Clear Channel outlines Sirius-XM merger concessions - Orbitcast

Clear Channel outlines Sirius-XM merger concessions

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Clear Channel

Clear Channel Communications, Inc. outlined its most detailed concession requirements, in a filing with FCC posted today, should the Commission approve the merger between Sirius Satellite Radio Inc. and XM Satellite Radio Holdings Inc.

While earlier FCC filings have essentially reiterated Clear Channel's prior argument that granting the merger would permit for too much spectrum control for a single entity, the filing posted online today gives the most level of detail about merger concessions.
"Were the Commission inclined to approve the merger, nonetheless, it should, at a minimum, impose the following conditions that would be essential to remain even remotely faithful to Commission precedents and policies regarding competition, spectrum and preservation of a viable, locally-oriented, free, over-the-air radio broadcast system," the company wrote in an ex parte filing.
The merger conditions that Clear Channel is requesting include:

  1. No less than 50% of broadcast capacity be made available for lease to create "a viable competitive alternative" to the merged company.
  2. No less than 5% of capacity be set aside for public interest programming, modeled after the 4-7% requirement for DBS services. (This, interestingly enough, is identical to Public Knowledge's requests.)
  3. That Sirius-XM be subject to indecency regulations. Because, "one of the primary potential dangers to free, over-the-air radio posed by this merger is siphoning popular, including 'edgy' content, with consequent loss of advertising revenue."
  4. Sirius-XM be prohibited from broadcasting local content, (this goes against Public Knowledge's requests).
  5. Following #4, Sirius-XM be prohibited from receiving local advertising revenue.
  6. And finally, the FCC require that HD Radio capabilities be built in to all satellite radio receivers. (Similar to iBiquity's most recent filing, except that they seem to specifically target OEM installations.)
There seems to be more and more unifying requests coming from the opposition, and proponents, of the Sirius-XM merger. The fact that Clear Channel has overlapped with both Public Knowledge's and iBiquity's requests isn't insignificant. But whether or not the FCC will follow suit is another matter.

(Photo courtesy of jrbrubaker). View the full filing after the jump...

Read this doc on Scribd: retrieve


If you can't see the above document, you can view the PDF here.

38 Comments

Screw Clear Channel and their milquetoast, repetitive crap music. Screw BusinessBoys interfering with art. Screw over-zealous PC morons. Screw those agaist free-speech. ARGH! Pardon me...

Pardon the hissy fit.

Translation: Sat radio needs to suck, so make it more like us and we approve it. If DOJ / FCC caves to these requirements, then they will destroy the merger by approving it.

Clear Channel blows.

Don't forget - The ones who asked for this merger were the satellite radio companies. It is THEY who threw their licenses into the hat. No one would have asked for any of these concessions had the two licensees gone about their business of fair competition and had they not ignored the original conditions of license which prohibited merger.

It's the BusinessBoys who destroy all that is good. Choke on your money.

>>> Don't forget - The ones who asked for this merger were the satellite radio companies. It is THEY who threw their licenses into the hat. No one would have asked for any of these concessions had the two licensees gone about their business of fair competition and had they not ignored the original conditions of license which prohibited merger.

Precisely. XM and Sirius can withdraw their merger application tomorrow and the problem is solved. They are asking for a monopoly which is counter to the conditions under which they accepted their licenses.

CCU is everyone's favorite enemy. But they make a valid point -- you're putting all the spectrum in Mel Karmazin's hands -- but FCC won't allow CCU to have all the terrestrial radio in one locality. Why should they NOT complain about that?

Lol. Let me get this straight...Clear Channel wants them to lease 50% of the airwaves to terrestrial radio....yet at the same time forbid them from doing any local programing???....THEN they want to FORCE the combined PAY service to abide by the same indecency laws that regular radio does???

Um...excuse me for a second. LOL!!!!! BWA-HA-HA-HA! HA HA HO HO HEE HEE HA HA HO HO!!!!!

