fcc-logo.gif Back in December of 2007 the FCC approved new media ownership rules by a vote of 3 to 2. The commissioners against the new rules were democrats Copps and Adelstein. Both commissioners have now issued statements in light of the recent senate vote to overturn the new rules. President Bush has promised a veto of any overturn attempt, so of course the entire issue is a contentious one. The National Association of Broadcasters has come out against the Senate resolution citing “seismic changes in the media landscape over the past three decades.”

What sector watchers may find interesting are the comments of commissioner Copps and Adelstein. Can their position on the media ownership rule translate to their likely opinion on the satellite radio merger? The answer to that question is subjective, but the tenor of their comments could lead one to believe that the democrat commissioners will not be positive votes on the issues surrounding the proposed merger of Sirius and XM.

Adelstein Comment

“The Senate’s complete rejection of the FCC’s attempt to permit greater media concentration represents a great victory of the people over the powerful. In light of the Senate’s action, any proposed transaction seeking to exploit the new rules will likely face intense scrutiny. This vote reflects a strong consensus across the ideological spectrum against further media concentration, from left to right and virtually everybody in between. The FCC veered dangerously off-course from the American mainstream, so our elected representatives are trying to steer us back. This unequivocal, bipartisan rebuke of the FCC is a wake-up call for us to serve the public rather than the media giants we oversee. Chairman Inouye, Senator Dorgan, Vice Chairman Stevens, Senator Snowe and the many other Senate leaders and public interest organizations who pushed this forward deserve our congratulations and the thanks of the American people.”

Copps Comment

“The Senate spoke for a huge majority of Americans last night by voting to overturn the flawed FCC decision gutting our long-standing ban on newspaper-broadcast cross-ownership. With courageous leaders like Senator Byron Dorgan, the Senate has struck a blow for localism and diversity in a media environment crying out for more of both.”

Of the two, the Adelstein comment would seem to be more negative in terms of satellite merger watchers. This seems to have been the case for quite some time. Copps again speaks of public opinion. It will be interesting to see his stance on the Sirius and XM merger given that the vast majority of comments have been in favor of the satellite marriage.

FCC Chairman Martin in the past has indicated that he was having various situations drafted for consideration. He has also indicated a desire to make decisions unanimous if possible. In my opinion, the vote on the satellite radio merger will never approach a unanimous decision because the concessions that would be required to obtain it would cause Sirius and XM to walk away from the deal. Thus, the cards are on the table. The comments have been made, the commissioners have all had ample time to weigh the issues at hand. the biggest sticking point may well be spectrum and/or minority/public use channels.

Will Martin proceed to a vote with a 3-2 decision? Only time will tell. If he had any possibility of getting a 4-1 vote, he will likely try to negotiate quite hard, because from a perception standpoint, even a 4-1 vote would be a “victory” in the public relations arena for the Chairman. Copps and Adelstein have had a tendency to vote along identical lines. It would be an interesting turn of events to see this pair split on the satellite radio issue. At this point, it would appear that the biggest consideration right now is not public interest, but political.

Position – Long Sirius, XM.