Consumers group demands hearing on XM/Sirius


“Highly confidential” information has been made available to the FCC, and to the public only in redacted mode, concerning the proposed merger of satellite audio services XM and Sirius, which FCC Chairman Kevin Martin has said may be ruled on by the end of next month. The watchdog, C3SR, says a full public hearing on the matter is warranted.

A clue to the nature of C3SR’s complaint is found in its filing with the FCC, which is also heavily redacted. Early on in the document, C3SR says, “Instead of diligently complying with the interoperable receiver requirements in each company’s FCC license, Sirius and XM [redacted]. In sum, full and fair marketplace competition, as originally intended by the Commission, has never occurred because of the conduct of Sirius and XM.”

Also cited as a way to avoid competition are exclusive deals with car manufacturers to install only receivers from one company or the other, thus guaranteeing each company a virtual monopoly on the purchasers of those vehicles.

After suggesting that the companies lacked candor in applying for the merger, C3SR wants the FCC to determine, “…whether the proposed merger is contrary to the public interest because it furthers an illegal conspiracy to restrain trade.” C3SR notes comments from other consumers groups noting that the pair are now asking to be rewarded with merger approval by offering the interoperable receivers that should have been made available years ago.

The filing goes on to quote congressional testimony from Sirius CEO Mel Karmazin and suggests that the “highly confidential document” in question calls the testimony into question – again, the FCC can read the C3SR filing but the public sees only a redacted version.

C3SR concludes that a public hearing to get to the bottom of the interoperable receiver questions, along with other issues, is absolutely necessary before the merger can be approved.

RBR/TVBR observation: It would seem that the “highly confidential document” may fall short of a smoking gun with fingerprints, but it obviously contains highly sensitive information and seems to have been discovered on the scene of the alleged crime. But even if it doesn’t turn out to be as incendiary as C3SR believes it to be, does it really matter? Anybody can see that the two companies have been doing their level best not to compete openly, and that taking the only two companies in the satellite audio market and making them one is bad for consumers. Not to mention it is prohibited by their charters. The biggest mystery in this is how the merger got past the DOJ.