That's the basic thought that is being floated around on Seeking Alpha today. The long-winded article essentially comes to the conclusion that the delay in reaching a decision on the merger between Sirius Satellite Radio Inc. and XM Satellite Radio is a result of "the FCC's determination to establish its authority."

It's an interesting theory, though I'm not so sure that the rest of the article gives it much validity (it's filled with obvious statements). Here's the basic gist of it:

"...this publication continues to perceive this merger as arguably the defining moment for the current and future FCC. Any approval that fails to enforce the FCC's authority via significant conditions beyond those proposed by the companies will effectively result in the FCC being labeled a 'rubber stamp' regulator for years to come -- at least with respect to major license transfers."

In other words - from a 50,000 foot view - the FCC is hemming and hawing over this merger in a way to as to impose a sense of its authority.

Ultimately, M&A Research (the author of the article, who has historically been uber-conservative in their predictions over this deal), feels the FCC "will impose conditions which will force the companies to either submit to unwillingly or to reconsidering the combination altogether."

I don't know exactly how correct it is - but it's a curious thought to entertain. What's your opinion? Why do you think the FCC is taking so long?

[Seeking Alpha]

Public-interest groups Public Knowledge and Media Access Project want to make sure the FCC understands their position on the Sirius-XM merger in light of a recent letter from Chester Davenport the Managing Director of Georgetown Partners.

While they confirmed that they did indeed meet with Georgetown Partners, the groups reiterated that they "take no position with respect to [Georgetown Partners'] specific proposal that 20% of the merged XM/Sirius company's spectrum capacity be leased on an arms-length basis to an independent entity."

"This approach could be a useful supplement to, but not a substitute for, the 5% non-commercial, educational set aside," they state in their letter to the FCC.

Should the Federal Communications Commission determine that Georgetown's proposal is in the public interest, both Public Knowledge and Media Access Project support the minority-owned group's proposal to assist non-commercial, educational programmers.

Both Public Knowledge and Media Access Project have proposed that roughly 5% of broadcast capacity from a merged Sirius Satellite Radio Inc. and XM Satellite Radio Holdings Inc. be dedicated to non-commercial and educational programming, of which Sirius-XM have no editorial control.

Georgetown stated in its letter to the FCC that they would agree to the proposal to set aside 5% of their own capacity for non-commercial, educational  programming. Additionally, they stated that there might be "technical barriers" that would hinder this content from being delivered to a merged entity and proposed a plan to overcome these so-called barriers.

In the filing, the public-interest groups conclude:
"In the interest of clarity, [Media Access Project and Public Knowledge] wish to state that neither they nor any person or organization associated with them have requested or received consideration of any kind from [Georgetown Partners] or any person or organization associated with them in exchange for their willingness to submit this letter of support."

[View FCC Filing (PDF)]

Following their marathon of meetings with the FCC, Primosphere wants to make clear its position on the ownership of spectrum: they don't want to just lease spectrum, they want the spectrum licensed to them.

"Primosphere is not looking to 'lease' a portion of the DARS spectrum," the company writes in a recent filing with the agency. "Rather, Primosphere is asking that its pending application be granted in part so that Primosphere will be a licensee of the DARS spectrum. Furthermore, Primosphere hereby restates it proposal... to offer free DARS service."

According to the filing, if the FCC approves the merger between Sirius Satellite Radio Inc. and XM Satellite Radio Holdings Inc., Primosphere urges the agency to simultaneously license a portion of the DARS spectrum to the company.

"Primosphere's proposed free service will ensure that consumers have an alternative to the combined XM/Sirius," the letter concludes.

[View FCC Filing (PDF)]

Georgetown Partners, the minority-owned firm that analyzes FCC regulated markets "for opportunities to extend minority ownership and control," recently met with public interest groups to discuss set aside provisions of Sirius-XM spectrum, according to a recent filing.

The privately-owned firm, headed up by Chester Davenport (pictured), is asking the Federal Communications Commission to require that 20% of Sirius-XM's broadcast infrastructure be leased to a "independent new entrant."

In a letter to FCC Chairman Martin, Davenport outlined his meeting with public interest groups Public Knowledge and Media Access Project. Both groups have suggested to the FCC that 5% of spectrum from a merged Sirius Satellite Radio Inc. and XM Satellite Radio Holdings Inc. be dedicated for non-commercial, educational programming.

Georgetown Partners agrees that the proposals by Public Knowledge and Media Access Project (as well as its own) would indeed "benefit consumers and serve the public interest." But Davenport feels that there are "technical barriers" that would hinder this content from being delivered in the digital format and bandwidth necessary, according to the letter.

