Broadcasters Beasley, Citadel, Entercom, Greater Media, Lincoln Financial Media and Saga Communications have filed a joint filing asking that the FCC consider relaxing ownership restrictions when deciding on the Sirius-XM merger.

"...one essential protection would be the elimination of local radio ownership rules, which would allow AM and FM broadcasters to offer more diverse services to compete with SDARS on the local level."

An interesting concept, and one that's obviously using the satellite radio merger for self-serving interests. The joint filing goes on to suggest a fully interoperable receiver - one that supports terrestrial radio as well as satellite radio - be designed as part of the conditions:

"In addition, the Commission could require, in a manner similar to the television All Receivers Act, or to cable's Must Carry, that all satellite radio receivers be capable of providing SDARS, AM and FM analog, and AM and FM HD broadcast radio signals in order to facilitate more direct competition among service providers."

Now that's actually not a bad idea. Not only would it foster more direct competition, but would also move a lot more product off the shelves. Plus we all know that satellite radio subscribers tend to listen to terrestrial radio more than "regular" listeners, so that's just empowering the consumer. Never a bad thing.

But let's take it a step further...

It's obviously hypocritical for terrestrial radio to oppose the merger while at the same time seeking a relaxation of media ownership regulations. And at the same time, it's hypocritical for satellite radio merger proponents to oppose media ownership regulations (though - it can be argued - that there's already been a relaxation in media ownership rules, which is why we're in this mess to begin with).

But what about localism? There also shouldn't be a restriction on satellite radio from providing local programming. Why does the "government sanctioned monopoly" shoe only fit for satellite radio - when terrestrial radio has been enjoying a monopoly on local broadcasts since the 1930s?

And at the same time, let's apply the same performance fees to artists that satellite radio and internet radio pay. Why does terrestrial radio get a free ride? Do they provide more "promotional value" than satellite or internet? I don't think so.

If they want a level playing field - then let's give it to them.

[Read Joint Filing (PDF) via Yahoo! Message Boards]
Thanks Tony!

A comment was recently submitted to the FCC in response to Entravision's comments, disputing the concept that there is a binding rule preventing Sirius and XM from merging.

The reply comments, made by a self-described "citizen and consumer," were sent in response to Entravision's comments (the one where they nobly offered to take, and use, the other half of the satellite radio spectrum) and uses Entravision's own language against them:

According to Entravision, the use of “will” in the ‘Transfer” language section of the 1997 SDARS Report & Order restricts Commission discretion with respect to decisions in the SDARS merger context. If this were true, the Commission would be restricted from exercising discretion while conducting their review of the Consolidated Application and would be bound to the provisions of rule 25.118 which identifies the exception allowing a transfer to be authorized and completed. Yes, in fact, the 1997 SDARS Report & Order states:

We note that DARS licensees, like other satellite licensees, will be subject to rule 25.118, which prohibits transfers or assignments of licenses except upon application to the Commission and upon a finding by the Commission that the public interest would be served thereby.

In other words, Entravision's interpretation of the rule were held true, then the FCC would have to recognize the authority of rule 25.118, and proceed forward.

The NAB's entire arguments against the satellite radio merger are largely based on the prohibitive language in the Transfer section of the 1997 license. But they ignore the language of rule 25.118.

The question is, does rule 25.118 override the entire ‘Transfer’ language section of the 1997 SDARS Report & Order? And since it appears to be internally conflicting, is the whole 'Transfer' section itself non-binding?

This seems like a pretty significant determination to me.

[Read Reply Comment (PDF)]

FCC Commissioner Michael J. Copps appeared on PBS' Bill Moyers Journal recently to discuss the state of media consolidation and the current outlook of the media today.

As always with Commissioner Copps, media consolidation is a sore point. He's never been a big fan of media consolidation (neither has Adelstein), but the interview still remains enlightening throughout the 19 minutes.