Gimme a FRIGGIN BREAK! Is Clear channel smoking crack while sniffing ammonia between hits of acid???

That has got to be the most insane list of demands. They can't be serious.

If terrestrial radio is this huge monolith...why don't they shoot up their own damn sattelitte?

These demands will never happen. But they were good for a few laughs. :-)

Regan, I wouldn't laugh too hard if I were you. Chances are not all, but some of these are very likely to be the conditions of merger. And where does it say that they have to lease 50% to "traditional radio?"

I am against this merger and think that crap Clearchannel is saying is BS.

I love the arguement regarding the "original licensees" stipulation of not combining. How long ago was this rule established? Didn't the guy who actually proposed and put the very words into the license, openly support the merger?

Why is it we can ammend the US Constitution as circumstances change, but heaven forbit, alter terms for a couple satellite radio companies as the entertainment horizon changes....How dare we?

Has anyone noticed that everyone except XM and Siri and the shareholders are profiting from this merger effort?

How utterly surprising!

What's wrong with this?

A) Satellite radio has more controls for parents (and those who don't want to listen to those stations) with Parental Controls. If, for example, "Sally" doesn't want her daughter to hear XM Raw when the rambunctious tot should be hearing XM Kids, she just calls up XM and has the XL channels blocked on that receiver. It wasn't forced upon them. Besides, parents need to watch their kids anyways. Isn't CC and the other NAB ass clowns against big government telling them what to have on their airwaves?

B) Satellite radio (or any other medium) shouldn't be forced to be told what they have to carry. No one really listens to public interest shows besides the Jesse Jacksons and Al Sharptons of the world. They have no purpose other than to fill 20 minutes of ad time no one wants to buy (not even the gazillon Bowflex infomercials)

C) Clear Channel needs to find a better hobby than trying to ruin other industries. I hear meth can give you something to do on those empty schedule days. Not my fault your company has no real tangible value so you have to sell off the company to private investors. Their "free" service isn't going to be profitable in the future.

Clear Channel shouldn’t be dictating what another company should have to do but the merger should not be allowed. I don’t know what is taking them so long to make a decision. It was specifically stated in there licenses that there must be two satellite radio companies. Right there should eliminate any possibility of a merger unless another satellite radio company is ready to compete against a merged XM/Sirius. Competition is an excellent thing. I don’t feel good about one satellite radio company being the only satellite radio provider.

Im not 16...why the fuck cant I listen to free speech on my radio I paid for...................................................................................The only real argument I see at this point is the fact that the orignal contract states they can never merge as one...other than that, this Clear Channel filing should have cleared up any doubt that competition does exist. Forget about ipods, and cd players and all that....that is not competition...............But when you demand HD RADIO be implemented into another product.........................wtf, one must ask why.

Since when did Clear Channel get the right to approve this merger? This merger should have been approved in 2007. Terrestrial radio is going way of the dinosaurs....one way or the other.

Since when did Clear Channel get the right to approve this merger? This merger should have been approved in 2007. Terrestrial radio is going way of the dinosaurs....one way or the other.

@Scott - just so I will know for the future, when is it that the words on a license become "too old," and thus have no meaning anymore? Two days? A week? A year? Five? Do you know what would happen to a Clear Channel radio station if they ignored the terms of their license for one of their radio stations? They would be cited, possibly fined, and possibly lose their license to operate their station. Why should the satellite radio operators be any different?

I want two different kinds of HD radio they should not be allowed to force the IB system on the public with no other choice. The IB system is not the only one available.

Sat radio does not cause any interference to other radio the IB does and any station causing intreference to other stations should face loss of licence.

All satellite radio must use satellites owned by them.

All radio stations must have no more than 50% non local programing.

No radio station may carry ads for national companies.

National ads would be for satellite only.

ISN'T CLEAR CHANNEL COMPETITION TO SATELLITE RADIO??

ISN'T CLEAR CHANNEL COMPETITION TO SATELLITE RADIO??

