U.S. Electronics (USE) is continuing to encourage the FCC to have an “open device” mandate when considering approval for the Sirius-XM merger. In an ex parte filing made public today, USE cites recent articles from The Los Angeles Times, The Miami He…

I agree that the dispute between US Electronics and Sirius is not the sole source of your arguments. I am sure you see a great future in Satellite Radio just like all of us, and you want in on the action. Its the American way, and I completely understand that.

That being said, is US Electronics willing to build radios starting immediately? I am sure you and Sirius/XM can work a deal and you can start doing that NOW.

The main issue with the open device platform that I see is the fact that it allows producers such as US Electronics to sit back and wait until a market has developed and the technology has evolved to a point where it is cost effective. All of this is paid for by Sirius and XM, and then companies such as US Electronics comes in when the market is ripe and takes over to reap the rewards.

That said, I am in favor of the open platform. But would you care to comment on the above item?

First, take a step back here – this open device condition is proposed in the context of a merger to monopoly in SDARS. It’s more important to focus on what’s important to protect subscribers than what’s “fair” to the monopolist. But that being said, it is possible to make the open device condition workable for everyone and U.S. Electronics has repeatedly offered to come to the table with the FCC to do that.

The role of the independent laboratory that is proposed is to ensure fair administration of the quality standards and to contain the power that Sirius could wield to favor some suppliers over others. For the same reason, Sirius’s role in developing “standards” that the lab would administer would have to be carefully controlled – “standards” can be set in a way that appears neutral but isn’t really. The only “standard” that counts is that the hardware must not harm the network.

Second, monopolists get sharp scrutiny in regulation, and this one should, too. That’s why an independent monitor is essential to make sure Sirius complies with any conditions that become part of the merger.

Third, thanks for acknowledging that the past disputes between Sirius and U.S. Electronics, now in arbitration, are not the driver for the future open device condition proposed at the FCC. The two have always been separate.

-KW

Interesting thoughts. I have likely been one of the people more critical of U.S. Electronics (USE). In the early stages of the merger, there is little doubt that their filings were influenced by their ongoing arbitration with Sirius.

It would seem true that electronics companies are not banging down the door to create SDARS receivers. However, consumer groups seem to be expressing this idea with regularity. Public Knowledge, Media Access Project, New America Foundation and others hive all chimed in on the subject.

I agree that Sirius and XM would love to see chipset subsidies go away. This is exactly why I feel that this type of concession will not be something that objectionable in order to see the merger pass. My concern is that it happens in a way that protects and is fair to all parties.

USE, IMO, at one point wanted to put the screws to Sirius. That rhetoric has toned down of late. Will USE participate in an open access model? only time will tell.