Fourteen states' attorneys general join opposition to XM + Sirius

By Scott M. Fulton, III | Published July 7, 2008, 6:26 PM

If the merger must go through, a group of states' legal leaders now contend, then at the very least, the FCC could mandate that the merged Sirius publish its specifications for interoperable receivers as open source.

In a phone conference July 1 with US Federal Communications Commissioner Deborah Taylor Tate, representatives of fourteen states' attorney generals' offices, including the attorneys general of Tennessee and Connecticut, collectively voiced their opposition to the merger of Sirius and XM satellite radio recently approved by the Justice Dept. And in a filing with the FCC Thursday, the Tennessee A-G's office states they questioned the DOJ's logic that compelling or forcing the merged parties to develop a standard for interoperable radios would be anti-competitive.

As an alternative, the A-Gs suggested that the FCC impose a restriction not only calling upon the merged entity -- Sirius, for which XM would be a division -- to produce interoperable radios, but to publish the standard publicly, effectively making it "open source." This way, anyone could build a satellite radio, effectively neutralizing the DOJ's argument.

"If there is any competitive source of programming preserved by the Commission -- which the States urged the Commission to do -- the success of that competition in delivering the public interest benefits will likely depend on consumer access to the entire spectrum of satellite programming through interoperable equipment," reads the report of Tennessee Attorney General Robert Cooper of last week's phone conference (PDF available here). "Accordingly, the States urged prompt deployment of and a stringent timeline for commercialization of such equipment. Additionally, the States urged that the Parties [XM and Sirius] be required to promptly make the intellectual property needed for compatible and competing equipment freely available to ensure that the increased market strength they obtain through their combination is not inappropriately extended into other lines of commerce."

The A-Gs also rejected the argument, Mr. Cooper writes, that automobile manufacturers would reject open source designs on their face, saying instead that manufacturers are typically more interested in "more robust and flexible equipment."

Cooper's report notes that the FCC ordered Sirius and XM in 1997 to devise interoperable receivers, though it provided them with no real timeline for doing so. It implied that the FCC did nothing to enforce that order, but if it had, several of the benefits that the prospective partners point to as flowing from their merger would have already been realized -- not just interoperable radios, but more diverse programming options, more family-friendly programming, and a la carte pricing for consumers.

Also represented on last Tuesday's call were the attorney generals' offices of Iowa, Kansas, Louisiana, Maryland, Mississippi, Missouri, Nebraska, Ohio, Oklahoma, Rhode Island, Washington, and Wisconsin.

Comments

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Where have these people been for the past year and a half? It seems to me that now that we are close to approval some desperate parties who are strongly anti-merger are doing everything in their power to rally support to effectively kill the deal. What we're going to end up with here is no satellite radio at all. While not technically "insolvent", both companies are close to insolvency. Both companies have a substantial negative capital positions that preclude any form of recapitalization in this economic environment. The deterioration in both company's financial conditions make the future success of even a merged company a long shot at best.

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This is just a last minute stall tactic from the NAB and member stations.

I was in broadcast (FM) for years and satellite radio is a BIG issue to them. Lot's of fear. The NAB probably lobbied some of their bigger stations to contact the AG's in their state and get this going. Probably all 50 states had AG's contacted -- only 14 joined in.

Election year... Get their name on the news and in the paper. They're "...fighting for you..."

Let 'em merge. FM would have to get better to compete. A lot of these stations are afraid of competition. It means their jock will have to actually NOT SUCK and their music selection and programming will have to improve. It will also mean they will have to not run 7-minute commercial breaks 3-times an hour.

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What jock?

Many stations are actually automated shells! ;-)

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How's about some objective reporting... not that I'm faulting this author who picked the story up...

There are 50 AG's so after 504 days 72% chose not to object. There are 100 Senators so after 504 days 92% had no issues. There are 435 house members so 84% having not objected, apparently agree with this merger.

Face it people, the only only people objecting is the NAB who is trying to kill satrad to protect their 6 billion in advertising revenue. The NAB spend billions to lobby people like John Kerry, Clair McCaskill, Dorgan, Brownback, and Leahy. See the connection?

The people have spoken and support this merger. The FCC five are not stupid or immoral people they see the value that satrad adds to those in rural areas... they know the value of satrad if we have another 9/11. They know that satrad needs their support for an open arena and to minimize media control.

They know who pays their performers and it's not the NAB is it?

Have a little faith in the FCC. Tate, Adlestein, Copps and McDowell will do the right thing for us.

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plowboy...you rock. You hit the nail on the head. the problem with radio is the nab and clear channel. satrad will be 100 times better with the merger.

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It must be an election year!

When so many can jump on a meaningless symbolic bandwagon to claim 'sincere concern' without having to deal with anything of substance or which might actually alienate the major financial underwriters of a campaign.

You see, "they care"!

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