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SIRI » Topics » A Satellite Radio Merger Would Not Bar Entry By New Providers of Audio Entertainment Services.This excerpt taken from the SIRI 8-K filed Mar 21, 2007. A
Satellite Radio Merger Would Not Bar Entry By New Providers of Audio Entertainment
Services.
Aside from this existing, vibrant competition, entry by new competitors and expansion of current services remains viable notwithstanding the proposed merger. As discussed above, new ___________________________________ 133 Press Release, XM Satellite Radio Holdings Inc., XM Satellite Radio Holdings Inc. Announces Fourth Quarter and Full Year 2004 Results; XM Introduces First Portable, Wearable Satellite Radio, Feb. 10, 2005, at http://xmradio.mediaroom.com/index.php?s=press_releases&item=829 (last visited Mar. 16, 2007) (noting the introduction of MyFi in December 2004 and Tao and Airware in 2005). 134 Press Release, XM Satellite Radio Holdings Inc., Samsung Introduces the First Complete Line of Portable XM Satellite Radios With MP3 Capability, Jan. 4, 2006, at http://xmradio.mediaroom.com/index.php?s=press_releases&item=1136 (last visited Mar. 16, 2007); Press Release, XM Satellite Radio Holdings Inc., XM Satellite Radio Holdings Inc. Announces First Quarter 2006 Results; XM Introduces Five New Radio Models in the Second Quarter, Including Portable XM/MP3 Players, Apr. 27, 2006, at http://xmradio.mediaroom.com/index.php?s=press_releases&item=1307 (last visited Mar. 16, 2007). 45 wireless networks are already under construction, which will support mobile audio services over devices such as mobile phones and Internet radio over WiFi and WiMAX. In addition, there appears to be little limit to the growth of Internet radio and podcasting. The Slacker service described above, which uses both Internet and satellite technology, illustrates the way in which innovation is continually yielding new audio entertainment options.135 In addition, other types of spectrum are available that are capable of supporting services comparable to satellite radio. Audio entertainment services similar to satellite can be deployed using the frequencies allocated to the Wireless Communications Service (“WCS”). This spectrum is immediately adjacent to the band in which satellite radio already operates—indeed, it originally had been identified for satellite radio but was reallocated to WCS pursuant to congressional mandate.136 The Commission already has authorized satellite radio in this spectrum, having stated that WCS licensees were permitted “to provide a variety or combination of services,”137 specifically including satellite radio.138 2 GHz or L-band spectrum currently allocated for Mobile Satellite Service (“MSS”) can also be used to provide audio entertainment services akin to satellite radio. At least one provider has advocated using the 2 GHz band to provide such services and sought permission to do so, although the Commission did not grant ___________________________________ 136 See Amendment of the Commission’s Rules to Establish Part 27, the Wireless Communications Service (“WCS”), Report and Order, 12 FCC Rcd 10,785, 10,786-87 (¶¶ 1-3) (1997) (“WCS Order”); see also Satellite Radio Implementation Order, 12 FCC Rcd at 5756 (¶ 3). 137 WCS Order, 12 FCC Rcd at 10,846 (¶ 119). 138 Id., 12 FCC Rcd at 10,798 (¶ 27); see also id., 12 FCC Rcd at 10,808 (¶ 45) (noting that WCS “may have increased utility for satellite” radio). 46 that request.139 Two companies are already planning to provide satellite-based services using the 2 GHz band, and are subject to binding milestones to do so (although neither has announced plans to provide audio entertainment services).140 The Commission could authorize audio entertainment services using these spectrum alternatives without regard to a satellite radio merger. Finally, a satellite radio merger will not affect competition at the programming level. There are many providers of programming and content that can easily reach listeners through a variety of means. As reflected in the very broad range of offerings in their respective channel line-ups, the Applicants are highly committed to providing a wide diversity of viewpoints to consumers; the merger will not change the combined company’s strong incentives to continue this practice in the future. Programming and content providers could rely on other avenues to disseminate their content should the combined company adopt practices that would restrict the ability of programmers to reach satellite radio listeners. Indeed, by enabling the combined company to consolidate similar channels and thereby create capacity for new channels, the transaction eventually will open up additional opportunities for new content providers to reach listeners via satellite radio.141 ___________________________________ 140 TMI Communications and Company, Limited Partnership, and TerreStar Networks, Inc. Request to Assign Spectrum LOI Authorization, Memorandum Opinion and Order, 19 FCC Rcd 12,603, 12,623 (¶ 59) (2004); New ICO Satellite Services G.P., Application to Extend Milestones, Memorandum Opinion and Order, 22 FCC Rcd 2229, 2235-36 (¶ 21) (2007). 141 See supra Section III.B. 47
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