They start off the interview showing a clip from one of the recent public hearings on media consolidation:

MICHAEL J COPPS: Now we're back at square one. It's all up for grabs. And if we are going to do better this time around, it's going to be because of input from folks like you.

MIKE MILLS: We must ask the question, is American radio better today than it was 10 years ago? [Audience yells "No!"] ...that was the answer.

A key takeaway from the interview isn't that Copps is against media consolidation just to be against it, he takes the stance that it generally doesn't work towards the public interest. Copps defines "public interest" (which can be up to much debate) as three things: localism, diversity, and competition.

He also reiterated his stance on the shortening of broadcaster's license renewal process (something he brought up strongly during an editorial he wrote which was published in the New York Times).

While Copps doesn't directly address the Sirius-XM merger, it's a good interview to watch to get a sense of where he might stand. I think most would agree with his viewpoint. Question is - in trying to serve the public interest - what effect would a merged satellite radio service have on terrestrial radio in terms of localism, diversity, and competition?

[Watch Video or Read Transcript]
Thanks Bruce!

The National Association of Broadcasters (NAB) has formally issued an apology to the FCC for the misrepresentation of two Congressmen as being opponents of the Sirius-XM merger.

Representatives John Conyers, Jr.(D-MI) and Steve Chabot (R-OH) were listed in four separate ex parte filings among parties who were opposed to the satellite radio merger.

In the letter to the FCC, the NAB wrote:

"While both members have raised questions about the merger, it is inaccurate to characterize them as opposed to the merger. We apologize for any confusion this may have caused."

The filings in question cite a similar document that had listed Toyota as being opposed to the Sirius-XM merger, a point that Toyota objected to in a response filing to the FCC. The NAB subsequently removed Toyota from the "growing chorus of widespread, diverse opposition."

Apparently they will need to remove Rep. Conyers and Rep. Chabot as well.

[Read Letter (PDF) via SiriusBuzz]

FCC chairman Kevin Martin increased his vocal fight for a la carte cable programming in a letter sent to several minority groups yesterday, arguing that it would actually assist poorer minority groups.

Martin cited a Nielsen study pointing out that the average cable subscriber was paying for 85 channels, while that consumer really is only watching 16 channels. (I wonder if the same applies for satellite radio?)

"Channel choice is increasingly significant to consumers as the number of channels included in expanded basic, and the corresponding price to consumers, has continued to skyrocket," Martin wrote. "Indeed, cable rates have more than doubled in the last ten years. Cable companies often point to the increased number of channels being offered as an explanation for the increase in prices. This explanation, however, ignores the fact that most of these channels are not actually being watched.

"While I believe all consumers would benefit from channels being sold in a more a la carte manner, minority consumers, especially those living in Spanish speaking homes, might benefit most of all," Martin said.

Consumers typically have to buy large, expensive blocks of channels to access Spanish-language channels, he said.

Martin's letter was sent to the Black Leadership Council, the Hispanic Federation, the Labor Council for Latin American Advancement, and the League of Latin American Citizens, among others.

Earlier this month Kevin Martin said he was "pleased" with the proposed Sirius-XM a la carte pricing plan.

While Martin's support for a la carte has been well known for sometime, this clearly shows his feelings that it extends past the issue of simply "price," and reaches the overall issue of diversity in media. Sirius and XM's proposed a la carte pricing plan can act as a springboard for a la carte in the rest of the media industry in my opinion. Not only setting a precedent, but can even be shown as a working prototype to cable companies that the business model can actually work.

The FCC has an opportunity here. I hope they don't just let it slip through their fingers.

[Fox News]
Thanks Squeaky Wheel!

RadioShack has chimed in and submitted comments to the FCC voicing its support for the Sirius-XM merger.

In a letter dated for July 13th (it just went live in the FCC's comment system today), RadioShack stated that they "believe that a merger of Sirius and XM will benefit consumers, including those that purchase satellite radio products and services from RadioShack."