As a result, Georgetown laid out a plan to "further the public interest objectives" shared by the groups. They include:

• Georgetown will "accept delivery of the program streams" in an agreed manner
• Will "at its own expense" encode the programming into the required digital format
• And finally will "transport and deliver" the programming, along with its own programming, to the merged entity.

All costs for the acceptance, encoding, and delivery of programming would be graciously absorbed by Georgetown Partners, according to the letter.

Chester Davenport highlights that their plan would be to broadcast satellite radio programming to all receivers - subscribers or not - and so would further the objectives of Public Knowledge and Media Access Project.

"We estimate that today there are 36 million such receivers in the marketplace, of which roughly 50 percent, or 18 million, are not subscribed," writes Davenport. "Implementing any educational set-aside in this manner will double the potential audience for the non-commercial programming."

Finally, Davenport feels that the educational set-aside is separate and distinct from Georgetown Partners' own 20% proposal. But if both proposals are realized, Georgetown "will dedicate resources to make sure that the non-commercial educational uses become reality."

[Read the entire letter (PDF)]
Bonus: Listen to yesterday's Orbitcast Radio show featuring Public Knowledge co-founder Gigi Sohn where we briefly discussed Georgetown Partners' proposal.

A smattering of Attorneys General spent roughly 45 minutes on the phone with FCC Commissioner Jonathan Adelstein, on Wednesday, voicing their concerns about the merger between Sirius Satellite Radio Inc. and XM Satellite Radio Holdings Inc.

According to a WSJ blogpost, Rob McKenna Washington State's Republican AG and Connecticut's Democratic AG Richard Blumenthal joined assistant AGs from 8 other states to press the commissioner to vote against the deal, or at the very least, place tough conditions on it.

They also expressed concern about the lack of an interoperable radio that would work with both services, as well as the "significant harms" that would result from "the loss of a direct competitor."

"The states further explained that the lack of an interoperable radio is emblematic of the licensees' disregard for competition and consumers and urged that the licensees should be required to make the intellectual property for an interoperable receiver freely licensable and available for manufacturers and standards setting bodies," wrote the Attorneys General in a recent ex parte filing.

"The attorneys generals have a number of serious concerns," said Adelstein sharing their concerns. "They have a feeling that the Justice Department did not pay proper deference to their concerns when it issued its opinion ... In this case, those concerns were dismissed and there was no proper audience given to the attorneys general."

"I think it is important that the FCC, after such dismissive treatment by the AGs, take extra consideration on the very legitimate concerns that the attorneys generals are raising," Adelstein told reporters.

When asked how he planned to vote on the merger, Adelstein said it would depend on how the deal was conditioned.

[View FCC Filings (PDF) via WSJ Deal Journal, Broadcasting & Cable]

Representatives from Sirius Satellite Radio Inc. and XM Satellite Radio Holdings Inc. continue to have meetings with the Federal Communication Commission, indicating that the process is moving forward (though, arguably at a snail's pace).

The meetings between the companies and the FCC, predictively, began to increase pace after the Justice Department's approval of the merger. Prior to the DOJ's announcement there was little activity between Sirius-XM and the agency in terms of meetings, according to FCC filings.

In April, the companies collectively held a total of five meetings with the Commission - one of which was done over the phone.

In this month alone there have been three meetings held at the FCC's offices, an early indication that talks between the two are increasing frequency - and possibly nearing an end.

Yesterday, representatives from Sirius and XM met with FCC Chairman Kevin Martin, Daniel Gonzalez, Catherine Bohigian, and Elizabeth Andrion. A prior phone meeting on Tuesday, was held between XM Satellite Radio (sans Sirius) and Amy Blankenship, Legal Advisor in Commissioner Tate's office. Last week, Sirius and XM met with Chairman Martin.

None of the recent filings have given any additional details other than that the companies have reiterated their positions and "urged prompt approval of the pending merger."

[View FCC Filings: 1, 2, 3 (PDF)]

FCC Commissioner Deborah Tate's office met with the Minority Media and Telecommunications Council (MMTC) on Wednesday, according to a recent filing.

Commissioner Deborah Taylor Tate and Amy Blakenship, Legal Assistant to Commissioner Tate discussed the merger of Sirius Satellite Radio Inc., and XM Satellite Radio Holdings Inc. even though MMTC has not filed comments on the merger.

