For months now, Public Knowledge has been communicating to the FCC the need to place conditions on an approval of the proposed XM/Sirius merger. We would like to think this has been successful, as a draft order recently circulated by Chairman Martin proposed to approve the merger subject to conditions, many of which closely echoed our suggestions. Even more recently, XM/Sirius themselves identified a set of conditions they would voluntarily commit to should the merger be approved. Although we think the language of the merged entity’s proposed voluntary conditions need some work to truly reflect the public interest, this is a definite step in the right direction.
Of course, that assumes that XM/Sirius will ultimately abide by these obligations. After all, a condition is meaningless if it is ignored. And, according to some opponents of the merger, XM and Sirius have habitually ignored their obligations. The example most often presented of the satellite radio companies’ bad faith is the failure to develop and manufacture an interoperable radio. But, concerns have also been raised over the interference caused by XM/Sirius’ terrestrial repeaters and the failure of the companies to address these issues. Currently, the only way for an aggrieved party to seek enforcement of these conditions, or relief for the failure of the merged party to comply with these obligations, is to petition the FCC. Alternatively, the party could wait for the license renewal period and challenge that renewal. Neither option, though, presents a satisfactory solution.
To counter this, Public Knowledge and Media Access Project have noted the importance of the FCC creating some sort of enforcement mechanism to ensure that the merged entity complies with these conditions. The FCC has created robust enforcement mechanisms in the past. An example is the Enforcement Bureau’s Merger Compliance Oversight Team, created to monitor compliance with conditions stemming from several mergers of Bell Operating Companies.
In particular, PK and MAP have suggested that the FCC appoint an independent overseer to ensure enforcement of the XM/Sirius merger conditions. This type of oversight role has appeared in a number of mergers in the past. The Federal Trade Commission reserved the right to appoint a “Monitor Trustee” to monitor compliance with the Order in the AOL/Time Warner merger. The FCC required that AT&T Comcast appoint a “Corporate Compliance Officer” to oversee the merged entity’s compliance with merger conditions and to periodically report back to the Media Bureau. The fact that the overseer in the latter case was selected by the entity being monitored raises questions of undue influence. However, this could be easily remedied in the present case by requiring the FCC, rather than XM/Sirius, appoint an independent observer.
With both Chairman Martin and XM/Sirius demonstrating a willingness to work with the types of conditions we have been calling for, the proposed merger presents a great opportunity to provide for new and diverse programming, innovative devices, and programming choice. It is thus imperative that we not allow these promises to be subsequently ignored and forgotten.