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Senators: Merged XM-Sirius Should Offer HD On All Receivers
WASHINGTON -- June 30, 2008: In a letter to FCC Chairman Kevin Martin, Sens. John Kerry (D-MA), Claire McCaskill (D-M), and Ben Cardin (D-MD) cite the merger conditions FCC Chairman Kevin Martin is ready to accept for XM and Sirius, and which the satcasters have agreed to, and say, "We believe that these proposals fall short of what is necessary to permit the commission to conclude that the proposed meger meets the public interest test, as required by the Communications Act."
XM and Sirius have agreed to lease 12 channels to minority programmers and set aside another 12 channels for noncommercial informational programming, but the Senators say, "We believe that these commitments are not sufficient to ensure a viable competitor." They call the 12 channels of minority programing a "token offer" and say, "alloting 12 channels for minority programming squanders the great opportunity for truly enhanced minority ownership or control created by the proposed merger."
The Senators would like the FCC to require a combined XM-Sirius to lease "as much as 50 percent of its satellite system capacity, thus preserving the essence of the current FCC rules [which block the two satcasters from merging], and certainly no less than 20 percent of its capacity."
Kerry, McCaskill, and Cardin would also like device manufacturers after the merger to be required to integrate HD Radio into all satellite radio receivers. They write, "Consumers deserve the opportunity to choose from all of the latest radio technologies, whether they listen at home, at the office, or in the car." They say requiring HD "is an essential check against the merged entity using its monopoly power to stifle a promising new free, over-the-air radio technology."
The Senators also ask Martin to have the commission enforce its requirement for interoperable receivers. Because XM and Sirius haven't produced interoperable receivers so far, they write, "we remain skeptical about the merged entity's ability to deliver on this fundmantal requirement" and say that, to make sure that merger condition is enforced, as well as the a la carte condition, the FCC or another third party should certify interoperable radios, "as well as enforce a robust open-access requirement so that the merged entity cannot be a gatekeeper to equipment attached to its system."
Finally, the letter asks Martin to develop a "meaningful mechanism" to make sure XM and Sirius stick to the pricing commitments they've made as part of the merger conditions.
The Senators conclude by reiterating that they think the FCC's best course would be to reject the merger.
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