DEBRIEF recently became a SIRIUS customer and the merger is of interest
of course. Public comments to the FCC action are on line in PDF format
at this FCC link::
<a
href=http://www.fcc.gov/transaction/xm-sirius.html>http://www.fcc.gov/transaction/xm-sirius.html
Primary issue before the FCC is whether the merger involves a
transferable license and hence must be addressed as such by a firm rule
of the FCC. SiRIUS with XM in support thereto reference the
non-existence of any rule prohbiting the merger; and instead acknowledge
the FCC's powers to rule anew on the matter; noting that they are not
bound by past rules -- only that the FCC must comply with the
Administrative Procedure Act.
The comments generally address the procedural point of law; and then
generally address the merits and de-merits of the combination proposed
by the only two such satellite radio corporations.
Some, among them, are advocate for merger Edward Meese III (former
Regan Administration Atty General) noting the losses of both
corporations and who would sustain the merger for purposes of continuing
a means of diverse network radio broadcasting. Others, including the
NAB, weigh more heavily on the past use of en-rulement by the FCC
pertinent to mergers of licensees in cross competition .. such as the
Satellite Television Industry giants which are barred from merging.
Most note the employment issues; the newer diverse programming, markedly
too, for rural areas (as in satellite TV).
Because the XM and SIRIUS radio corporations originally competitively
bid (no others) for the spectrum and received the commercial use of the
entirety of it; the concern for other later satellite radio entrants
(and there are none now noted) and an absent direct competion in this
branch of the broadcasting industry; competition is raised as an issue.
Original FCC spectrum bid rules assumed awardees would receive
offsetting allocations of the purchased spectrum to ensure competion.
The FCC under recent Telecommunications Acts and amendments enters the
market as an intervenor via license approval and radio-tv spectrum
allocation; and adjudges cross-ownership issues where there is a
disservice to the consumer and wholesale markets by diminished
competition (ie market concentration).
Most comments note the development and transformation of the audio radio
market with network combines, and satellite radio and terrestial radio,
and local market options; as well as the internet radio market.
The FCC and comments do note that while growing, the satellite radio
market is a small share of the entire radio or radio-tv market. An
option by subscription rather than a necessity.
This blogger would favor the merger to spare a later subsidy or rescue
of the loss burdened enterprises (which have created an industry once so
expensive to capitalize; that the government created a quasi-government
corporation for the costs and risks (ie COMSAT) of a first satellite
communications venture.
Laggardness or bona fides have not yet produced a joint satellite radio
receiver for SIRIUS & XM - albeit for seven years the two companies had
agreed to cross-license technologies for that purpose in serving an FCC
rule requiring universal receiver capability. Note well, that the FCC
does not require the two companies to specifiically manufacture uniform
receivers. Despite this non-satisfaction, they should not in light of
the consumer costs, regard SIRIUS or XM as delinquent and hence
penalize the two by combination denial. (cf the Blue Sky Comment on the
merger at the above link). Note further, that a merger lessens problems
in the industry's production of a universal satellite radio receiver.
Further, the growth of the internet radio industry, and portable
broadband 'satellite radios' [sic], have offered options through
internet transmission which satisfy the rule's purpose for universal
access via suitable ground relay/boost internet receiver or similar
portable machinery. This would include expansion of ground radio
(terrestial) repeater stations.
The SIRIUS XM merger is a classic resources combination in an expensive
new technology industry (albeit a decade + old). The FCC need simply
guarantee in any merger approval, a process for space satellite radio
spectrum sharing should a new entrant appear; and equitably, with ground
competition in mind, allocate terrestial radio spectrum to sustain
market entry and competiton. This would exclude any space to earth
radio frequency spectrum interface accomodation for cost-effective
satellite radio ground repeater boost or relay.
On other market points, aside from telecommunications, CON-RAIL was a
federal resolve in the poor health of freight railroad days; with its
later re-emergence into the modern east coast freight giant CSX etc.
Should markets and capacities change, existing anti-trust and
telecommunications law would re-address the resulting corporation.
Hence -- used capacities without other subsidy (and competition is not
entirely removed from the product's market) are used; the public are
served by a 'for-profit' investor in the technology, and a ready use of
it; rather than warehousing it after capital failure or rescuing it by
taxpayer bailout.
For further advancing telecomunications business growth, the FCC are
encouraged to reconsider the existing bans on other factors of the
originating and re-broadcast industries. That would include a release
of the energies of ground telecommunications giants (ie cable companies
& cellular telephone companies) to cross purchase into the satellite
radio markets. Cable companies and cellular telephone companies both
now offer ground repeater re-transmission of music and audio news -- the
former through the auxiliary television audio; the latter through
cellular telephones.
The FCC is also urged to avert a dwarfing limitation of the critically
diverse internet radio market; with a policy which conserves market
entry which would as well abet a packaging market for re-broadcasting by
satellite or terrestial radio companies.
If internet radio competition is measured as adversely affected, it
would appear so by SIRIUS and XM alone or with both as one capacity.
This would include broad-band and dial-up internet; and the software
manufacturers of their internet a/v player suppliers.
The FCC is commended to approve the merger by this blogger (DEBRIEF &
SCOTTMCON).
Scott M. Connolly SCOTTMCON
9 Pilgrim Road
West Springfield, Ma 01089
(413) 788-9142
(413) 330-7064 - cell phone (call or text SMS MMS)
4133307064@tmomail.net (e-mail or text)
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Cell Phone 413-313-7625 SMS or call or e-mail
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