Group calls for Congressional subpoena of Sirius XM

In mid-2008, Brownback sent a letter to the Senate Judiciary Committee Chairman, stating he felt that Mel Karmazin "may have misled" in his testimony before Congress. This letter is undoubtedly one of the reasons why Hartleib chose to address Brownback directly, in hopes of finding a friend in Congress.

Hartleib wrote to Brownback, stating that "It is my opinion that it is without question Mr. Karmazin misled, willfully withheld and omitted information from members of Congress." Hartleib highlights that "withholding relevant information and/or intentionally misleading members of Congress is considered perjury under its definition."

Read the full letter below:

MICHAEL HARTLEIB
obo SaveSirius.org
P.O. Box 7078
Laguna Niguel, CA 92607
(714) 927-5898
 
January 26, 2009
 
Senator Sam Brownback
United States Senate
Washington  DC 20510-1604
 
RE:  Anti-Trust Violations and possible Perjury
 
Dear Senator Brownback:
 
In your letter of June 10, 2008 to The Honorable Patrick Leahy you addressed serious issues concerning our Nation's Anti-Trust Laws.  You state "It is our duty to oversee the process on this merger to ensure that justice is done." At the heart of your concern were documents held under double protective orders at the FCC and deemed "highly confidential."  You question the candor of Mr. Mel Karmazin, CEO of Sirius XM Radio.
 
It is my opinion that it is without question Mr. Karmazin misled, willfully withheld and omitted information from members of Congress. As I am sure you are aware, withholding relevant information and/or intentionally misleading members of Congress is considered perjury under its definition.  I am privy to the contents of these documents which include a 'white paper report' from Mr. Michael Deluca of Interoperable Technologies LLC; the joint venture formed by Sirius and XM Satellite Radio which is a wholly owned subsidiary of the aforementioned companies.
 
These documents need to be subpoenaed by Congress as I believe the protected status is nothing more than an attempt to obfuscate a crime.
 
It is my opinion these two companies have colluded and conspired to restrain free trade in violation of our Nation's Anti-Trust Laws including but not limited to the Sherman Act. As you are aware, the basis of Anti-Trust approval from the Department of Justice relied heavily on the fact that consumers did not have access to interoperable radios and were subject to exclusive OEM deals which prohibited them from having a choice of services.  How ironic is it that because these two satellite radio companies failed to comply with the FCC's Licensing Mandate (to provide end users with radios that would permit them to access all SDARS services without the need or purchase of new hardware) that they are granted approval by the Department of Justice.
 
Despite a relentless pursuit for the truth by me and others, the FCC refused to publicly disseminate these documents which would have enabled the public to make fully informed comments on the FCC Docket 07-57 in regard to the merger.  More troubling than this is that the FCC obtained these documents after the Anti-Trust Division of the
 
Department of Justice ruled in favor of this merger without concessions in large part due to the companies' failure to "commercially" market interoperable radios. Based on the information contained in the 'white paper report', you are aware that interoperable radios were introduced into the marketplace without consumers' knowledge, hence the reason the companies would have to use the qualifying words "commercially" introduce when defending their lack of compliance.
 
The failure of the FCC to release these documents makes them complicit in a multi-year conspiracy to restrain free trade and has allowed these companies to consolidate the entire SDARS spectrum which has been their goal from at least 2002. Despite there being a law prohibiting the combination of the two SDARS' licenses, within mere months after becoming operational in 2002, the companies entered into merger discussions. Instead of abiding by their Licensing Mandate and Joint Development Agreement, the companies willfully conspired to prevent consumers knowledge of or access to interoperable radios, costing subscribers millions of dollars in expenses for unnecessary hardware as well as millions of dollars in subscription fees as the 'white paper report' clearly points out they knew that by "commercially" introducing interoperable radios it would drive subscription rates down for consumers as there would be real competition between the two satellite radio providers. It should also be noted that Commissioner Adelstein, in his dissenting statement on the Sirius XM merger,  states:
 

"Ostensibly, the DOJ relied on two key premises in reaching its decision: long-term sole source contracts with automobile manufacturers and the lack of an interoperable radio.  Even though the DOJ acknowledged that the Applicants competed on the terms of automotive contracts, including the amount of equipment subsidization, it readily dispensed with this consumer benefit, because many of the sole-source contracts were locked up for extended periods.  Further lack of competition between the Applicants was explained by their decision not to bring an interoperable radio to market despite a Commission requirement to do so.  It is ironic that the DOJ relied on the Applicants' failure to comply with the interoperability mandate as a justification for the merger.

 

Interoperable Receiver.  The Order characterizes the Applicants' interpretation of the Commission's interoperability requirement as "not unreasonable" to excuse their earlier failure to develop and market interoperable receivers.  The Applicants' noncompliance created switching costs for consumers and, thus, limited pre-merger competition between the Applicants. (emphasis added) Adding this condition today is virtually meaningless, because the merged entity will have every incentive to offer interoperable devices anyway.  The point was to enforce the requirement before, not after, the merger."

 
 
Commissioner Adelstein freely admits the companies failed to comply with their Licensing Mandate which limited premerger competition between the two SDARS companies.  Just another way to say "restrain free trade".
 
This merger has been a disaster for the two companies' shareholders as we have lost 98% of shareholder value in mere months after consummation of this merger. The combined entity is near bankruptcy which will enable private equity to acquire the combined entity for pennies on the dollar and allow them to control more spectrum than all of the FM/AM stations in this Country combined.
 
I respectfully request a full investigation into the breakdown of the FCC and how it is these two companies were able to ignore their Federal Mandate for over ten years and make a Federal Regulatory Agency a coconspirator. How is it that when you so clearly pointed out issues that involve the integrity of our government decision making process, violation of the Nation's Anti-Trust Laws and potentially perjured  testimony before Congress by Mr. Mel Karmazin, that these executives have kept Congress at bay and the issues you raised in your letter have seemingly gone unaddressed allowing this merger to be consummated? 
 
Some suggest that there is still a double standard in this Country as Martha Stewart paid a heavy price for her less than candid testimony before members of Congress. I'm not trying to excuse Martha Stewart's actions, but her actions pale in comparison to those of Mr. Mel Karmazin. Martha Stewart's testimony was unfortunate but was not part of a conspiracy. Mr. Karmazin's less than candid testimony has allowed him to conclude a multi-year conspiracy with the consummation of a multi-billion dollar merger that has cost shareholders over twelve billion dollars and has set the table to allow private equity to steal this company away from its rightful owners, we the shareholders. I request that the same interest be given to Mr. Karmazin's testimony as was given  Ms. Stewart's.
 
 
I, for one, will do everything within my power to publicly disseminate all that has transpired here as there has been a complete breakdown in oversight. The unworthy are continually rewarded at the expense of the worthy which become their victims. It is time to hold those responsible accountable. Accountability is what will save us from the unabated greed that has become rife throughout our economy.
 
Sincerely,
 
 
 
Michael Hartleib
obo SaveSirius.org
 
 
 
 
 
Cc:  Honorable Patrick Leahy
        Honorable Henry Waxman
        Lisa Pinto
        Senator Herb Kohl
        Senator Orin Hatch
 
 
MH/th