xact.JPGSirius and XM Satellite radio have filed an opposition to the claim from U.S. Electronics that a hearing must be held regarding their stance on the merger. U.S. Electronics argued in their FCC filing that because Sirius and XM did not challenge their filing requesting a hearing that the hearing should be granted.

In response to U.S. Electronics claims, Sirius and XM argue that U.S. Electronics (USE) "never petitioned to deny the merger, and thus has no standing to raise anything but informal objections to the transaction".

In our December 14th article titled, "U.S. Electronics Tinkers Some More" we pointed out that it appeared that U.S. Electronics was using the FCC comment process in order to gain a result that they may not get from their arbitration in their contract dispute with Sirius. We stated that U.S. Electronics was acting "disgruntled, scorned, and was simply lashing back", and that U.S. Electronics was using the commissions process. In the filing with the FCC, Sirius and XM seem to arrive at a similar conclusion.

The language in the Sirius and XM filing is quite strong, stating, "USE has inundated the Commission with at least 40 petitions, motions, letters, and other filings in the merger docket. These filings say virtually the same thing in different procedural forms, and raise the same substance at issue in an arbitration proceeding between Sirius and USE. Indeed USE's interest in the commission process and continuing spate of regulatory filings have nothing to do with the public interest. They instead constitute an attempt by a former manufacturer/distributor to extend its fight against Sirius beyond the contours of the on-going arbitration to achieve results via a merger condition that were not achieved during USE's markedly unsuccessful contractual relationship with Sirius."

Sirius and XM further point out that there is a precedence where other companies have tried to use the FCC as their battleground and that the FCC has rebuffed such efforts in the past.

My opinion on U.S. Electronics strategy has not changed. They are in an eleventh hour struggle to try to seek a favorable condition for themselves, and as the acronym of their company points out, USE is indeed trying to use the FCC.

While the FCC may indeed give some consideration to USE's stance, the consideration to reject their claims would seem to far outweigh anything else.

Position - Long Sirius, XM