michael-copps.jpgFCC Commissioner Copps recently sent a letter to FCC Chairman Martin with regards to the proposed News Corp. acquisition of Dow Jones & Company (publisher of The wall Street Journal). While not directly tied to the proposed merger of Sirius and XM, the letter does offer insight into the thinking of Commissioner Copps in regards to media ownership. It is interesting that Commissioner Copps has not written such a letter for the Sirius and XM merger.

In his letter Copps cites concern that if approved, News Corp. would be in control of a 'Big Four' broadcaster as well as two of the nations five largest newspapers. Further, he states that such a transaction would effect metropolitan New York because News Corp. would control two of the more popular television stations as well as two of the more popular newspapers.

Commissioner Copps goes on to propose that the "FCC open a proceeding to examine the implications of this proposed acquisition on the national media market. Given what you (Martin) have described as 'dramatic change' in the media marketplace over the past decade, I think it is essential that the FCC determine whether approval of this transaction accords with our public interest responsibilities and whether our existing media ownership rules and precedents are adequate to deal with this proposed transaction."

In the closing of his letter Commissioner Copps states that "...antiquated orders (rules), are no foundation on which to build a media policy for the 21st Century. Moreover, whatever one thinks about the wisdom of these earlier decisions on their merits, they clearly involved facts and public interest concerns dramatically different than those before us now."

There are a few things of particular note in this letter:

1. The absence of such a letter regarding the proposed Sirius and XM merger.

2. The acknowledgement of DRAMATIC CHANGE in the media marketplace.

3. The pondering of whether current precedents are adequate in making a decision today.

4. The acknowledgement that current media ownership rules are not adequate.

5. The acknowledgement that going forward, new considerations exist.

Throughout this merger process there have been some who look to various precedents in gauging their opinion on the merger. While this would seem a sound practice, there are many other things to consider, and chiefly amongst them is that past precedents are likely not as applicable as some may believe. The past offers a guide, but does not determine the future. A popular comparison for some has been the attempted merger between direct TV and Dish. Full reliance on that merger (Direct TV and Dish) is casting a blind eye onto everything that has happened in the 5 years since that merger was attempted. It appears that members of the FCC commission are well aware of the changes that have happened, and further, are tuned into all of the changes yet to come in a short period of time. The media world has broadened, as has the marketplace.

As stated earlier, the letter is not directly related to this merger, but the letter does offer insight into the thought process of a commissioner that will be voting on this merger. If you are involved in this sector, the letter is worth reading.

Position - Long Sirius, Long XM, Long DISH