Pioneer of North America has joined the masses of folks meeting with the FCC over the Sirius and XM merger. But it wasn't the merger specifically that they wanted to talk about.

Indeed, they had a bone to pick with iBiquity, the government sanctioned monopoly purveyor of HD Radio technology.

Remember, iBiquity wants the FCC to mandate that Sirius-XM include HD Radio chipsets in all satellite radio receivers. iBiquity expressed "concern" over the competitive implications should the merger be approved.

But Pioneer, who knows a thing or two about receiver manufacturing, doesn't see it that way. And they were sure to express this to Elizabeth Andrion, the Legal Advisor to Chairman Martin.

"The iBiquity conditions would limit the breadth of radio product offerings to consumers, limit which radio component suppliers' products be designed into radios, have the effect of decreasing AM/FM tuning performance, unnecessarily increase costs to consumers uninterested in HD Radio and interfere with the useful and healthy free market mechanisms extant in radio electronics purchases," writes Pioneer.

The company continues: "Consumers should be allowed to choose radios which meet their needs, without undue government influence."

"It is our belief that HD Radio should compete in the marketplace with other radio services: if free local digital terrestrial radio services are compelling to consumers, HD Radio technology will succeed in the marketplace."

"In this case, the free market is the best measure of the public interest."

Take a bow Pioneer, because that was extremely well said.

[Read FCC Filing (PDF)]

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]

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]

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]