serrano.JPGOn the heels of a letter from the President of the Senate in Puerto Rico requesting that SDARS be made available beyond the 48 contiguous states, a letter from Congressman Serrano of New York has been posted on the FCC website.

The letter, written on September 19, 2007 made its way as a comment in the FCC's electronic filing system, and was added to the site yesterday. Interestingly, the letter takes no real position on the merger, but seeks satellite radio to extend its service in areas such as Alaska, Hawaii, Puerto Rico, the U.S. Virgin Islands, and American Samoa. While that would be great, it is not particularly feasible given the satellite locations of both Sirius and XM.

The issue is interesting, because it speaks more to possible concessions that the FCC may decide to discuss as part of the merger process. Expansion of satellite radio services beyond the current limits is something that the FCC could put a time table on as a condition of the merger. Frankly, the FCC likely has what they consider to be more important concessions to seek out, but the pressure now seems to be on for groups to get at least something out of this deal if at all possible.

Other concessions that have been requested include the inclusion of HD Radio capabilities incorporated into SDARS receivers, which perhaps could be an interesting development and a branch between the delivery methods of radio content that members of the FCC may see as a viable solution to getting better consumer distribution of audio services. By example, a deal could be structured where certain SDARS channels be made available to HD radio with commercials installed promoting the commercial free satellite service. It would solve the issue of getting HD Radio into cars, give satellite radio exposure, and give consumers satellite radio programming funded by advertisements rather than subscription fees. If a consumer likes the channel, and wants to avoid advertising, they could choose to activate their satellite receiver. Patents for insertion of commercials have already been filed.

As for the merger, when talk of concessions rather than pro or anti comments begin to happen, it could be viewed as a positive sign. In my opinion satellite radio can offer several concessions that would not break the deal, but any concession tied to giving up bandwidth would likely not be well received by Sirius and XM.

Position - Long Sirius, Long XM