Nearly two months after the Department of Justice’s approval of the proposed XM/Sirius Satellite Radio merger, the FCC continues to debate whether the transaction is in the public interest. FCC consent constitutes the last regulatory hurdle for a successful merger. Public Knowledge believes that the merger is in the public interest, provided it is subject to four conditions. Since our first filing with the FCC on the matter, Public Knowledge has insisted that the proposed merger be conditioned on the new company providing 5% of their spectrum capacity to non-commercial programmers, like public educational broadcasters, non-profit educational institutions, and local low-power radio stations. There is precedent for such a condition, as direct broadcast satellite (DBS) providers are currently required to reserve 4% of channel capacity for non-commercial programming.
Unfortunately, it appears that proposals for a minority owned commercial set-aside have begun to monopolize the discussion between members of Congress and the FCC, potentially to the detriment of non-commercial interests. As letters from members of the House Energy and Commerce Committee to the FCC show, debate over the size of a potential set-aside have focused on the minority ownership interest, to the exclusion of the non-commercial. Though we have told the FCC that we do not take issue with a set-aside reserved for minority ownership (although we do not endorse the FCC simply giving the capacity to any one particular entity), the minority set-aside cannot be in lieu of a non-commercial set-aside.
In any event, Sirius believes it already satisfies Public Knowledge’s condition as they claim to currently offer enough noncommercial channels to satisfy a 5% set-aside. We believe this is insufficient for three reasons. First, to promote greater diversity of programs, we would prefer that the programming on the non-commercial set-aside be of a type that would not otherwise appear on satellite radio. Second, we believe that, as with the DBS set-aside, no single programmer should be able to control more than one channel. A number of the identified non-commercial channels already offered by Sirius are in fact owned by the same entity. Finally, any set-aside should be a percentage of the scalable spectrum capacity. Sirius has instead proposed basing the number of channels in the set-aside on the number of channels that they are utilizing now. As compression technology matures and spectrum capacity increases, so will the number of usable channels increase.
The merger of XM and Sirius Satellite Radio provides a valuable opportunity to foster a diversity of programming. Regardless of the merits of a minority set-aside, it is imperative that the interest in providing a non-commercial forum not be forgotten.