Sirius XM Channel Set-Aside to Be Expanded Beyond Minorities
The FCC would expand the types of providers getting guaranteed space on Sirius XM as full-time channels to be set aside for such use were expanded beyond those owned by minorities, in an order that circulated last week, agency officials said. The draft written by career agency staffers makes good on the 2008 commission order conditionally approving Sirius’s purchase of XM in a several-billion-dollar deal by dictating terms of channel set-asides. Instead of using minority-owned companies to fill 4 percent of the company’s channels, the draft would let Sirius XM pick as qualified entities any firm that doesn’t already have a programming relationship with the company, commission officials said. The channel set-aside was part of FCC approval of the 2008 deal that created the company.
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The item circulated late last Tuesday and isn’t expected to be controversial within the FCC and should be approved soon, though commissioners haven’t begun closely scrutinizing the proposed decision, agency and industry officials said. The item came as a disappointment to Minority Media and Telecommunications Council Executive Director David Honig because technically a business of any size -- including a large, established media company -- could be a qualified entity under the draft. Representatives of the Media Bureau and Sirius XM declined to comment.
The order would be a reversal of sorts from the terms of the original merger order, commission officials said. That ruling said the set-aside, at the time amounting to six channels each on the Sirius and XM satellite-radio services, was for entities “majority-owned by persons who are African American, not of Hispanic origin; Asian or Pacific Islanders; American Indians or Alaskan Natives; or Hispanics.” (See footnote 2 on page 87 of http://xrl.us/bhx6po.) The current draft doesn’t reference racial or ethnic groups, agency officials said. It sets out types of programming Sirius XM should pick so the channels will be used for diverse content, one said.
Among considerations the company should keep in mind when picking a programmer for the set-aside channels are whether it’s a new source of content, if it could be considered diverse, if it otherwise wouldn’t be available to current subscribers and whether underserved audiences are the target, a commission official said. No more than half the channels picked could come from companies that own full-power broadcast stations, the official said. Sirius XM must take steps to publicize the channel set-aside by posting information about it on its website, and the selection process must be transparent, another official said. A third-party wouldn’t decide which programming would get the green light, a decision that would be made directly by the company but with a period for the FCC to veto any programming decisions before they became final, agency officials said.
The company would have a set period of time, probably about a half year, in which to select the qualified entities, if the draft order is approved by FCC members, agency officials said. After Sirius XM chooses the programmers, the commission would have a certain amount of time, perhaps 45 days, to veto any decisions made by the company, FCC officials said.
The FCC originally gave the companies until Dec. 5, 2008 to meet the merger condition. It repeatedly extended the deadline as officials in the Media Bureau and Office of General Counsel worked to define the condition so it would meet the Supreme Court’s Adarand decision limiting the government’s ability to target racial groups, agency officials said. The deadline won’t be extended again, agency officials said. Commissioner Robert McDowell recently said there was no excuse for the tardiness in FCC action to deliver on the merger condition (CD July 20 p2).
"It sounds like they're not even making race an issue here at all,” said Fletcher Heald broadcast lawyer Francisco Montero, who has closely watched regulatory review of Sirius-XM but who hasn’t seen the draft. “My gut tells me there is no Adarand issue ... if they've completely sidestepped race,” he said.
Upon hearing of the forthcoming order, Honig sent a filing to the commission that criticized the draft and recounted his conversations Friday with Commissioner Mignon Clyburn, an aide to Commissioner Meredith Baker, Enforcement Bureau Chief Michele Ellison and FCC General Counsel Austin Schlick. “The public had absolutely no notice that the Commission was considering a new definition of eligible entity that is even more [diluted] than the small business definition that is extant now,” Honig wrote. “As contemplated here, the 99.99 percent of programmers not presently doing business with Sirius XM -- including huge multinational corporations -- would all be eligible entities” and that “would be a civil rights mistake of epic proportions."
In a related order that circulated with the channel set-aside draft, the commission denied a small broadcaster’s request to review the merger order because it didn’t adequately address the bleeding of signals from terrestrial satellite-radio repeaters into broadcast radio transmissions, FCC officials said. The draft order on reconsideration would deny the request by Mt. Wilson FM Broadcasters to revise the merger approval to more adequately address the issue, officials said. Some broadcasters had complained that signal bleed could mean a terrestrial radio listener would hear indecent programming, such as from Howard Stern.