XM/Sirius: Tate holds the key and she's about to turn it


So far the FCC decision on the merger of XM/Sirius is breaking down along party lines. Two Republicans are on board with it, and Jonathan Adelstein has made it official that both Democrats are against. Interest in Republican Deborah Taylor Tate, labeled the wildcard by most observers from the get-go, is now wilder than ever – but it shouldn’t last long. She is expected to vote to approve the transaction shortly and is thought to be in negotiation with the other two Republicans to push the deal through, but fine the companies for past infractions.

Although Chairman Kevin Martin has been saying he would be open to adjustments to the concession package he suggested in exchange for FCC approval, it appears that talks along those lines didn’t go very far.

"I was hoping to forge a bipartisan solution that would offer consumers more diversity in programming, better price protection, greater choices among innovative devices and real competition with digital radio,” said Adelstein. “Instead, it appears they’re going to get a monopoly with window dressing. We missed a great opportunity to reach a bipartisan agreement that would have benefited the American people."

Martin has suggested a three-year cap on subscription prices; and provision of 8% of capacity to minority and NCE programmers, with 4% (12 channels) allocated to each. Adelstein had suggested a package along the lines begin suggested by House Subcommittee on Telecommunications and the Internet Chairman Ed Markey (D-MA) and numerous public interest watchdogs, which would have called for a six-year price cap; a 25% (75 channel) set-aside for minority/NCE offerings; open access to specs to assure competition in receiver manufacturing/distributing and requiring that HD capability be included in the receivers.

According to the Wall Street Journal, Tate is concerned about letting the two companies off the hook for violations of FCC rules, which included failure to offer interoperable receivers to consumers, putting sub-standard receivers on the market and mislocating terrestrial repeater stations. The fines against the two firms could total up to $20M She is also thought to be seeking further concessions, although she apparently is not looking for anything like the package Adelstein sought.

RBR/TVBR observation: There is nothing “free market” about supporting a monopoly, much less creating one. If this merger is granted, the free market will shut down for consumers who might like to an option when choosing a satellite audio service, and the free market will shut down for musicians and producers who will have only one satellite service providing satellite access. Musicians and producers will get the full effect of the merged entities ability to enforce take-it-or-leave-it deals immediately. Consumers will just have to wait three years for the same thing.