Ex-foe warms to radio pairing

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By Kara Rowland THE WASHINGTON TIMES

At least one consumer group that has been skeptical of the proposed merger between XM Satellite Radio Inc. and Sirius Satellite Radio Inc. on Monday expressed support for a number of conditions agreed upon by the companies to help push the deal through the Federal Communications Commission.

Public Knowledge, a D.C. group focused on digital rights, said it was pleased by promises that include channel set-asides for noncommercial programming and an open standard that would allow any manufacturer to make a compatible receiver.

"Basically, it was everything we had asked for," President Gigi Sohn said. "It would be pretty hard for us not to accept this merger as it's been laid out to us."

On Sunday, FCC Chairman Kevin J. Martin went on the record with his support for the $3.8 billion merger, which requires majority approval from the media-regulating agency after the Justice Department signed off on the deal - without conditions - in March. Mr. Martin, a Republican, could circulate a proposal among his four fellow commissioners to approve the merger as early as this week, FCC sources said.

After announcing their plans to merge in February 2007, District-based XM and New York-based Sirius have faced intense scrutiny from consumer-watchdog groups who say the combination would result in a monopoly. To garner more support, the companies last summer unveiled a la carte pricing plans that would allow consumers to choose to pay less than current monthly subscription fees of $12.95 for smaller batches of channels.

Since then, according to a recent FCC filing, the companies have agreed: not to raise prices for at least three years following approval of the deal; to manufacture interoperable receivers that could receive both satellite services within one month of approval; and to set aside 4 percent of channels - 12 channels - for educational programming and to lease another 4 percent to minority programmers.

Public Knowledge has urged the FCC to require a la carte, a three-year price freeze, a channel set-aside of 5 percent for educational programming and an open-device standard. Ms. Sohn said the group is waiting to see details on how the channel set-asides will be implemented.

"The devil is in the details," she said, citing questions whether the quota will include existing educational programming. "Our strong preference is to have new programming."

Other consumer advocates are withholding judgment on the proposed conditions.

"We're waiting to see the fine print," said Craig Aaron, spokesman for Free Press, a D.C.-based public interest group focused on media issues. "We need to see exactly the requirements and how they would be enforced."

The Consumer Federation of America remains strongly opposed to the deal, even under the companies' recent concessions.

"Essentially, Chairman Martin is regulating a monopoly - badly," said Mark Cooper, CFA's director of research. Even if other companies manufactured compatible radios, there wouldn't be competition, Mr. Cooper said, because XM and Sirius would subsidize their receivers.

"If the chairman really means to have competition, he has to require a multiplatform radio [with over-the-air channels, satellite radio and HD Radio on the same receiver] or require XM and Sirius to get out of the manufacturing business altogether," Mr. Cooper said.

The agency's four remaining members have not said how they intend to vote on the deal. According to public filings on the FCC Web site, attorneys representing XM and Sirius met with the agency's two other Republicans, Commissioners Deborah Taylor Tate and Robert M. McDowell, on Thursday.