Sirius, XM: FCC Determined to Establish Its Authority
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After working on an update for this deal for almost two weeks, it has become clear that the entire Sirius (SIRI) - XM Satellite Radio (XMSR) situation now boils down to the FCC's determination to establish its authority, as has been discussed in several recent entries.
The mounting involvement of politicians, state attorneys general, intervenors, etc. may be unprecedented at this stage of a major license transfer review, but it is by no means surprising or worth detailing each intervenor's position or motivation at this point. That the FCC review has become politicized is a given. It was anticipated from day one and even well before the formal merger announcement. The only issue remaining is the type and significance of conditions which the FCC is virtually assured of imposing on the license transfer.
With this being the case, it is also not surprising that SIRI CEO Mel Karmazin issued public statements this week indicating that the companies would consider terminating the transaction if the FCC conditions are deemed too severe. This must be perceived as an indication that discussions between the regulator, the companies, and third parties have reached the point where approval under the companies' terms is tenuous, at best.
There is simply no way to determine or predict how the companies' or the intervenors' actions during this final stage will influence the FCC's decision. It is presumed that both spectrum divestiture (or lease) and interoperable device conditions are now being openly discussed among the parties as potential conditions, in addition to the a la carte pricing offered by the companies. It is also presumed that the first two issues are precisely what Mr. Karmazin is referring to in his "harsh" conditions comments. Therefore, the specter of one or both of the first two conditions (spectrum/interoperability) will ultimately determine if the companies are to successfully complete this transaction.
It will be stated again that this publication continues to perceive this merger as arguably the defining moment for the current and future FCC. Any approval that fails to enforce the FCC's authority via significant conditions beyond those proposed by the companies will effectively result in the FCC being labeled a "rubber stamp" regulator for years to come -- at least with respect to major license transfers.
It is therefore anticipated that the FCC will indeed approve the license transfer, but will impose conditions which will force the companies to either submit to unwillingly or to reconsidering the combination altogether. The odds are now perceived to be evenly split on this perceived outcome and there is, unfortunately no real sense of timing with respect to an FCC decision.
Disclosure: We have no positions of any kind, in any security. We are a completely neutral source of research and analysis.
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This article has 56 comments:
Already
h
Maybe Mel is fed up with the FCC hearing these other parties as though they have a chance at getting anymore then what Mel has already offered, and is sending a clear message, dont bother. The FCC a rubber stamp regulator, well I guess the DOJ which gave its approval has nothing to say about that.
If you cant get anything right, you should be fired for incompetence. The reason is I would never buy a report or want to deal with a company that sells advise, if they can keep incompetent people like you on their payroll.
Poorly written.
"Defining moment for the current and future FCC"??
That gives new meaning to the definition of hyperbole.
American
You all should be embarrassed, and fired! You have lied and stalled enough. 180 day clock =a scam, by the end of the year=a Lie, by the end of the first quarter=another Lie. DOJ has proven this is not a monopoly! Allow the licenses to be combined and stop pandering to every group out there! They have no right trying to get my Company for free, I paid for shares of my company and you have no right to give anybody anything that I own. If the minorities want more radio exposure let them go buy a radio station with their own money. This is a free country, not a socialist state. So allow the combo with no concessions other than what the companies agreed to begin with. I hope you are all investigated for this disgrace, you are going far beyond what the FCC was intended for and now you are using this unassigned power to destroy American confidence in our government, and any company you choose to destroy. Your stalling of this decision has cost me personally and many more I am sure, I hope the companies file suit for your stall tactics, the empire state building was built in less time. And both companies have now lost the Millions/ Billions due to your indecision. You have no right to cost companies so much. This is America, free market capitalism, remember? This is not a necessity it is a pay luxury service. Mr. Martin do you have a Boss that oversees you, or are you a free-bird with no one to answer to? I would like to speak to your boss because no common sense decision can take over a year to make. I don’t know of any company, employee, or anybody that can take so long to do a job and still have a job after showing this amount of incompetence. I want you and you group all fired. Here is a link to a video that shows how irrelevant you group is; www.youtube.com/watch?...
So in ending you appear to be protecting your buddies at the NAB, and pandering to any special interest group wanting something for free. How about the Americans you supposed to be protecting? By the length of time you have been taking means one thing to this American and that is you are saying FU to ME. And I want you Fired. I will be sending this to anyone that will read it, the sad thing about that is that unless it is accompanied with a check, I assume no government official will read it.
Signed; One disappointed American.
So if the handful of senators and Ag's complaining and wanting free sat radio offered to a select few listed in the article then maybe everyone who owns a sat tv dish or old cable box they no longer subscribe to or pay for should be offered free cable or dish service. Doesn't make any sense I know so why should would it for sat radio either.
I am mad as hell about the FCC dragging there political feet on this merger both as an investor and as someone who is wanting to become a customer as soon as the merger is APPROVED.
The deal sat radio is offering with ala carte pricing is something after all this time cable has never offered!!
In closing I say to everyone speak up and be heard to the FCC as your voice is a political vote which means something to someones ears i guarantee you!!!
Why?
First of all, this is the one solid truth of American broadcasting.
American terrestrial radio is predominantly, indeed, suffocatingly extremist and right wing. There is very little liberal broadcasting happening in American terrestrial radio. I hope that you all can handle this simple little truth.
XM and Sirius radio are two strongholds where liberal speech and true freedom are permissible.
Frankly, I was very excited about their, I hope it was a joint proposal, to offer channels to minorities. It is about time and it is an exciting development in broadcasting. One tires of hearing only the tired rhetoric of boring old white men. I demand new voices.
I am tired of hearing what explodes from Rush Limbaugh's broad buttocks on station after station after station. The scoundrel has a monopoly on American broadcasting and he is boring, totally boring, even his utterly pathetic sex life is boring. A guy who can only get it on with little boys!
