Barrington Research analyst Jim Goss writes in a recent report that he feels Sirius Satellite Radio Inc. is "better positioned" than XM Satellite Radio Holdings Inc. to achieve profitability should the merger not go through.

"We continue to believe that the FCC will likely approve the merger, although the time frame remains unclear," write Goss.

Barrington adds that, "if the merger is blocked or the approval language contains unacceptable conditions, we would continue to favor Sirius as the better standalone operator." Goss said that Sirius is "better positioned" than XM "to achieve profitability in a shorter time frame with relatively less downside risk."

In a report on XM, Goss noted that, "In the event that this does not occur, we feel some risk would exist in the stock."

[RadioInk]

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]

Public-interest groups Public Knowledge and Media Access Project want to make sure the FCC understands their position on the Sirius-XM merger in light of a recent letter from Chester Davenport the Managing Director of Georgetown Partners.

While they confirmed that they did indeed meet with Georgetown Partners, the groups reiterated that they "take no position with respect to [Georgetown Partners'] specific proposal that 20% of the merged XM/Sirius company's spectrum capacity be leased on an arms-length basis to an independent entity."

"This approach could be a useful supplement to, but not a substitute for, the 5% non-commercial, educational set aside," they state in their letter to the FCC.

Should the Federal Communications Commission determine that Georgetown's proposal is in the public interest, both Public Knowledge and Media Access Project support the minority-owned group's proposal to assist non-commercial, educational programmers.

Both Public Knowledge and Media Access Project have proposed that roughly 5% of broadcast capacity from a merged Sirius Satellite Radio Inc. and XM Satellite Radio Holdings Inc. be dedicated to non-commercial and educational programming, of which Sirius-XM have no editorial control.

Georgetown stated in its letter to the FCC that they would agree to the proposal to set aside 5% of their own capacity for non-commercial, educational  programming. Additionally, they stated that there might be "technical barriers" that would hinder this content from being delivered to a merged entity and proposed a plan to overcome these so-called barriers.

In the filing, the public-interest groups conclude:
"In the interest of clarity, [Media Access Project and Public Knowledge] wish to state that neither they nor any person or organization associated with them have requested or received consideration of any kind from [Georgetown Partners] or any person or organization associated with them in exchange for their willingness to submit this letter of support."

[View FCC Filing (PDF)]

XM will broadcast extensive coverage of the 92nd running of the Indianapolis 500 on May 25th live from the Indianapolis Motor Speedway.

"The Greatest Spectacle in Racing" will be heard on the IndyCar Series Racing channel (ch 145) starting at 1pm ET, with the pre-race show at noon ET. This is the first running of the Indy 500 since the unification of the IndyCar Series and CART/Champ Car.

Andretti Green Racing drivers Danica Patrick, Tony Kanaan, Marco Andretti, and Hideki Mutoh will join team co-owner Michael Andretti at the speedway for a special edition of their weekly XM radio show "Andretti Green Racing Hour," which will air on May 21st, 7pm - 8pm ET, on XM Sports Nation (ch 144).

XM Sports Nation will also include daily coverage of the Indy 500, led by the motorsports show "Powershift" hosted by Joe Castello. Castello will host his show (which airs 8-10pm ET on weeknights) live from the speedway on May 22nd and 23rd, and he will host special editions of the show from the track on May 24th at noon ET and May 25th at 11am ET.

XM's IndyCar channel will also be carrying Indy 500 qualifying on May 17-18, Carb Day events and the Firestone Freedom 100 race May 23rd, and the IMS Radio Network show "Indy Live." A full list of dates and times is available here.

(Pop quiz: Guess who's car is pictured?)

Great American Country (GAC) host Storme Warren will be joining XM Radio as the host of the afternoon drive slot on Highway 16 starting on June 9th.

Warren's live afternoon drive show, which will air 2pm - 6pm ET, will debut on Monday, June 9th.

Warren's addition coincides with the upcoming opening of XM's new Nashville headquarters at the Sommet Center Arena Tower where the show will originate from daily. The brand-new, state-of-the-art facility will house office space, operations, production facilities, and seven studios - including a stunning, glass-walled performance studio overlooking downtown Nashville and the Ryman Auditorium.

Before his show's debut, Storme Warren will also participate in XM's exclusive coverage of the 2008 CMA Music Fest, June 2nd - June 9th, which will feature live concerts from the Chevy Stage, Fan Club Parties, and other live performances.

He will also continue as host and co-executive producer of "Country Music Across America" on Great American Country Television.

XM will cap its first season of carrying college baseball games from the six power conferences - the ACC, Big East, Big Ten, Big 12, Pac-10, and SEC - with conference tournament games starting May 21st.

XM greatly expanded its college baseball programming for 2008 with a slate of more than 70 regular-season and tournament games.

Every game of the Big 12 baseball championship will air on XM. For the SEC and ACC tournaments, XM will carry ten games for each tournament, including the finals and semifinals. For the Big East and Big Ten tournaments, XM will carry the finals and semifinals.

The Pac-10, which has college baseball games on XM during the regular season, does not hold a tournament at season's end - so who cares.

Following their marathon of meetings with the FCC, Primosphere wants to make clear its position on the ownership of spectrum: they don't want to just lease spectrum, they want the spectrum licensed to them.

