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IF XM, SIRIUS PURSUE MERGER, HURDLES AT FCC, JUSTICE LOOM
[SOURCE: Wall Street Journal, AUTHOR: Sarah McBride sarah.mcbride@wsj.com and Amy Schatz]
With speculation on the upswing about a possible merger between satellite-radio rivals Sirius Satellite Radio Inc. and XM Satellite Radio Holdings Inc., the companies face a serious obstacle: Federal Communications Commission regulations that appear to specifically forbid a merger. Winning approval for any deal, from both the FCC and the Justice Department, may rest in persuading regulators that the two companies face many more competitors than just each other. Competing technologies that have helped damp satellite radio's growth -- like iPods, podcasts and Internet radio -- may give the companies ammunition to persuade regulators that a merger of the only two satellite-radio players isn't a threat to competition. An XM-Sirius merger is gaining more urgency in the industry as both companies struggle to win consumers. While both firms add new listeners each quarter, neither is reaching the lofty subscriber levels that were expected a few years ago. FCC Chairman Kevin Martin hasn't said how he might view a deal, but he could be leaning toward a stricter definition of competition in the satellite-radio arena. When asked about a potential XM-Sirius deal last week at the Consumer Electronics Show in Las Vegas, Mr. Martin pointed to how the agency viewed competition in the satellite-television market during its review of EchoStar Communications Corp. and DirecTV Group Inc.'s failed merger attempt a few years ago. In that case, the FCC took a narrow approach to defining the market for video competition. Chairman Martin's support for a deal would be critical to its success. The political climate at the Republican-controlled commission has been more strained than usual since Democrats took control of Congress, and it isn't clear that the five-member commission's two Democrats could be persuaded to support a further consolidation of the market, given their staunch opposition to relaxing media-ownership rules.
http://online.wsj.com/article/SB116899806305378365.html?mod=todays_us_pa...
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* FCC Nixes Prospect of Sirius-XM Merger
http://www.mediaweek.com/mw/news/recent_display.jsp?vnu_content_id=10035...

* FCC's Martin Says Rules Ban Satellite Radio Merger
http://www.bloomberg.com/apps/news?pid=20601204&sid=awTs.yh_a718&refer=t...

NTIA CHIEF: NO DTV PLAN B
[SOURCE: Multichannel News, AUTHOR: Ted Hearn]
The White House’s point man on the digital-TV transition said Tuesday that the Bush administration isn't preparing a backup plan in the event that millions of consumers lose TV reception when analog-TV service is cut off in 762 days. “We've got an existing statute that defines the DTV transition, and that’s what we are working on,” said John Kneuer, director of the Commerce Department’s National Telecommunications and Information Administration. Last year, Congress passed a law establishing the analog-TV cutoff Feb. 17, 2009. The law included up to $1.5 billion to subsidize digital-to-analog converters. The law allows a household to obtain up to two $40 coupons to buy converters beginning Jan. 1, 2008. The converters will allow viewing of digital-TV signals on analog-TV sets. But the $1.5 billion is sufficient to fund about one-half of the estimated 73 million analog-TV sets that rely solely on free, over-the-air broadcasting. With demand for converters potentially outstripping supply, coupled with others factors, such as the lack of consumer education, millions of consumers could wake up Feb. 18, 2009, with no functioning television as a result of federal law. Asked if the White House had some kind of auxiliary plan to avert a massive communications cutoff, Kneuer replied that his job was to implement the new law. “There is nothing in the statute that directs me to do anything except operationalize this program as it exists in the statute,” he added. “That’s what I'm focused on. That’s what the whole team is focused on.”
http://www.multichannel.com/article/CA6407854.html?display=Breaking+News

ATOP TV SETS, BASIC BLACK BOXES FACE COMPETITION
[SOURCE: New York Times, AUTHOR: Brad Stone]
For many Americans, the cable box — still commonly called the set-top box, though it is now too big to balance on top of increasingly thin TVs — may be the most disappointing piece of technology in their homes. As inventions like TiVo and YouTube alter the way people watch and control video, the traditional box has largely failed to keep up. Now that is beginning to change. At the Consumer Electronics Show in Las Vegas last week, makers of set-top boxes exhibited devices with a host of new features: more hard-disk space for storing digitally recorded TV shows, easier-to-navigate program guides, connections to Web sites, DVD burners and video games. The box manufacturers and the cable operators like Comcast, Cox and Time Warner Cable that they sell to, have an age-old motivation for improving their products: fear. New competitors are flooding into the TV business, including the industry’s rivals in the telephone business, and the computer kingpins Microsoft and Apple. Consumers can buy those alternatives at regular retail outlets, including the newest high-definition version of TiVo. It sells for $800 (with a $20 monthly fee) and can replace the box that cable and satellite providers lease to customers, instead of merely sitting on top of it and adding to living room clutter. Cable operators are being forced to play nice with these new entrants. The Federal Communications Commission has set a deadline of July 1 for all cable operators to make their services work with boxes from all third-party manufacturers, and last week it rejected a request from Comcast to extend the deadline.
http://www.nytimes.com/2007/01/17/technology/17settop.html
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COMCAST TO CHALLENGE RULING ON CABLE BOXES
[SOURCE: Technology Daily 1/11, AUTHOR: David Hatch and Andrew Noyes]
Comcast will ask the FCC to "immediately" review the agency's rejection of the company's request to be exempted from new rules governing cable set-top boxes. The regulations, which take effect July 1, require cable operators to offer units that accommodate insertable cards with security features designed to block channels and prevent programming theft. The rules are intended to spur a robust marketplace for the devices. Many consumers now rent proprietary boxes from their cable operators, meaning that if they switch providers, they must obtain replacements. Under the FCC's plan, a consumer could easily buy a standard box off the shelf and use it with any cable service. Comcast wants to continue to offer three low-cost models that have integrated security functions and do not accommodate external cards. "These set-top boxes are allowing more customers to get the advantages of digital services more quickly," company spokeswoman Sena Fitzmaurice said. If Comcast must offer re-engineered units, rental prices would rise $2 or $3 a month, she added.
http://www.njtelecomupdate.com/lenya/telco/live/tb-BWGX1168973921194.html

DEBATE ABOUT ROYALTIES FOR SATELLITE RADIO IS BACK ON
[SOURCE: Technology Daily 1/12, AUTHOR: Andrew Noyes]
Legislation to make satellite radio companies adhere to the same rate-setting and content-protection rules as Internet-based services is back in the Senate hopper. Sen. Dianne Feinstein (D-CA) introduced the same language last year, but it failed to move despite fierce lobbying by the music industry. The early play this year shows that lawmakers "continue to view parity among digital music services as a top priority," said Mitch Bainwol, chief executive officer of the Recording Industry Association of America. Under the current system, satellite radio has morphed into a digital distribution service, "shorting the creators of music, displacing licensed sales and threatening the integrity of the digital music marketplace in the process," he said. "This is simply no way to do business." The National Music Publishers' Association also hailed the new bill, S.256. David Israelite, the group's president, said he hoped that 2007 "will be the year that Congress ensures that music publishers and songwriters are compensated for their works when they are transmitted over digital radio." But Public Knowledge's Gigi Sohn said, "Consumers are demanding the ability to do more with digital media they lawfully acquire, not less. The bill looks to the past rather than to the future."
http://www.njtelecomupdate.com/lenya/telco/live/tb-GHUO1168974625716.html