"Today, consumers with an interest in satellite radio must either: (1) choose between Sirius and XM, foregoing some of the most appealing channels available on the other service or (2) subscribe to both services, which means purchasing two satellite radios and paying for two subscriptions."

For merger hopefuls, it's good news to see the support of retailers like RadioShack (and Circuit City who also has come out in favor of the merger of Sirius and XM). If retailers came out in large numbers opposing the merger - since they're in the frontline, interfacing directly with consumers - then that would spell the death of the merger.

"Public interest" also directly equals "sales," and retailers are truly motivated by one thing: moving product off the shelves.

[Read Comment (PDF)]

UPDATE: I'm trying out a new feature to make PDFs more easily readable... so try viewing RadioShack's comments after the jump, and please comment if you'd like to see this in the future.

The NAB has sent a follow-up letter to the FCC after meeting with Commissioner Jonathan Adelstein, Rudy Brioché, and Christopher Naoum on Tuesday. The meeting was a follow-up of its own to discuss the NAB's "analysis" of Sirius-XM's A La Carte pricing.

In the letter, they list the US Senators and Representatives who voiced opposition to the merger, as well as other groups/individuals (like C3SR and American Antitrust Institute among others).

And they again depict Toyota as being on their side. They even add the following footnote:

"Even long-time XM partner Toyota expresses concerns that an XM-Sirius merger may harm
audio quality and consumer interests."

Wow. Seeing how Toyota reacted to the first "mischaracterization," I wonder how they'll react to this?

[Read letter (PDF)]
Thanks Tim!

The NAB selectively quoted from Toyota's merger comments in a letter they sent to the FCC, and Toyota apparently is not happy about it, calling it a "mischaracterization" in a letter to the FCC.

Toyota's July 9th filing stated "with a finite bandwidth for both XM and Sirius, it may be difficult for a combined entity to deliver more content while maintaining or even improving audio quality."

The NAB took this to mean that Toyota "expresses doubts whether the merger is a good idea." (The letter in question of course, is the famous "sow's ear" letter.)

But Toyota said no such thing, and never meant to express any such doubts about the merger. An attorney representing wrote in a response to the FCC that "Toyota wishes to clarify any confusion that may result from the NAB’s mischaracterization of our comments."

"Toyota intended to reiterate that satellite radio bandwidth continues to limit audio quality," wrote Toyota's attorney. "This is a concern irrespective of the number of satellite radio providers, and was not intended to suggest that the problem would be worse with a single provider should the merger be approved."

"Toyota’s comment should not be read to suggest that this concern raises any doubts for Toyota as to whether the merger is a good idea."

[Read Letter (PDF) via SiriusBuzz]

The Hill has a good recap of the NAB's latest smear campaign against satellite radio that highlight's the FCC violations of past.

NAB spokesman Dennis Wharton called the infractions "brazen," arguing that they cast light on whether the merged company can be relied upon to adhere to any merger guidelines.

"If you're asking the government to give you a monopoly, you ought to be as pure as the driven snow in your practices and your communication with the government," Wharton said.

Of course, it's not like the NAB's darling technology, HD Radio, isn't without it's own problems. Not only do experts claim that HD Radio broadcasts interfere with adjacent stations (such as low powered mom and pop stations). But it looks like some wacky HD Radio stations are magically changing the channel for you.

It's not the radio's fault - it's the HD Radio signal. Nah, let's just ignore all that. Instead, let's kick and scream and call for FOIA requests.

"The NAB is abusing the FOIA process," an XM spokesman told The Hill. "The FCC already has all of the information that the NAB is seeking, and under well-settled precedent, these enforcement matters have no relevance to the FCC’s merger proceeding."

"The NAB will do and say anything to try to block the merger of XM and Sirius," said a Sirius spokeswoman. "As more and more consumers voice their support for the merger of XM and Sirius, the more fearful of increased competition the NAB becomes and the more desperate their actions in response."

'nuff said. 

[The Hill]