"Primosphere is not looking to 'lease' a portion of the DARS spectrum," the company writes in a recent filing with the agency. "Rather, Primosphere is asking that its pending application be granted in part so that Primosphere will be a licensee of the DARS spectrum. Furthermore, Primosphere hereby restates it proposal... to offer free DARS service."

According to the filing, if the FCC approves the merger between Sirius Satellite Radio Inc. and XM Satellite Radio Holdings Inc., Primosphere urges the agency to simultaneously license a portion of the DARS spectrum to the company.

"Primosphere's proposed free service will ensure that consumers have an alternative to the combined XM/Sirius," the letter concludes.

[View FCC Filing (PDF)]

Georgetown Partners, the minority-owned firm that analyzes FCC regulated markets "for opportunities to extend minority ownership and control," recently met with public interest groups to discuss set aside provisions of Sirius-XM spectrum, according to a recent filing.

The privately-owned firm, headed up by Chester Davenport (pictured), is asking the Federal Communications Commission to require that 20% of Sirius-XM's broadcast infrastructure be leased to a "independent new entrant."

In a letter to FCC Chairman Martin, Davenport outlined his meeting with public interest groups Public Knowledge and Media Access Project. Both groups have suggested to the FCC that 5% of spectrum from a merged Sirius Satellite Radio Inc. and XM Satellite Radio Holdings Inc. be dedicated for non-commercial, educational programming.

Georgetown Partners agrees that the proposals by Public Knowledge and Media Access Project (as well as its own) would indeed "benefit consumers and serve the public interest." But Davenport feels that there are "technical barriers" that would hinder this content from being delivered in the digital format and bandwidth necessary, according to the letter.

As a result, Georgetown laid out a plan to "further the public interest objectives" shared by the groups. They include:

• Georgetown will "accept delivery of the program streams" in an agreed manner
• Will "at its own expense" encode the programming into the required digital format
• And finally will "transport and deliver" the programming, along with its own programming, to the merged entity.

All costs for the acceptance, encoding, and delivery of programming would be graciously absorbed by Georgetown Partners, according to the letter.

Chester Davenport highlights that their plan would be to broadcast satellite radio programming to all receivers - subscribers or not - and so would further the objectives of Public Knowledge and Media Access Project.

"We estimate that today there are 36 million such receivers in the marketplace, of which roughly 50 percent, or 18 million, are not subscribed," writes Davenport. "Implementing any educational set-aside in this manner will double the potential audience for the non-commercial programming."

Finally, Davenport feels that the educational set-aside is separate and distinct from Georgetown Partners' own 20% proposal. But if both proposals are realized, Georgetown "will dedicate resources to make sure that the non-commercial educational uses become reality."

[Read the entire letter (PDF)]
Bonus: Listen to yesterday's Orbitcast Radio show featuring Public Knowledge co-founder Gigi Sohn where we briefly discussed Georgetown Partners' proposal.

XM Satellite Radio Holdings Inc. chief executive officer Nate Davis told investors yesterday that if the company included promotional subscribers into the tally, XM would have 10.8 million subscribers.

This is the second time that XM management has brought this to light.

"XM does not report promotional subscribers when a new vehicle is manufactured, but rather only counts a subscriber when a vehicle is sold, and when we have a paid subscription," said Davis.

In the past, XM has not included XM-equipped vehicles that have been manufactured and shipped to dealers in its subscriber count.

"This is the so-called 'parking lot' sub-number," Davis told investors. "At the end of the first quarter, there were an estimated 1.5 million of these vehicles."

Sirius did not discuss the so-called "parking lot" subscribers during their most recent conference call, but during the Q4 call CFO David Frear said that the number accounted for 11% of the company's subscriber base.

"In essence, if XM included these unsold vehicles in the first quarter results, we would have reported an ending subscriber total of roughly 10.8 million, gross additions of roughly 1.24 million, net additions of roughly 505,000, an improvement in churn from 2.7 down to 2.3%, and a subscriber acquisition cost improvement of roughly 15% below the reported $73 per subscriber," added Nate Davis yesterday.

That should stir the pot a bit.

Despite falling U.S. auto sales, XM Satellite Radio delivered the highest number of vehicle based subscriptions in satellite radio history, said CEO Nate Davis during yesterday's earnings call.

"Even with the relative softness in the US auto-market, XM delivered the largest number of OEM growth additions in the history of satellite radio," Davis said.

XM had over 800,000 gross OEM additions and roughly a million factory installed XM radios manufactured and delivered to dealers in the quarter, Davis told investors. "That is a 48% year-over-year quarterly increase."

XM ended the quarter 355,000 net subscriber additions from the OEM channel, while Sirius brought in over 321,000 net subscribers from the automotive channel.

Still, XM had a net loss of 51,000 subscribers from the Retail channel, while Sirius squeaked out just over an additional 2,500 subscribers from Retail

Davis explained that while the company had successfully increased direct retail sales to their website and call centers, those increases did not offset "the continuing decline in overall retail sales through the big box retailers."

"However, offsetting this retail weakness... is a continued acceleration of our OEM growth," said the CEO. "XM 2008 installations could well exceed 4 million units close to the long range estimate we provided a number of year's ago."

[Transcript via SeekingAlpha]