PK’s Conditions Included in FCC’s XM-Sirius Merger Draft Order

FCC

The Washington Post is reporting that FCC Chairman Kevin Martin is circulating a draft order that would permit the merger of XM and Sirius Satellite radio subject to six conditions. Under these conditions, the merged entity would

  • place a price cap on programming (the AP is reporting that these would be three-year caps);

  • offer a la carte programming choices;

  • open the standards for satellite radio receivers so that any device manufacturer can make satellite radios;

  • set aside 4% of their spectrum capacity (what now amounts to 12 channels) for non-commercial educational programming;

  • lease another 4% to groups like minorities and women who are underrepresented in broadcasting; and

  • manufacture interoperable radios that allow a subscriber to receive programming from both providers.

As readers of this blog well know, PK has been promoting precisely the first four of these conditions in Congressional testimony and FCC filings for the past year and a half. So this proposal looks really good to us, although I'm sure we will have some disputes over how the noncommercial set-aside is implemented. Here is our FCC filing that details how PK would like the set-aside to work.

I have been told by an industry source that the companies will file a letter today setting out that they will agree to these conditions "voluntarily." As in the merger of AT&T and Bellsouth in 2006, that letter will likely become part of the Commission's decision.

But nobody should think the game is over. Indeed, it is just starting. The Chairman needs two more votes. Democratic Commissioners Copps and Adelstein are likely to be circumspect, if not outright opposed. And Republican Commissioners, particularly Commissioner Robert McDowell, are likely to want fewer, or no conditions. So stay tuned.

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