>>>>>>>> I love the arguement regarding the "original licensees" stipulation of not combining. How long ago was this rule established? Didn't the guy who actually proposed and put the very words into the license, openly support the merger?

The rule was established for a reason. Nothing has changed that alters the rationale for it, and like other contract terms, the parties to the agreement ought to plan to deal with them or ought not enter into the contract.

As to the rule: If FCC didn't mean what it said, it shouldn't have said it. That some participant at the time is now changing his mind for who-knows-what-reason (which might include compensation from one or more of the parties) is pretty much meaningless.

Clear Channel Says XM-Sirius Merger's Fine -- As Long As It Can Buy More Terrestrial Stations
http://www.techdirt.com/articles/20070716/092751.shtml


The Clear Channel merger was approved easily.....it's okay if Clear Channel is a monopoly.

If HD Radio was forced onto SIRIUS / XM radios it would kill satellite radio and Clear Channel knows it. That is how bad HD Radio is.

Stack, time to get over this 'Rules are rules and always will be'. When I started in the business, if you were a directional AM station, you needed a First Class Operators license to run the place, and had to take meter readings every 30 minutes. Now you mail in your boxtop and probably never log readings....in fact it's against your interests to keep a log because an FCC inspector can look back at old logs for retroactive fines....but if there's no log, he can only look at the current conditions.

If the FCC wants to approve the merger, they will change the rules as has been asked of them and that will be that. I'm not for the merger, but squealing about the rules is pointless. The FCC has been writing the rulebook in pencil for as long as I can remember. (Gawd, before I got in the business I saw old rule books that listed what required spare transmitter parts you had to have on hand....and if you didn't have those tubes....they could fine you....wanna go back to that level of regulation ?)

The idea you have nothing has changed in the last decade is ignoring what's in the market today.

As to Clear Channel's desired conditions. They are a wish list. They know they won't get most of this. What I find surprising is that they did not ask for the obvious things they could get because the companies have offered them. No insistence on price controls, a la carte, rebates for blocking adult programming. Of course they want no adult programming... if they can't do it no one should, I suppose.

I just hope that Mel and Gary are not in such a hurry to merge that they don't evaluate any concessions in terms of the long term business. Let's read this before we sign it guys.

This is weird, insofar as CC owns a significant

The Clear Channel forward sales agreement with Bear, Stearns & Co. Inc is set to expire in 2008, at which time Clear Channel is expected to deliver to Bear Stearns over 8.3 million shares in XM — which is their original investment — however Clear Channel withholds the right to settle with cash. If Clear Channel settles with shares, then it would be expected at that time that Clear Channels' Operational Assistance Agreement with XM would terminate, along with any and all programming provided by Clear Channel.stake in XM

That wreaks of desperation. I'm surprised that list didn't ask for PLO prisoners to be liberated from an Israeli jail...

Doesn't ClearCriminal own 1168 stations? That should be the limit for Sirius, as well.

While you're at it, why don't you guys audit ClearCriminal's software licenses. They have more cracked versions of Cool Edit Pro/Audition and SF around those studios... you can't swing a dead cat in their studios without hitting machines with unlicensed stuff.

I agree with a previous comment, it wreaks of DESPARATION. Comming now, right before the decision. It is obviously a stalling tactic. Approval must be imminent. Clear Channel should be sued.

Sirius-XM be prohibited from broadcasting local content, (this goes against Public Knowledge's requests).

The FCC is here to protect consumers from a possible monopoly. How does this stipulation ever protect a consumer? It obviously only serves to protect CCU. When hurricane katrina hit, XM gave out receivers to emergency workers and created a dedicated channel to help FEMA and Red Cross get news out because traditional radio towers were obviously destroyed in the area. That is local content and it would be a clear violation of this proposed statute. Unbelievable greed.

