Sirius XM covenants loom


The FCC extracted some concessions from satellite radio operators Sirius and XM before they became Sirius XM, but now it seems the FCC is holding up reconciliation of those concessions. Two such issues include channel set-asides and third-party manufactured interoperable receivers.

The FCC only recently closed a commentary window on how to fill the 4% of channel capacity set aside for African Americans, Native Americans, Asians, Hispanics and other minority groups. There are differing opinions on how the process should work among those who favor FCC involvement, and there’s a whole other school of thought that believes the FCC should withdraw from the process entirely and let Sirius XM handle it.

When it comes to opening up interoperable receiver manufacture to third parties, the problem involves what elements will be required in the final design. When he was still in charge of the relevant House subcommittee, Ed Markey (D-MA) went so far as to introduce a bill on the matter, and the NAB has been trying hard to assure that any interoperable include the ability to receive HD radio.

The combination of debt service and a devastated automobile industry is making life tough for Sirius XM. It has relied on the ability to introduce the service to new car buyers to keep its subscriber numbers up. With fewer cars moving off dealership lots, and more options moving into cars further dampening subscriptions, it looks like rough sailing ahead.

RBR/TVBR observation: Sirius XM’s Mel Karmazin didn’t like the debt deal he took to get the merger done in the first place, and that was before the economic implosion. The fact that automakers are in dire straits really piles it on.