In a filing with the FCC, Ibiquity, the company behind HD Radio, is seeking inclusion into all satellite radio receivers should a merger be granted. Ibiquity still takes no official stance on the merger, but does call the merger a monopoly. Ibiquity feels that satellite radio has entered into exclusive subsidized arrangements with automobile manufacturers that could preclude HD radio from gaining a foothold in the industry.

Interestingly, though full details of many OEM agreements are not public, there has never been any indication that the “exclusive arrangements” have ever been exclusive to anything but satellite radio products. Indeed, HD radio already has deals in place with BMW as well as Ford.

In my opinion, Sirius and XM should not be penalized for coming to arrangements with auto manufacturers, nor for subsidizing the installation of receivers. Both Sirius and XM have invested large sums of upfront money to pave the way for their services to get into the dashboards of automobiles, and beyond that have given many OEM’s a share of revenue.

For these reasons a requirement to include HD radio into satellite radio receivers would be tantamount to letting another business model avoid the heavy costs that have been born onto the shoulders of stockholders in Sirius and XM. There is no free ride these days. Is Ibiquity planning to pay any subsidy? Are they willing to share revenue with OEM’s, or even Sirius and XM?

For Sirius and XM to get where they are today was a process that Ibiquity wants a short-cut on. To provide that shortcut without remuneration seems unrealistic. Why should shareholders of Sirius and XM be required to bear the burden that Ibiquity themselves seems unwilling to bear?

In a second filing, Chester Davenports Georgetown Partners is seeking a sweetheart deal of a requirement for Sirius and XM to lease 20% of their channel capacity for this “diverse” company to operate and run. Once again, why should current investors be asked to sacrifice 20% of their capabilities and infrastructure to Georgetown Partners? Further, why is Georgetown Partners negotiating with the FCC rather than Sirius and XM? Is is right that a broad statement such as a requirement of 20% of the bandwidth be proffered to the government instead of the Boards of Sirius and XM? The Boards have a fiduciary responsibility to the shareholders, the FCC has no such tie. Why has Georgetown Partners not identified the dollar figure which they are proposing? Why have they not demonstrated programming concepts to fill 40 channels of programming?

Filings such as these grow tiresome quickly. Since when does a proposed merger mean that the FCC is now in charge of a welfare program? Quid Pro Quo happens in Washington. Handouts do as well. Just because it happens does not make it right. Shareholders of Sirius and XM have endured years of these companies growing pains. They have endured recapitalization, dilution of shares, and an onslaught of competition such as iPods and cell carriers offering content that was not imagined when the services launched. Asking shareholders to give 20% away to Chester Davenport, and to include HD Radio into all receivers without real remuneration is simply asking too much.

Position – Long Sirius, XM