Now AlphaStar wants to get involved in satellite radio. The company filed a letter with the FCC stating that should the merger be approved, that 20% of the spectrum should be leased to a independent entity. AlphaStar is a broadcasting and broadband company capable of delivering television, audio as well as broadband services.
AlphaStar boasts that they already have the infrastructure to facilitate bringing a viable service to the market, and that if required, they would dedicate programming to women, minorities, small business, and noncommercial programming. They also went so far as to state that the interests of Public Knowledge and Media Access Project would easily be handled by the company. The offer goes even deeper. AlphaStar has offered to fully demonstrate their capabilities to the FCC commissioners.
The listed capabilities of the company were born from the “Star Wars” initiative under President Reagan. The company seems quite impressive, and their resume would seem to qualify them to be able to act on their proposal.
Interestingly, AlphaStar offered more information in a single filing than Georgetown Partners offered in nearly fifty! The AlphaStar proposal has to make Georgetown a bit nervous. They are seeking access to the same 20% as Georgetowns’ Davenport, but have put together what appears to be a much more compelling proposal. Primosphere would also have some worry with this deal.
Will such a proposal take root and have any meaning? In my opinion, a 20% give-back of spectrum is a deal breaker, and I do not see commissioner Tate asking for that much. Thus, in simple terms, this issue may be a non-issue when all is said and done. However, I see potential that AlphaStar may be a willing participant even at 10% or 15%, and if that concession is what it takes to get the deal done, it is something on the table for Sirius, XM, and the FCC to consider.
Position: Long Sirius, XM.