No Ban on Single Satellite Radio Operator Carved in Stone, Hundt Says
Reed Hundt, chairman in 1997 when the FCC approved an order authorizing the satellite radio service, voiced general support for the XM-Sirius merger in comments filed at the agency. Hundt said the 1997 digital audio radio service (DARS) order’s bars on an operator’s owning both licensees weren’t necessarily meant to be permanent. The FCC sought comment during the summer on whether DARS is a “binding” rule, meaning that the commission would have to grant a waiver to approve the XM-Sirius merger (CD June 28 p5).
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“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,” Hundt said: “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.”
Hundt said the merger could boost competition, noting that on their own the companies have been struggling. “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,” Hundt said. “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’s comments came in an interview he did with top attorneys for XM and Sirius, including former Common Carrier Bureau Chief Gary Epstein and former FCC Chairman Richard Wiley. A transcript of the interview has Hundt explaining that Sirius CEO Mel Karmazin had asked him to comment and as a former public servant he felt obliged to explain the positions he took while at the FCC. Hundt said he didn’t seek to be paid for providing expert testimony and he thought the best format for him to comment was through an interview that would be transcribed by a court reporter.
Meanwhile, XM and Sirius shareholders voted separately to approve the merger Tuesday by overwhelming votes. Though the votes’ outcome never was in doubt, they were essential steps forward for the deal.