Long-Delayed Set-Aside Order Increases Sirius XM’s Involvement

Sirius XM will evaluate and choose qualified applicants that it believes, “in good faith,” will increase “source, viewpoint and programming diversity,” the order said. The FCC didn’t impose specific procedures for the application process, but it encouraged the company to consider requiring sworn declarations from applicants with information on qualifications and the number of channels it’s seeking. Sirius XM’s involvement “will facilitate the resolution of technical compatibility issues that might arise during the selection process,” and expedite it, the agency said.

Twelve channels are available through the set-aside. The agency declined to direct the Media Bureau to select the lessees, “due to First Amendment and institutional concerns,” but the bureau will be notified of Sirius XM’s selections before the company begins negotiations over leasing, the order said. Sirius XM will submit the name of each selection and certify that it’s qualified, the order said. The bureau won’t “second-guess” Sirius XM’s selections as long as they meet eligibility requirements, the order said. Sirius XM won’t have any editorial control over programming on the channels, the order said.

A would-be applicant isn’t eligible if Sirius XM has an ownership interest in it, the companies share employees or in the previous two years they've had a programming relationship, the order said. Only half the channels set aside will be available for applicants with full-power broadcast licenses -- a provision that some groups have said would limit opportunities for important applicants, such as colleges. Individual applicants can win at most 4 channels for their programming, the order said.

The order “ensures that Sirius XM will reserve channels for programmers truly independent of Sirius XM, who will be new voices on the satellite radio platform,” providing new service or service to underserved audiences, said FCC Chairman Julius Genachowski. It also promotes “prompt introduction of these new services,” allowing independent programmers a good chance to get satellite radio distribution, he said.

FCC Commissioner Michael Copps pointed to problems with the original merger order conditions as the source of the lengthy delays. Copps, who dissented in the merger, said the condition, while “perhaps well-intentioned, but hastily and inartfully drawn” was an obvious problem early on. He said he hopes the order “corrects the original error and will open the way for more of the kind of diverse programming that our country so desperately needs.” Commissioner Mignon Clyburn agreed with Copps, saying the process was “a challenge” because of the approach taken in the original merger order. While “not perfect,” the order creates a “well-crafted balance” for defining qualified entities, she said. Future merger conditions should include all details of similar conditions rather than leaving them to later proceedings, she said. The order doesn’t create a template for other transactions, though the FCC “will consider what we have learned here and strive for improvements” in future merger orders, said Clyburn.

Not everyone was satisfied with the order. “I find it very disappointing that the commission missed an opportunity to address the need to come up with more targeted definition for eligible entities,” said David Honig, head of the Minority Media and Telecommunications Council. He’s on the FCC’s diversity committee, which has submitted an eligibility definition it said will increase diversity constitutionally in other transactions. “The fact that such a definition is before” the commission provides “some hope this won’t be the last word on the subject,” he said. “The FCC missed this opportunity but hopefully it will try again soon.”

"With this item concluded, Sirius XM looks forward to implementing the Qualified Entity requirements and introducing new and additional diverse programming on satellite radio,” said a company spokesman.