DARS Single Owner Rule Doesn’t Bar Merger, XM-Sirius Say
XM and Sirius told the FCC a March 1997 order authorizing each to provide satellite radio in no way can be interpreted as blocking their merger. Not surprisingly, the NAB disagreed strongly, as it continues to lead opposition to the merger.
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The FCC sought comment in June (CD June 28 p5) on whether bars on one operator owning both digital audio radio service (DARS) licenses in the order establishing DARS is a “binding” rule. If binding, it could be waived upon request; if not, for a merger to occur the rule would have to be addressed through a rulemaking beforehand. The order says one licensee “will not be permitted to acquire control of the other remaining satellite DARS license.” As of late Tuesday, the FCC request for comments had drawn only a handful of them.
XM and Sirius told the FCC the language is a “policy statement reflecting the FCC’s understanding of competition in 1997,” not a rule “adopted to bind the Commission’s broad discretion to promote the public interest in 2007.” And anyway, the companies said, the FCC has “full rulemaking authority” to repeal or modify any such rule. “The record compiled in this docket provides compelling justification to do so,” they said. “Arguments to the contrary effectively require the FCC to ignore the market realities and all of the competitive and technological developments that exist today, and to consider only the evidence that existed ten years ago.”
NAB said the merger is unusual in that XM and Sirius don’t even try to argue that it fits FCC precedent, policy and rules. “At bottom, applicants urge the Commission to (1) ignore controlling Commission and antitrust precedent, (2) disregard long-standing Commission policy against spectrum monopolies, and (3) waive, modify or repeal the Commission’s merger prohibition applicable” to DARS, NAB said.
The Consumer Coalition for Competition in Satellite Radio said granting the companies a waiver would “have a significant adverse impact on the Commission’s media ownership policy and the Commission’s spectrum policy.”