM together - let's not forget that.

The National Council of Negro Women goes on to voice their support for Georgetown Partners. Georgetown, which also has the support of the Rev. Jesse Jackson, is asking that Sirius and XM be required to hand over 20% of their channel capacity so as to "create competition and diversity" in satellite radio.

Disgusting.

[Read the full letter (PDF)]

Adding to the list of merger-related activity at the FCC recently, iBiquity Digital Corporation held yet another meeting with members of the Commission earlier this week, according to a recent FCC filing.

iBiquity CEO Robert Struble and counsel met with Commission Jonathan Adelstein and Rudy Brioché of Commissioner Adelstein’s office. Their discussion was similar to previous meetings in that iBiquity expressed "concern" over competitive implications should the merger be approved.

Speaking of implications. iBiquity implies quite a bit at these meetings. From the filing:

"iBiquity raised concerns about exclusive arrangements between XM and Sirius and automobile manufacturers that could serve as a barrier to iBiquity’s ability to sell HD Radio receivers to end users. iBiquity also expressed concern that satellite radio companies may have used subsidies and incentives to discourage proliferation of HD Radio products. iBiquity discussed its concern that the merger has the potential to exacerbate these problems."

Interesting, so now that sluggish growth we're hearing about is XM and Sirius' fault? Seriously? Remember, some studies predicted that 1.5 million HD Radio units would be sold in 2007 (and that was reduced from 2.1 million), while other research firms, like Barrington Research, had hoped for a more conservative 1 million units.

"Our impression is that the actual unit sell-through was only about half that total," said Barrington Research analyst Jim Goss. That's roughly 500,000 units for the entire year if your math is rusty.

So the burden of that failure is now being placed on satellite radio's mystical "incentives" that somehow "discouraged" the sale of HD Radios. That is, despite HD Radio being all over CES this year, and being included in new tabletop radios that forgo XM in favor of iTunes Tagging support. Yeah, I can definitely see proof of iBiquity's accusations there.

iBiquity's solution to these "concerns" of course hasn't changed since last month - they just want the government to require that HD Radio technology be included in every satellite radio sold.

Oh, and Goss also added that iBiquity is getting $5-$6 for every HD Radio receiver sold. So, you know, requiring that HD Radio technology be included in every Sirius and XM unit sold has absolutely nothing to do with the interests of iBiquity. Nah... it's all "to insure a level competitive playing field," right?

[FCC Filing (PDF), Radio Ink]

UPDATE: Looks like iBiquity met with Commissioner Michael Copps and Rich Chessen of Commissioner Copps’ office as well. [FCC Filing (PDF)]

The ever-important Holiday Shopping Season didn't prove to do much for XM or Sirius last year, as NPD Group's December sales data shows a continued decline.

Combined data shows that satellite radio retail sales were down 37.5% for the month, when compared to December of last year. The sad part is that the comparisons were relatively easy.

The Quick Glance:

• Sirius December 2007 Year-over-Year Retail Sales:
  Down 36%
• XM December 2007 Year-over-Year Retail Sales:
  Down 41%

Marketshare:

• Sirius Dec '07 Retail Marketshare: 68.3%
• XM Dec '07 Retail Marketshare: 31.7%

That's a steep decline, especially when you consider that last year satellite radio retail sales were already down 46%. Looking at retail marketshare at this point is nearly pointless as it's simply a piece of an ever-shrinking pie.

Something needs to change in how we approach retail, because this obviously isn't working. And it needs to change now.

[SiriusBuzz]

Only three weeks into the new year, and members of the FCC have met various parties involving the merger of Sirius Satellite Radio Inc. and XM Satellite Radio Holdings Inc. on eight separate occurrences.