Well CCU want concessions. Well, um who are they to be demanding concessions. However, if concessions need to be made #1, #3-#6 sound like their not even thought of to beneifit the consumer, it seems they are there to benefit CCU and terrestrial radio. and if they are in the deal, I would expect Mel and company to walk

This will sound funny, but I do think the "Stack Pointer" comments are valid. I think having a devil's advocate for banning the merger is a good way to stimulate discussion. However, I think that the arguments he makes are indicative of just how ludicrous banning the merger is. The idea of honoring an original rule makes no sense as rules evolve over time, otherwise you would see Jim Crow laws still in place. The idea of a monopoly only works if there is no other viable alternative, otherwise BlueRay would be a monopoly on video entertainment at this point in time. The idea of leasing bandwidth or selling it would make sense if companies like Clear Channel were limited in their segment of the audio spectrum which is clearly not the case. The notion that a luxury item could ever be monopolistic is ridiculous, if Sirius raises their prices to 24.99 a month, I would likely not subscribe.

So, seeing as how these are chief arguments against the merger, it looks like kind of an open and shut case for the FCC if they ever hope to insinuate there are no pockets being lined. Also, I saw Jon Jacoby yesterday giving hand-jobs to guys in the 59th St/Columbus Circle stop. 50% off if you wear something with XM on.

@Murphy - give that argument a try sometime if you are stopped for going 45 in a 25 mile an hour zone. Tell the cop "That's an OLD SIGN and things have changed since it was put up." See how far you get making that argument. These were conditions of license, put there for a reason. They said specifically that these licenses weren't to be merged. Is there something there that is difficult to understand? Therefore, the merger should be denied. As you would say, it's open and shut.

The Clear Channel execs just need to shut their mouths. If there isn't a bigger example of a monopoly, it's them. As far as being subject to indecency regulations, I'm paying for SatRad for that very reason. I want to hear the swear words and edgy material. I want to hear DJs curse if they so choose and shock jocks to their great radio. If I wanted to listen to boring radio, I'd tune into Clear Channel. I'd probably rather shove rusty nails under my eyelids, though.

"Regarding the Technical Aspects of the SDARS Providers XM and Sirius"

"There are significant differences in certain technical aspects of the two SDARS systems as deployed by XM and Sirius. The systems as currently deployed are not interoperable. That is to say, an XM receiver cannot receive the Sirius signal and vice versa. Thus, as is true today, if the proposed merger of XM and Sirius were consummated, consumers would still need to purchase a new interoperable receiver in order to receive the signals of both providers. These differences in system operation, function, and structure make the design and implementation of a single unified and interoperable receiver both complex and expensive. In fact, both XM and Sirius have been working in a joint venture to develop an interoperable radio since 2000. At this time, no interoperable radios have been introduced into commercial production."

http://tinyurl.com/2kek8t

Interoperable receivers are not even a reality, yet, and will be very expensive.

"Ibiquity Publishes Proposed Rule For Merger"

"This represents $100’s of millions of dollars if the premium is only $10 per chipset. How much is the premium in reality? $20? $30? This information is needed to consider exactly what is being placed on the table by Ibiquity. Ibiquity is looking for such a concession so that they will no longer have to spend hundreds of millions of dollars, and negotiate with OEM partners. While seeing exactly what their proposal seeks is helpful, there are still more answers that are needed. Taking away hudreds of millions of dollars in synergies is not a viable answer at this point."

http://siriusbuzz.com/ibiquity-publishes-proposed-rule-for-merger.php

With iBiquity's and terrestrial radio's financial status, good-luck!

How exactly is Clear Channel a monopoly?

@Grinch: @Murphy - give that argument a try sometime if you are stopped for going 45 in a 25 mile an hour zone. Tell the cop "That's an OLD SIGN and things have changed since it was put up." See how far you get making that argument. These were conditions of license, put there for a reason. They said specifically that these licenses weren't to be merged. Is there something there that is difficult to understand? Therefore, the merger should be denied. As you would say, it's open and shut.


Did you know in Texas it is illegal to yell on a public street because of the fear of causing a stampeede? It is punishable by jail time. Cattle rustling is also an offence punishable by hanging.

