Representative Tom Dingell, Chairman of the House Commerce Committee, has informed FCC Chairman Martin that he is launching an investigation into the happenings at the Federal Communications Commission, and specifically how the Chairman of the FCC has been conducting business.
Dingell stated in his letter that he is "rapidly losing confidence that the commission has been con ducting affairs in an appropriate manner." Dingell also noted that he feels that while not all proceedings have been questionable, that "a trend is appears to be emerging of short circuiting procedural norms, suggesting a larger breakdown at the agency."
Radio and Records in an article about the subject, cites the recent activity in the cable industry proceedings that had commission members openly questioned the actions of Chairman Martin. There is no secret that some members of the commission do not see eye to eye, and it appears that congress wants to step in and ensure that procedures are followed by the FCC.
Several high profile proceedings are happening within a short time-frame. Included in that list is the proposed merger of Sirius and XM. While Dingell does not bring up the merger in his letter, he does delve into the proposed media ownership rules that are under consideration. Some followers of the FCC will note that the issue of media ownership for terrestrial stations may spill over into considerations regarding the satellite merger, and while the issues are separate, some have taken the stance that media ownership changes need to be made if a satellite radio merger is approved.
For merger watchers, the news of an investigation being opened only adds fuel to what has already become a hot topic issue. Will the threat of an investigation derail the FCC's plans to decide on this merger in Q4? While this is possible it is not yet cast in stone. Should the DOJ make an announcement, does that add pressure to the FCC to make a determination? These are question merger watchers need to consider carefully as they make their investment decisions.
While the Martin lead FCC's actions may seem somewhat out of the ordinary, I would find it difficult to believe that the commission is not dotting their i's and crossing their t's on these procedural practices.
Dingell states that he feels that the FCC may be on the verge of a breakdown. Personally I do not see that happening. The commission is under a tremendous amount of pressure though, and that can not be denied. The commission has many considerations as the video and audio sectors have seen growth from all sides, and expansion into new distribution platforms. The technology is evolving at a pace that makes decisions much harder for the commission.
Position - Long Sirius, Long XM