FCC Commissioner Adelstein Makes Merger Offer
According to the Associated Press, FCC Commissioner Adelstein has put an offer on the table that would enable the merger to happen. Adelstein, a democrat commissioner, was not widely considered as one of the commissioners that would support the merger. By Adelstein putting an offer on the table, there is perhaps a bit of insurance for the merger to proceed if republican commissioner Tate for some reason seeks even more stringent concessions.
Adelstein is asking that additional concessions be added to the deal in order to gain his support. Adelstein is said to be seeking:
- Pricing cap for six years instead of three.
- Commitment of 25% of the spectrum for informational and minority programming.
- Other requirements that were not specified
There were no details offered on whether the 25% of the spectrum would be under control of the merged entity.
In reference to the issue Adelstein stated, “It’s critical that if we’re going to allow a monopoly, that we put in adequate consumer protections and make sure they’re enforced.”
This latest news now puts commissioner Tate in even more of a spotlight than she was previously. Conventional thinking would have many believe that Tate would seek fewer concessions that Adelstein. Because of this, part of the finalized picture can now begin to take shape, and the street can begin to extrapolate where the conditions will fall.
Sirius and XM have not offered any official response to the Adelstein proposal. For quite some time it has been insinuated that giving back too much spectrum would be a deal breaker. Exactly where the spectrum line is drawn is unknown, but estimates in the neighborhood of 10% have been popular.
[ Via Associated Press ]
Position: Long Sirius, XM.
Tyler, do you think that Commissioner Adelstein knows Commissioner Tate’s vote and is just making his ‘no’ vote know before the onslaught of media (assuming Tate’s vote is ‘yes’ ) and somewhat appeasing certain congressmen and, sadly, groups like the NAB, GP, etc.?
“It’s critical that if we’re going to allow a monopoly, that we put in adequate consumer protections and make sure they’re enforced.”
The Department of Justice said:
“After a careful and thorough review of the proposed transaction, the Division concluded that the evidence does not demonstrate that the proposed merger of XM and Sirius is likely to substantially lessen competition, and that the transaction therefore is not likely to harm consumers. The Division reached this conclusion because the evidence did not show that the merger would enable the parties to profitably increase prices to satellite radio customers for several reasons, including: a lack of competition between the parties in important segments even without the merger; the competitive alternative services available to consumers; technological change that is expected to make those alternatives increasingly attractive over time; and efficiencies likely to flow from the transaction that could benefit consumers.
# The companies compete with many other options for audio entertainment, like traditional radio, HD radio, Apple’s (AAPL) iPods, and audio services via cellphones. Because of this competition, it’s unlikely Sirius and XM, if combined, could raise prices profitably.
# Merger synergies — like combined development, production, distribution costs — could create “substantial” cost savings that could get passed on to consumers.
# New technology platforms — like wireless networks serving up streaming Internet radio — will only offer more alternatives to satellite radio, not fewer.
I ask, who cannot read? Adelstein or me?
I didn’t realize the responsibility of the FCC included determining monopoly status. Why waste tax payer money funding both the FCC and DOJ?
Oh wait this is the government were talking about.
On a different note, why does someone who earns over $400,000/yr whose spouse has an income of $6,000,000 a year need to accept his Social Security Check of $24 k / year? No wonder social security won’t be around in the future when even our own presidential candidate milk the system for all it’s got!!! McCain shame on you an I’m republican!!!