This is where it gets interesting: MMTC said they do not have plans to file any commats this time "as the merger does not appear to have a direct, specific impact on minority ownership policy."

Regarding the proposal endorsed by Congressmen Towns (albeit, later retracted) to set aside channel space for leases for minority ownership, MMTC said that "the Commission should bear in mind the greater difficulty minorities face when leasing rather than purchasing assets. Therefore, the Commission should examine the specific terms of the proposal for longevity, uniqueness, and financial sustainability of the contemplated operation."

That's a very interesting take, and quite the departure from other minority groups who have presented in the past.

[View FCC Filing (PDF)]

Senior House Energy & Commerce Committee member Bobby Rush (D-IL) has backed out of a letter about the Sirius-XM merger he had co-signed to FCC Chairman Kevin Martin only the day before.

Rush, along with Rep. Edolphus Towns (D-NY), stated in the original letter that they had "fully supported" Sirius' and XM's voluntary commitment to dedicate eight channels for minority ownership.

In a separate letter a day later, Rush now says that he and Towns had a "miscommunication," and that while he advocates setting aside channels for minority ownership, he says eight channels aren't nearly enough.

"While I certainly believe it's important to dedicate channels for minority ownership, I do not believe a mere eight channels out of 300 total in the combined entity represents an 'important and realistic effort to address the dearth of minority ownership'," writes Rush.

"I firmly believe that XM and Sirius can designate far more channels than eight for minority ownership" he added, suggesting a number of channels closer to the 35% of the population that "people of color" represent.

While still a supporter of the merger, Rush says the 8-channel set-aside fails to satisfy his "advocacy for a more aggressive policy that emulates the real diversity of the American public."

[Broadcasting & Cable, Radio Ink]

Primosphere was profiled recently on Radio & Records about their latest attempts to get back into the industry as part of the Sirius and XM merger.

Partners Cliff Burnstein and Peter Mensch, who also operate Q Prime in New York, told R&R that they want the FCC to live up to the original rules and have at least two different license holders. And they want to be one of them. 

The company was one of the original SDARS bidders alongside Digital Satellite Broadcasting Service, CD Radio and American Mobile Satellite Radio Service. Each paid the government $70,000 for two "satellite slots," recalls Burnstein. But while CD Radio and American Satellite, which became Sirius Satellite Radio Inc. and XM Satellite Radio Holdings Inc., ultimately won the spectrum, Primosphere never had its original $140,000 deposit returned, according to Burnstein.

On the current proceedings, Burnstein told R&R he could not get a read on the FCC merger decision based on its recent meetings, but it was clear to him that FCC officials are "uncomfortable with a single provider."

What about the minority owned Georgetown Partners? They have had a similar request and numerous meetings with the Commission, but Burnstein says: "they don't have any standing in this."

"We have a legal standing even if it is by a thread," he said, adding that Primosphere doesn't need funding and could be up and running with newly built studio space within six months. However, Primosphere would need the merged entity lease some technology for uplink and downlink capability for its programming to satellite receivers.

Primosphere's programming would be advertising-based and would offer about 30 channels of mostly music programming, forecasts Burnstein. He says Primosphere's "will come at this from a music and programming perspective."

Burnstein's goal - while admittedly "a little bit idealistic" - is "to serve the underserved."

[Radio & Records]

According to a report by George Reed-Dellinger of researcher Washington Analysis, Sirius Satellite Radio Inc. and XM Satellite Radio Holdings Inc. have pledged to lease eight channels to minority owners.

The source of the information comes from a letter from minority congressmen on the House Telecommunications Subcommittee today, who reportedly praised the concept.

At the time of writing this, the letter has yet to be posted to the websites. A link will be provided when the letter is made available.

Reed-Dellinger feels this will help defuse the more aggressive proposal by privately owned Georgetown Partners, which has asked the FCC to require approximately sixty channels for minority programming.

In his recent letter to the FCC, House Commerce Committee Chairman John Dingell (D-MI) asked for restraints on pricing and open device access. Dingell did not ask for the divestiture of spectrum.

Washington Analysis feels that this more recent correspondence from the Democratic Congress lends additional support to FCC Chairman Martin in moving the approval forward. The Democratic Commissioners may have been considering Georgetown's proposal, but if the companies are indeed offering to lease eight channels for minority ownership, this could diffuse the issue.

"We expect a draft order can now be pieced together and voted on 'circulation' as opposed to a May 14th open meeting vote," added Reed-Dellinger.
 
Sirius and XM declined to comment on this issue at this time.

[SiriusBuzz]