This is pretty big news. Former FCC Chairman Reed Hundt - who was essentially the "architect" of satellite radio - has voiced support for the merger between Sirius Satellite Radio Inc and XM Satellite Radio Holdings Inc.
Hundt served as Chairman of the FCC from 1993 through 1997. During his tenure, the Commission created the rules for satellite radio and granted Sirius and XM their licenses, a process that Hundt was integrally involved in.
In an interview - of which an unedited transcript was filed with the FCC today - Chairman Hundt discussed the proposed merger, the creation of the satellite radio rules, the rationale behind the establishment of two satellite radio licenses and developments in the audio entertainment market since 1997.
Read excerpts from the interview after the jump...
(Please note that some emphasis has been added to Hundt's statements.)
When asked in an on the record conversation what his views of the merger were, Hundt said:
“I think that if XM and Sirius combined, it will be pro-competitive in all likelihood. It seems to me that that is far more likely than not. It seems to me that what has happened over time is that these two firms have proved when kept apart to be incapable of mounting the really serious competition against … terrestrial radio that I had always hoped for. And it seems to me that there's no indication of any anticompetitive outcome if they do combine, so let's give them a chance to have a sharper point on the arrow and see if they can do better in terms of penetrating the listener audience.”
Hundt also clarified - for the record - the intention behind the FCC’s 1997 order creating the satellite radio service and the creation of two separate licenses.
“I should just say my thought was this: Let's start out with these two licenses, since it is not clear exactly what is the optimal business model, and then let's let the two firms go at it for a while and see what happens. But it was never the case that these service rules were intended to be written [in] concrete or, like the Constitution of the United States, changed only through an elaborate process. It was an attempt to figure out a good way to get the satellite radio industry off to a pro-competitive start and then in the fullness of time the FCC and the parties and the people in the industry would be able to see, well, what works and what doesn't work, what's happening and what isn't happening.”
Mr. Hundt also provided his thoughts on the current market for "audio entertainment" and all of the competitive options available:
“[T]here are so many new ways fundamentally spawned from digitization and the tremendous increase of processing power per dollar, there are so many new ways to generate and deliver content to listeners that the idea that either satellite radio as a distinct market or that satellite radio is the only competitor against terrestrial broadcasting, neither one of those ideas holds water anymore.”
The former FCC Chairman also reviewed the intention behind establishing satellite radio as a competitor to terrestrial AM/FM radio:
“[T]here was not a shadow of doubt in my mind that the competitive force of satellite radio was one of the very few arrows we had to shoot at this elephant-like industry that was going to be created in terrestrial radio. And as I said, looking back over the last ten years, both things proved to be true. It's just that the arrow, if you want to put it that way, of satellite radio has not had a sharp enough point on it.”
As part of the interview, Mr. Hundt stated that, as former Chairman of the FCC, he felt an obligation to address on the record the important issues related to satellite radio with which he was integrally involved during his tenure.
Again, the full un-edited transcript from the interview was submitted to the FCC today.
THIS WILL TAKE US TO THE PROMISED LAND !!!!!!!!!!!!!!!
What a joke this all is. It's absolutely mind-boggling that Murdoch can buy up the national media but 2 satellite radio companies get help up for a year.
What a joke this all is. It's absolutely mind-boggling that Murdoch can buy up the national media but 2 satellite radio companies get held up for a year.
Why is this news? Hundt came out in support of the merger about 9 months ago. xm and sirius really have a PR push going now. Too bad the fcc and dept of justice doesn't give a hoot what hundt thinks.
This process has been going on for quite a while. As far as I know this is the first time he made these remarks. Anybody know why it would take him so long.
Jon
because they vetted the material to be sure it made no mention of the interoperable device concept (lmao)
sad sad sad,,,,,,,,
Hundt said in February that he'd reverse the rule banning a merger of the xm and sirius. Jon, please see this link, just one example: http://seekingalpha.com/article/24783-xm-sirius-merger-talk-defining-the-competitive-landscape
Im no lawyer, but if Sirius/Xm have to take their merger to court(if turned down), this would really be a major key witness in their favor, as he is the person who wrote the rules for these two companies and his intentions clearly state in this interview that the rules were NOT written in stone and the market had evolved tremendously since then--I think his testimony would REALLY be a major influence on a court decision---I would think the FCC and DOJ wouldnt want to go the court route with the odds AGAINST them as it would prove a waste of time/effort and would be quite embassassing to them to lose...again...
There is nothing new here; this guy supported the merger from the early days.
My only real question is whether he is being compensated in some way by the companies. Most of the proponents seem to have some financial interest in seeing a merger, so it is entirely possible he's on the payroll, somehow.
all of the information he provides is only general stuff based on logic for any new concept what he does not mention speaks volumes....dual/interoperable devices, open access for consumers which is the very hart of the current issue..
so why continue to avoid speaking of it......do to the risk imho
stack--"most of the proponants seem to have a financial interest" ya think??
thank god the anti-merger people dont........lol
>> thank god the anti-merger people dont.
Well, the NAB hired people. But other than that, most anti-merger people are that way because it just doesn't make sense to grant these companies an unregulated monopoly.
For example, one of the most compelling arguments was put forth by the Antitrust Institute, whose charter is to promote competition. They weren't being paid for their position.
It is a pay for usage entertainment outlets, so I dont see how it can be construed as a monopoly. The marketplace will dictate whether they can become successful or not based on who is willing to pay for the service. It competes against free terrestrial radio, ipods, cell phones (now with plenty of mp3 and streaming entertainment), PSP's, the cd player and many other systems, just in the car alone.
Silly. We allow RMurdoch to own several outlets for media from print to video to television, continue to green light radio stations purchasing competitor's stations, and the combination of services as packaging to cable consumers, but delay a merge between infant companies for unprecedented amounts of time for no solid reasons. For shame.
I read the whole thing not much meat to it other then it was a done as a experiment and was directed at earthly radio.......
not a single word about interoperable devices as mandated....why go to such length to explain the concept then avoid the primary issue of a common platform......the perecption of hiding the truth grows with each passing day...
for what ive read, the majority of the public/groups are IN FAVOR of the merger with the exception of the NAB(and you stack!)
I have a friend who just bought a new car. It has Sirius Sat Radio, iPOD input integrated with the radio, AM/FM (of course) and a 6 disc CD Changer. That seems to be the way things are going. Give people all of the options and let them chose. Hardly seems like a monopoly to me.
Chico, thanks for the link. I do remember that now. It did seem odd that something like that would just come out now.
Well at least he called Satellite Radio its own industry. :)
Well at least he called Satellite Radio its own industry. :)