FCC puts key XM/Sirius question before the public


The language used by the FCC at the birth of the two big DARS companies, XM and Sirius, would appear to rule out a merger between the two. The FCC is now asking for commentary as to whether or not that language "constitutes a binding Commission rule" and if so, wonders if "the Commission should waive, modify or repeal the prohibition in the event that the Commission determines that the proposed merger, on balance, would serve the public interest."

Here's part of the FCC's original language: "Even after DARS licenses are granted, one licensee will not be permitted to acquire control of the other remaining satellite DARS license. This prohibition on transfer of control will help assure sufficient continuing competition in the provision of satellite DARS service." XM/Sirius are arguing that this constitutes not a rule or a regulation but rather a "policy statement," and ask that whatever necessary is done to it to make the merger possible. The FCC is taking commentary within 30 days of publication in the Federal Register, with an extra 15 days for reply comments.

The NAB's Dennis Wharton has already offered a comment, saying "NAB is pleased the FCC is asking tough questions about this proposed government-sanctioned monopoly. We're hopeful that in the final analysis, regulators will conclude that competition serves consumers better than a monopoly, particularly when XM and Sirius have said repeatedly that they are not failing businesses."

SmartMedia observation: Your average DARS-owning citizen would look at the phrase "prohibition on transfer of control" and go to work building the business as is. Only a lawyer could look at that phrase and see that it leaves a wide open hole for a merger. They're arguing that's because it wasn't put into the Code of Federal Regulations. Anyway, it's your chance to weigh in once the proceeding is opened. It's in MB Docket No. 07-57.