These are old rules. They are no longer enforced, but they are still technically laws because it is more hastle to have them removed than it is to leave them there and ignore them. Things change, but the writing doesnt always reflect that.

What would you like the original order to say?
The two entities cannot merge for a period of 10 years, when at which point they can merge if they show that they cannot profit as seperate intities and can prove that they compete against devices which may or may not exist at the time because we dont have a fucking crystal ball?

@Brian - it is a specious argument. Tell me WHEN it's OK to walk away from an agreement or contract using your "old rule" argument. One week? Two? Ten years? I'm 60 years old and have a lifetime of old contracts I would like to walk away from. Why not - my mortgage is 20 years and things have changed since I signed the document. Do you suppose I could avoid foreclosure by using your argument and just tossing the documents in the trash can? Seriously, the original licenses in this case could have been written better, and could have included a review of the Conditions at license renewal time, or at some specific time interval. Since they contain no such specifications, the wording stands as written. Case dismissed, Bailiff, next case please...

give that argument a try sometime if you are stopped for going 45 in a 25 mile an hour zone.
--The Grinch

This Grnich character is completely misguided. Local authorities often change speed limits as the need arises; so do federal authorities on federal highways. Often it's based in engineering studies which evaluate traffic patterns, road conditions, safety record and weather. In other words, those who make the laws, are authorized to change the laws.

But to refocus the discussion on satellite radio, the uncodified policy concerning two licenses was nothing more than a policy statement reflecting the Commission's understanding of competition at the time. Competition has changed dramatically since licensing back in 1997. While The Grinch seeks to confuse matters by suggesting rules can't be changed, it is important to note The Grinch fails to acknowledge the FCC changes their rules all the time; often to Clear Channel's benefit.

It would be hypocritical for the FCC to change their rules to benefit Clear Channel because conditions have changed which warrant such a change, and then deny changing their rules which would benefit satellite radio when those same changing conditions warrant another change. But for NAB or Clear Channel to argue the rules should NEVER be changed is downright laughable.

The Grinch uses the example of walking away from an "agreement or contract", but fails to address "rules". Then goes on to offer choices for how long before agreements or contracts should remain in place before being allowed to change them. The underlying answer to the misguided question is: rules should be changed when appropriate--as they usually are and always should be. Regarding the satellite radio license rule, it should be changed now. After all, a change is warranted in this case; it's in the public's interest and there isn't any reason not to.

That Sirius-XM be subject to indecency regulations. Because, "one of the primary potential dangers to free, over-the-air radio posed by this merger is siphoning popular, including 'edgy' content, with consequent loss of advertising revenue."

This is a lot of BS. The only reason i subscribed to satellite radio in the first place is because of it's 'edgy' content. If Clear Channel and other broadcasters had stood up to the FCC in the first place there wouldn't be these all these stupid fines or retarded indecency regulations. But Clear Channel was more interested in staying in good standing with the FCC so they could buy more and more stations than standing up for their talent or their listeners.

Satellite is a paid service and should be treated as such. I can and do block the channels that i find offensive such as the Country Music channels. Parents can block channels that they don't want their children listening to.

Instead of going after Satellite Radio, Clear Channel should be petitioning the FCC so that they can scramble digital radio signals so that a subscription and a conversion box would be needed to unscramble it and they could then broadcast their own 'edgy' content. . . But that would require courage and creativity: two things they seriously lack!

Fuck Clear Channel!

Clearchannel's obsession with this merger is a clear demonstration that the merger will not in fact create a monopoly, and will instead be in direct competition with terestrial radio.

If satelite radio was really its own, completely separate industry, not in competition with existing media formats, then Clearchannel would not be spending money to try and fight it. It wouldn't impact them.

Their opposition to the merger is essentially self-defeating.

Or are we to believe that Clearchannel is spending all of this money for the benefit of the public? I find it hard to believe that anyone could suggest such a thing while keeping a straight face.