Could this (finally) be a sign that we'll have a decision on the merger soon? Here's a listing of some of the reported activity coming from the Commission:

• January 3, 2008: The CEO of US Electronics (along with counsel) met with Comissioner Copps and his advisor, Rick Chessen. [Link (PDF)]
• January 4, 2008: Georgetown Partners, TSG Capital Group, and King & Spalding LLP met with Michelle Carey, senior legal advisor to Chairman Martin. [Link (PDF)]
• January 7, 2008: Chester C. Davenport, Managing Director of Georgetown Partners met with Commissioner Jonathan Adelstein [Link (PDF)]
• January 7, 2008: Georgetown Partners on the same day also met with Commissioner Michael Copps. [Link (PDF)]
• January 9, 2008: Georgetown Partners and the Reverend Jesse Jackson met with Chairman Kevin Martin [Link (PDF)]
• January 11, 2008: XM and Sirius, along with CRA International, met with representatives from the FCC to discuss the findings of the CRA study which determined that Satellite Radio and Terrestrial Radio are demand substitutes. [Link (PDF)]
• January 14, 2008: Once again Chester Davenport of Georgetown Partners, Rev. Jesse Jackson and Kimberly Marcus (also of the Rainbow PUSH coalition) met with Chairman Kevin Martin, Daniel Gonzalez and Catherine Bohigian. On the same day in a separate meeting: Davenport, Rev. Jackson and Ms. Marcus met with Commissioner Michael Copps, Commissioner Jonathan Adelstein, Rick Chessen and Rudy Brioché. And in yet another meeting Davenport, Jackson, and Marcus met with Commissioner Robert McDowell. [Link (PDF)]
• January 15, 2008: iBiquity CEO Robert Struble met with Commissioner Robert McDowell as well as Angela Giancarlo and Cristina Chou Pauze of Commissioner McDowell's office. [Link (PDF)]

Last month, RBC Capital analyst David Bank predicted that the FCC's decision would likely stretch to February of this year.

"We believe XMSR/SIRI management served up the necessary sacrificial lamb(s) by offering ala carte pricing and openness to variety of other conduct/behavioral conditions," wrote Bank. "However, our sources indicate FCC is likely 1-2 months away from fully fleshing out conditionality such as ala carte pricing, interoperability of radios, unused channel availability to 3rd parties, indecency standards and local content restrictions."

From the looks of these recent meetings, it appears that the FCC is working through those conditionalities right now.

Congressman Luis G. Fortuno, the sole representative of Puerto Rico in Congress, submitted an interesting comment to the FCC today regarding the merger between Sirius Satellite Radio Inc. and XM Satellite Radio Holdings Inc.

He urged the Commission to not approve the Sirius-XM merger, unless the companies include Puerto Rico and other noncontiguous areas of the U.S. as part of their service.

"It is time to change the 1997 policies," asserted Fortuno in reference to the SDARS license and it's 48 state requirement.

Fortuno is also the Chair of the Congressional Hispanic Conference and the Ranking Member of the newly-created House Subcommittee on Insular Affairs.

"My official position is to oppose the merger until such time that the exclusion of Puerto Rico and other noncontiguous United States jurisdictions from coverage area of satellite radio service ceases," wrote Fortuno. "My interest and concern include providing equal access to this technology to all U.S. citizens and encouraging industries doing businesss in the mainland to extend their services to the Puero Rican market."

His sentiment echoes a similar filing (PDF) submitted earlier this year by the Senate of Puerto Rico. The Senate contends that "[s]ince the FCC represents the public interest of all United States citizens... its deliberations should also watch for the interests of the millions of consumers residing in the outlying States and Territories under the United States flag."

As such, they oppose the merger until Sirius and XM provide coverage to Puerto Rico.

Somehow, I can't see allowing Puerto Rico's nearly 4 million residents to sign up to Sirius-XM as being much of a problem.

[FCC Filing (PDF)]

Mercedes-Benz will offer Sirius Canada as standard equipment on many of its vehicles available in Canada.

Sirius Satellite Radio will be offered as standard equipment on all Mercedes-Benz E-Class, S-Class, CL-Class, CLS-Class, SL-Class, ML-Class, R-Class and GL-Class vehicles along with the all new 2008 C350 and C350 4MATIC models. All Mercedes-Benz AMG vehicles will feature Sirius as factory standard equipment as well.

