If the FCC requires XM and Sirius to set aside a swath of spectrum for minority programming as a merger approval condition, Entravision is stepping forward to fill some of those satellite channels. An FCC filing discloses that Entravision CEO Walter Ulloa has been making the rounds of the Commissioners to lobby for the idea.
Ulloa, Chester Davenport of Georgetown Partners and others met with Michael Copps and staffers, and started with the premise, put forth earlier and repeatedly by Georgetown that the merger should be shot down in the first place. “The Commission should reject outright this attempt to hijack the entirety of the SDARS spectrum and enforce its longstanding rule against merger of the only two licensees in this service.”
They said they were ready to jump in and provide programming, but noted the utter inadequacy of the 4% capacity proposal put forth by FCC Chairman Kevin Martin. They argued that making 20% of capacity available to competing niche services would impact only about 2% of current XM and Sirius subscribers, since they tend to cluster around a relatively small number of the satcasters’ current channel offerings.
They further noted that out of 36M receivers currently in automobiles, about half are dark due to consumer election not to subscribe to either service. They say that their offer of alternative programming will entice many to subscribe, thus increasing use of the spectrum.
They also questioned the government’s willingness to go along wth the XM/Sirius plan after the “string of apparent violations” committed by the two.
Meanwhile, TN AG Robert Cooper and CT AG Richard Blumenthal met with Deborah Taylor Tate, representing their own states and AGs in IA, KS, LA, MD, MS, MO, NE, OH, OK, RI, WA & WI. Besides voicing objections in general over the creation of a monopoly, they said that one of the key concessions, a voluntary subscription rate freeze, may not be all it seems. “Rates could still be increased based on retroactive increases in the Parties’ cost for programming,” they argued, “rendering the value of any ‘rate freeze’ short-lived, if not illusory.”
RBR/TVBR observation: Monopoly. Bad behavior. No claim of imminent failure from either party. Add in things like one analyst’s chortle about how the merged entity would be able to strongarm program suppliers and artists at the negotiating table – pure monopolistic behavior, and then add the rate freeze loophole identified by the AGs. Competition is good; monopolies are bad. Perhaps it is time to send the DOJ and Chairman Martin back to high school for an entry level course in economics.
