In a filing with the FCC, auto maker General Motors has asked that the FCC not only allow the merger between Sirius and XM, but that the bandwidth that the two satellite radio services have remain in tact. There have been some organizations such as Primoshere and Georgetown Partners that would like bandwidth taken away should the merger b e allowed.
This letter from GM offers a strong argument as to why the bandwidth should be preserved. GM has manufactured 6,500,000 vehicles with XM satellite radio. General Motors wants to ensure that their customers do not have to switch out hardware because spectrum is taken away.
Sirius and XM have always planned various concessions for this merger, but the sacrifice of bandwidth would be a very expensive proposition, and could even be a deal breaker. As many are aware, Sirius and XM each have 25% of the original bandwidth that was to be allocated to SDARS. The other half of the bandwidth was taken away from SDARS in Congress prior to launch of services.
Sirius and XM utilize differing codecs, and radio are not necessarily able to tune into or have the ability to be modified to accept the signal of the the full spectrum. Wherever the status of this, GM clearly outlines that the receivers installed in their vehicles are only capable of receiving XM, and thus the bandwidth that these receivers can tune to needs to be preserved.
Primosphere and Georgetown Partners seem to be seeking a kind of bandwidth welfare. In the case of Primoshere, a company that was originally a bidder for the spectrum, they seek access to one of the SDARS licenses. Georgetown Partners wants up to 20% of the bandwidth, and access to the existing infrastructure to put on what they term as diverse programming.
The Georgetown Partners proposal has garnered a bit of support from Congressman Meeks, but realistically their proposal has a lot of open endedness to it.
1. What type of minority programming would be offered?
2. Why couldn’t Sirius and XM offer such programming themselves?
3. Why should Sirius and XM be required to give up 20% of their bandwidth and allow access to their infrastructure?
4. If the full spectrum now allows 300 channels, how would Georgetown Partners propose to program 60 channels?
5. Does Georgetown Partners have any proposed programming on the table?
6. Who will be the final say in what is broadcast by Georgetown Partners?
7. Does Georgetown Partners really have the funding available to create what they propose?
8. Why should Georgetown Partners get the inside track? What if Google, CBS, Clear Channel, or T-Mobile wanted the bandwidth?
9. Why should Sirius or XM be forced to create a legacy system for another company?
10. Which parts of the bandwidth would such an organization have access to?
11. Who gets to utilize the advancements in overlay modulation?
12. Why should Georgetown Partners not have to participate in the risks associated with Research, Development, satellite construction and launches?
The Georgetown proposal may sound good in theory, but General Motors points out quite candidly that these companies need their existing bandwidth. Will Georgetown Partners make all of the GM consumers whole? In today’s world, there needs to be a bit of capitalism preserved, and Georgetown Partners seems to want to take a short cut. Satellite Radio investors who have supported these companies for years should be in line well in front of Georgetown Partners.
The FCC should review the Georgetown Partners proposal, and then quickly discount it as a pipe dream. GM is standing up for their investment into SDARS. GM has been involved since the beginning. GM has millions of consumers with a vested interest in preserving this bandwidth. The FCC should take GM’s letter to heart as they consider this merger.
Position – Long Sirius, Long XM