In addition, Sirius will be available as a factory installed option on all Mercedes-Benz B-Class, C-Class, CLK-Class and SLK-Class models.

Sirius-equipped Mercedes-Benz vehicles will include a complimentary 6-month Sirius subscription.

Sirius Canada will also be standard equipment on all Maybach vehicles and will feature a lifetime Sirius subscription.

This is the second part of my experience with ICO mim at CES 2008. Read Part 1 here.

As part of my meeting with ICO Global Communications at CES I had the distinct opportunity to ride in a vehicle outfitted with their Mobile Interactive Media ("mim") service. The vehicle had LCD screens everywhere you looked, all streaming live video direct from ICO mim. The accompanying photos are all taken from within that vehicle.

Since the satellite is scheduled to launch in March, the service was being provided through a terrestrial signal coming from a temporary tower called a COW ("Cellsite On Wheels"). We'll cover more on the COW later.

But first, I know what you're thinking. Is broadcast video really something that the public would want in their cars? Afterall, drivers should be spending their time watching the road, not watching TV. But, it looks like ICO has factored all that in.

For instance, with the advent of polarized screens, drivers can view the GPS navigation interface (provided by ICO mim) while passengers can view the live video content (also provided by ICO mim). In addition, the driver can listen to the video content as if it's a radio (much like how Sirius and XM broadcast the TV feed of CNN, CNBC, Fox, etc). But once the vehicle in is park, the driver can choose to watch sections of the broadcast after the fact - all because the feed is cached much like a DVR/TiVo.

Also ICO mim doesn't just provide mobile video content, it also will offer vehicle assistance similar OnStar. In fact, they pointed out that there is no "star" in OnStar because the service is cellular based - if you have no signal, you have no assistance. ICO mim will provide true nationwide roadside assistance, regardless of whether there's a cell signal.

Navigation capabilities are very similar to what XM and Sirius are rolling out with NavTraffic/NavWeather and Traffic Link. ICO mim will provide real-time traffic and weather alerts, and re-route you based on the conditions ahead.

But there's also an added layer of interactivity.

Using you're regular internet connection at home or work, ICO mim will let you pre-program tasks and activities into your account. Then you can download and access them from your car. So you don't just have the regular points-of-interest on your navigation system, you have personalized data and a custom agenda for use on the road. Pretty cool.

My next question was about content. It's all fine and dandy to have the mobile video capabilities, but that's useless until you have something that people want to watch. That's when ICO told me that they just signed a deal with NBC Universal, and the stream we were watching was live MSNBC. Suddenly this took on a whole new level of reality.

Follow the jump for additional in-vehicle photos (and I do apologize for the blurry shots)...

The US Copyright Royalties Board denied a petition from SoundExchange last week for a rehearing on the royalties agreement between the Board and Sirius and XM Satellite Radio.

"SoundExchange has not made a sufficient showing of clear error or manifest injustice with respect to the gross revenues definition or new evidence with respect to the proposed merger that would warrant a rehearing," reads the CRB's ruling. "To the contrary, SoundExchange's arguments in support of a rehearing or reconsideration are based on the same insufficiency of evidence that caused its similar arguments to be rejected by the Judges in fashioning their Initial Determination."

SoundExchange contends that the Copyright Royalties Board exempted too much of XM and Sirius revenues from the equation. Revenue such as merchandising, which XM and Sirius feel they shoudn't have to pay royalties on (understandably). The decision set a royalty base of Sirius and XM's adjusted gross revenue, starting with 6.0% this year and growing to 8.0% by 2012.

But it's that "adjusted" part that SoundExchange had a problem with. Regardless, the CRB didn't agree, stating that SoundsExchange had "no credible evidence" that these forms of additional revenue had a significant impact on the total calculation.

And so the ruling stands.

[CRB Ruling (PDF) via BetaNews]
Thanks Jerry!