DoJ Ignored XM-Sirius Competition, Opponents Claim
The Department of Justice didn’t give sufficient weight to the competition between XM and Sirius when it said last week that it wouldn’t block their proposed merger or impose conditions (CD March 25 p1), said the NAB-supported Consumer Coalition for Competition in Satellite Radio. In a pair of filings at the FCC, which is now evaluating whether transferring the XM’s licenses to Sirius is in the public interest, C3SR urged the commission “to restore competition and ameliorate consumer harms.”
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The Justice Department’s conclusion that, because interoperable radios don’t exist, listeners aren’t likely to switch services “rewards” XM and Sirius for not complying with an FCC mandate for the companies to produce an interoperable radio, said former Attorney General Richard Thornburgh, writing for C3SR. In a third filing, C3SR argued that the FCC continues to consider the satellite digital audio services market as separate and distinct from other radio markets.
Meanwhile, the Media Access Project and U.S. Electronics have been lobbying for specific conditions on any merger approval. MAP wants the combined company to be forced to give up some spectrum. USE wants the agency to prohibit XM- Sirius from signing any exclusive contracts. Individual channels should be leased by XM-Sirius similar to the cable model, Parul Desai, MAP associate director, told us. Desai participated in a meeting with FCC staff last week. It’s the first time MAP has said it wants capacity leased on an individual channel basis, she said. XM-Sirius could hold an auction to allocate the channels, MAP CEO Andrew Schwartzman told Media Bureau staff in the meeting, according to an ex parte.
Calls by iBiquity for HD radio to be included in satellite receivers “necessitates adoption of an open device condition,” said Kathleen Wallman, U.S. Electronic advisor. Without an open device condition but with an HD radio requirement, XM-Sirius would have “further power to preclude the competitive design, manufacture and distribution of consumer electronics equipment,” Wallman said.
Terrestrial radio will likely be hurt if the FCC approves the merger, said Michael Nathanson, senior analyst with Bernstein Research: “Going forward, a unified product offering with a la carte options and crisper marketing will likely be a growing problem for terrestrial radio.”