Pressures At FCC Build – Congressional Investigation Grows
It is nearly impossible to mention the proposed merger between Sirius and XM without also mentioning the Federal Communications Commission. The FCC plays a major role in this merger, and the scope of the merger, although not as large as many others, has had central attention over the past year.
When considering the FCC, one has to look at the political climate, and the various “‘power plays” that are in motion. Lately, those that have been against the current administration have been exercising more bravado, as the election year heats up. FCC Chairman Martin has been subject to inquiries and investigation, and now the process has taken yet another step.
Sirius Buzz has obtained a copy of a letter (link at end of article) from Michigan Congressman John Dingell, Chairman of the House Committee on Energy and Commerce. The letter, written on March 12th, continues to illustrate the political pressures that are being placed on Chairman Martin of the FCC. Dingell is in the midst of investigating Chairman Martin as well as the FCC. According to Dingell, various complaints from FCC and other sources that the committee deems as credible, have raised concern over “management practices that may impact the ability of the FCC to discharge statutory duties and to guard against waste, fraud, and abuse.”
The Federal Communications Commission has five members, 3 of which are republicans. This leaves the democrats in a minority. Tensions that seem to fall along party lines have been obvious over the past year, with some commissioners openly challenging the way the commission is being run under the Chairmanship of Kevin Martin. Should the fall elections swing to the democrat party, there could be a shift in the FCC. At this point, stall tactics, and the power plays have become much more obvious.
In fairness to Dingell, there may well be some oversight and investigation that is needed. However, there is also a need to separate politics from the process of what is happening at the FCC. For their part, the FCC and Kevin Martin have pointed out numerous bad assumptions and investigative techniques on behalf of the oversight committee. Martin recently sent a 109 page response outlining various deficiencies in the General Accountability Office investigation. Martin makes some strong points in the letter.
In the letter, Dingell lists various papers, communications, documents and records. In some cases, Dingell is giving a mandate of two weeks to produce documents.
While the information is not specific to the Sirius and XM merger, it does illustrate that the congressional investigation is wide reaching and time consuming. It is little wonder that the FCC is being very by the book in terms of current reviews they are considering, and in no hurry to arrive at decisions. Decisions such as the Media Ownership Ruling from December are included in the requests from Dingell.
Ironically, the FCC had previously indicated that they were trying to reach a merger decision by the end of the first quarter. Now, they have what amounts to an overwhelming task to comply with Dingells request suddenly in the same time frame. Between old business, current business, and the Congressional investigation, it seems that the FCC has a full plate. Whether their is an announcement regarding the SDARS merger in the next two weeks remains to be seen. For their part Sirius and XM seem to be upping the pressure for a timely decision.
Politics is Politics…but this merger needs a decision!
Position – Long Sirius, XM.
To use this as reason to delay a decision of this merger is crap. The FCC has had all the information they needed for far to long. If they are close to making one, as they should be by now, then Dingel should take a number and wait in line. My point being the FCC should be close enough now that it should not take that much time out of their day to make a decision, too interfere with what Dingel wants. While what Dingel wants may be time consuming, a decision on this merger should be a matter of proof reading.
John,
I would not say that it is a reason to delay this specific merger, but can well throw a wrench in the works of everything that is happening at the FCC. These guys will still do what they do, but are also well aware that every move they make is being scrutinized.
Martin knows that his job at the FCC has an expiration date. I think the responce to this investigation will be one more merger.
It is clear after all this time that president Bush wanted consolidation as he wanted tax cuts in order to boost the economy.
Mr. Martin worked hard to this direction and this merger has one more sweet treat that only Mel Karmazin could bring to the industry: A-la-carte.
Mr. Martin has certainly noticed the gesture. He wants to bring this option to the public and I believe he would do it.
He knows that the investigation is the begining of the end and it does not depend on this merger.
I would say that he will be more eager to approve this now more than ever.
Thanks for the clearification Tyler.