Ick!
E
E
SO...........NAB Lobbiest influence the Atty Generals, NAB Lobbiest influence Congress. Both Congress & Atty Generays pull the puppet strings of the FCC comission.
Money Talks!!!!
First of all, you nem-rod try blaming the 2 democrats that are and have always been against this merger from the begining. Dont blame the 3 republicans that are for it. This is well known and one you will see when the vote comes in at a 3 to 2 vote. Try blaming the 2 democrats that want to listen to all these people that want a free ride into a bussiness without the risk. You want to know why Martin is not forcing a vote, because he knows what happen the last time he had a vote along party lines. The democrat controled congress tried to cut the FCC funding off. So now he cant do anything until the 2 democrats have said all they want to say, and meet with everyone that they want to meet with. Why dont you take a look at which party most represents these attorneys general (almost all are democrat). Why dont you pull your head out of your ass and find a brain.
The problem is not the AG's and Congress. The problem is the FCC kissing the NAB backsides. That is why we need a serious inquiry to determine how much of a bribe Martin has received from the NAB, and chage the whole lot with violations of the racketeering laws. Let's put their butts in prison where they belong!!!
You libs are the most ignorant people I have ever known. None of your ideas make any sence. Here is an example: You are for killing babies and are against the death penalty. So let me get this straight, you have no problem killing a baby for no other reason then a inconvenience. That, that person put on themselves in when they had the oppertunity to be prochoice and use birth control. Then you are against having a person killed that has admitted to rape and killing 5 people. Yea that makes alot of sence right. Here is another from your favorite senator Kennedy and his whole family. WE NEED MORE WIND POWER!!!!!, WAIT A MINUTE, WHEN I SAID THAT, I MEANT SOMEWHERE ELSE NOT 20 MILES OFF MY BACK YARD. We need to do something about this global warming!!!!, NOW WHERE IS MY LIMO, I NEED TO GET TO MY PRIVATE JET.
You people are such hypocrites, you make me sick.
Everyone needs to tone down the politics here. Obviously all three of you are biased. Filthy is not saying that there is a conspiracy that conservatives are running the terrestrial airwaves, just simply that that is all that is on the radio. As for 16388, can't the same hypocrisy be said about conservatives allowing abortions yet are for the death penalty (come on man, think of the other side of the criticism here). Also, there are others (other than the Kennedys) that don't like alternatives in their "backyard" (see everyone who uses nuclear power and ships the waste afterwards to Nevada). As for KillerKaul, I believe there are two "pied pipers" and two groups of "rats" being lead by them.
Come on now, lets just stick to the topic, if you are going to post. There are some Republicans but even more Democrats against this merger and that just sucks. After the merger, there will hopefully be a single standard for the receivers (sorry to those who have already bought the different systems already) and merged/better programming. In the end, that is what we all want!
Next I have news for you the people of Nevada voted for it to be placed there. The state gets paid for it.
The topic is to put blame where blame lies, but because democrat brains cannot deal with the fact it is their own ideology getting in the way. They see fit to try and blame people that are for the merger instead of blaming only the 2 democrats on the board that are against it. Now if they would get their heads out of their asses and start writing the right people maybe we could get this thing going. Writing K. Martin and telling him he needs vote yes to approve this merger is like telling him he uses glasses, DHAAAAA.
Martin will not call for a vote until the companies agree to concessions that will sway 1 Democratic Commissioner vote. 4-1 would do it... but that will mean concessions beyond Martin's ala-carte and interoperability. Maybe a board position on the new company would do it. Who knows....
Sirius
Plano
Our wonderful govvys at work. Protect us from the big bad satellite company! I don't want the service but they forced the money out ! good grief..I am surprised their is not a HUGE outpouring of grief to the FCC from the larger institutional holders here.
Rather than your thesis, the FCC is seeking some idea of consensus among the board members. Truly, Georgetown Partners idea is clearly ridiculous and I don't understand why media is giving so much weight to their 20% consideration. There is no evidence that the FCC is actually considering granting this provision. The 5% provision would actually be quite helpful, I assume and contribute further to family friendly programming. This will encourage families who buy cars to hold onto their subscriptions. Please, let's stop guessing and creating fake theses about the FCC delay. We will see a decision this summer without a doubt.
E
Point taken!!!! Here is some more metaphors for you. The NAB is the Eddie Haskell of this whole thing. They are prodding the FCC in the back, all the while they are sucking up to Mr. & Mrs Cleaver (AG & Congress)! Meanwhile SIRI/XMR is getting their Lumps.
If people think they would be pissed now if it did not get approved, think how pissed they will be when because there was no merger SIRI/XMSR increase the subcribtion fee by at least a dollar, in the Fall. If you dont believe me, check out what analyst have been saying, they were already injecting it in there projections of when SIRI/XMSR would be profitable. So I can safely say get ready because if they dont get this merger plan on paying at least a dollar more.
Alot of what I see talked about here is outside what their decision must be based on.
Also, SAT RAD has a say regarding the outcome. Appeals may be brought regarding the decision and the FCC has to prove that they are in accordance with their mandate.
Otherwise it would be all about grease and politics. But even our government isn't that stupid. That's why we build in balances and it is why this takes so F*$%##g long.
News flash - according to their mandate there is no way the government can support a vote of NO regarding this merger with minimal terms. It can't be defended.
End of story.
pain, and po'd in plano, I just saw what you were talking about on Cramers Mad Money. You guys really need to not idealize him so much. My god it was a passing thought he said in a passing 5 seconds. I would not take to much from it. Now if he spends 5 minutes talking about it and gives some of his reasoning behind it, then you can take it more seriously. You cant react to every word that comes out of his mouth.